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7 Top Financial Indicators You Should Monitor as a Business Owner

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Olutomi Rone Financial Indicators

By Olutomi Rone

Business owners must track and monitor financial indicators to analyse their businesses’ performance. However, financial indicators necessary for monitoring performance are by no means generic, not to businesses of a similar size, not to businesses within the same country, not to companies within the same sector or industries, and alarmingly not even to departments within the same business.

The finance function within businesses must be ready to craft the right strategy for the customised design and implementation of the right metrics. But too often, it has been perceived to be a non-revenue generating, number crunching and tunnel vision function. Yet, the finance function is one of the most strategic functions of an organisation.

According to a survey of more than 500 finance professionals in the UK by webexpenses, 60% of the finance professionals felt undervalued within their organisation. About 53% felt they did not get the same respect as colleagues working in other departments.

The secret to extracting the finance function’s strategic value is offering them a seat at the table; else, the finance function is incapable of creating and maximising stakeholders’ return.

With my years of experience in metric design and implementation across businesses with different compositions and in various sectors, I will recommend using the following indicators in addition to more customised metrics.

However, the finance function should consider details like the business model, size, equity composition, PPE investments, manufacturing, and capital structure during the design phase. These top financial indicators should be designed to cover Profitability, Liquidity, Solvency, Gearing, Valuation, and Investments of the business.

Here are the 7 top financial indicators you should monitor on your periodic dashboard as a business owner.

Net Profit Margin

The majority of organisations commonly overlook this primary financial indicator; yet, one of Harvard Business School’s articles on 13 financial measures to monitor highlighted net profit margin as a critical financial metric for any organisation.

This profitability indicator measures the actual percentage of net profit an organisation earns directly related to its total revenue and is calculated by dividing net profit by the revenue in any one period. The higher the percentage of this net profit margin, the better the organisation is deemed to have performed.

High net profit margins mean the organisation has a good pricing strategy and/or operating solid cost optimisation initiatives. However, a heavily geared and capital intensive (PPE heavy) organisation could distort the net profit margin by presenting a lower net profit margin.

Gross Profit Margin

This financial indicator focuses on the direct cost or cost of goods sold and how much of this cost line is used to generate revenue for the organisation. This metric is a fundamental indicator for manufacturing companies as they tend to have higher direct costs than firms whose solutions are more service-oriented.

This profitability indicator is calculated by dividing the gross profit by the organisation’s revenue. Like the net profit margin, it should be compared with ratios from previous periods for the same firm and with other firms within the same sector. A high gross profit margin means the company is efficient in using its resources to produce goods/services.

Cash Flow to Revenue

This ratio is essential for keeping close tabs on cash generation compared to revenue generation; it provides a clear insight into how well the business collects its cash. While companies in the hospitality or aviation space might not have their cash tied down, those in the consulting or telecom infrastructure sector may have another story to tell.

The ratio is calculated by dividing the organisations operating cash flow by its net revenue. For a healthy organisation, we expect a ratio of at least one, a ratio below this could mean an ineffective cash collection system within the organisation.

Quick Ratio

This liquidity ratio measures an organisation’s ability to pay off its liabilities in the shortest possible time frame. It is calculated by deducting inventory and prepaid expenses from current assets and dividing the resulting figure by current liabilities; the ideal quick ratio is one or above.

It evaluates the current assets of an organisation. It allows the user to conduct a scenario analysis that considers what would happen to the organisation should it need to pay off its short term liabilities “quickly”.

In a US study of why businesses fail, 82% of failed businesses experienced cash flow issues; I believe a sizeable proportion of these companies could not promptly convert some assets to cash.

Debt to Equity 

This ratio indicates solvency and financial leverage; it examines the organisation’s capital structure and seeks to highlight any over-reliance on debt or equity. The ratio is calculated by dividing total long-term debt by shareholders equity. It shows debt as a ratio of total equity; a ratio of one or higher is considered less risky.

When using this ratio to make comparisons, do so with organisations within the same sector because specific sectors have a higher appetite for debt than others. A caveat is that debt is not always bad for business; it can be used to fund feasible and well-thought-through growth strategies without affecting the structure of shareholders equity.

Price/Earnings (P/E) Ratio

This valuation indicator is a robust measure of the alignment between an organisation’s share price and earnings per share. The ratio is calculated by dividing price per share by earnings per share ((net income – preference dividends)/weighted average of ordinary shares outstanding).

The P/E ratio should always be compared to sector averages. P/E ratios higher than sector average are often perceived as overvalued and risky, while shares with lower than average P/E ratios are often perceived as future moneymakers and allows the investor to benefit from share price increases.

Moreover, consider consulting an industry expert or a professional valuation firm if you need a business valuation. Doing so will give you access to expert knowledge and the necessary tools to accurately assess the value of your business and ensure that you make informed decisions regarding its growth and profitability.

Return On Capital Employed (ROCE)

This is a profitability/investment ratio, and it is often used as a decision-making metric for investment purposes like the P/E ratio. It is calculated by dividing earnings before interest and tax by capital employed (this represents the total amount invested in the organisation).

The metric tells investors how efficiently capital is being used to generate profit. It should be compared to historical figures of the same organisation to establish a pattern for capital utilisation.

All the metrics mentioned above must be interpreted together, meaning that a single promising metric should not be used as a sole positive indicator for your business.

It is important for business owners to have the right set of financial indicators that cover all the critical business sustainability areas. It sets the right accountability tone for the individuals tasked with revenue generation responsibility, small business expense report, and provides a clear target-setting basis for monitoring and performance evaluation.

With these metrics incorporated into periodic management review meetings, business owners can worry less, knowing there is a robust system in place that would identify any potential sustainability or going-concern issues before they are likely to occur.

Olutomi Rone is a director at African Ally, a global staffing solutions company. She started her career in the UK within the banking, consulting and manufacturing sectors. In Nigeria, she has worked in the consulting sector at PwC and was the Head of Business Planning at IHS, she then moved on to be the Chief Operating Officer at Kimberly Ryan Limited.

She holds a BA(ECON) Honors from the University of Manchester, UK and is ACCA qualified. She is a cross-functional leader with 19 years of experience in Business Planning and Analysis, Strategy Formulation, IPO Readiness, HR, Finance and Accounting. Her experience cuts across Finance, HR Consulting, Telecommunications, Manufacturing and Construction Industries.

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Building 234 Solutions: A Response to Everyday Workforce Challenges

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Owoloye Emmanuel 234 Solutions

By Owoloye Emmanuel

Every business starts with a problem. For us, that problem was hiding in plain sight.

Across organisations, we kept seeing HR professionals, payroll teams, and business leaders spend significant time navigating processes that should be simpler. Employee records sat across multiple systems, payroll processes required manual intervention, and routine workforce tasks often became more complicated than they needed to be.

As businesses grow, workforce operations naturally become more complex. Yet many organisations still rely on disconnected tools and workflows that create unnecessary friction for both employers and employees.

The consequence is more than operational inefficiency. HR teams spend valuable time managing systems instead of supporting people. Business leaders struggle to access timely workforce insights, while employees experience delays in processes that should be seamless.

These weren’t isolated challenges. They were recurring realities across workplaces, regardless of industry or size.

That observation led us to a simple question: what if workforce management could be easier?

What if HR, payroll, and workforce operations could work together within a single, connected experience?

That question became the foundation for 234 Solutions.

We are building 234 Solutions with a clear belief that workplace technology should reduce complexity, not add to it. Our goal is to help organisations spend less time navigating processes and more time focusing on productivity, growth, and people.

As we prepare for launch, our focus remains simple: building practical solutions for real workplace challenges and helping organisations create better experiences for the people who power them every day.

Owoloye Emmanuel is the founder of 234 Solutions

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The Role of TV in Preserving African Stories and Identity

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Preserving African Stories

Scroll through social media today, and you will notice something interesting: everyone is either reacting to a series, quoting a movie line, or debating a character as though they personally know them. Beneath the memes and binge-watch culture, however, lies something deeper. Television remains one of the most powerful tools shaping how Africans see themselves, remember their history, and tell their own stories. In a continent as diverse and expressive as Africa, that matters more than ever.

TV as a Cultural Archive, Not Just Entertainment

Long before streaming algorithms began shaping our viewing habits, television was already preserving African identity. From Nollywood dramas that capture the rhythm of everyday Lagos life to documentaries exploring Maasai traditions and Ghanaian folklore, TV has served as a living archive of the continent’s stories.

It preserves more than entertainment; it preserves language, culture, humour, values, and shared experiences. Unlike fleeting social media content, television allows stories to unfold with depth, exploring the realities of family, tradition, ambition, and modern African life without reducing them to stereotypes. That is the power of TV: preserving not just stories, but perspective.

Why Representation on TV Still Matters

There is a subtle but important truth: if people do not see themselves on screen, they may begin to believe their stories are not worth telling. This is why African TV content is more than entertainment; it is affirmation.

Seeing a character who speaks like you, struggles like you, or celebrates like your community does something powerful. It validates identity and challenges outdated narratives that have historically defined Africa through external lenses.

This is where MultiChoice Group, through platforms such as DStv and GOtv, plays an important role. They do not simply broadcast content; they help distribute cultural memory at scale.

GOtv, DStv, and the Everyday African Viewer

Think about a typical evening in many African homes: the TV is on in the background, someone is laughing at a comedy show, another person is watching a local series, and someone else is catching up on the news. That shared viewing experience remains very real.

Through platforms such as DStv and GOtv, African households are exposed to a blend of local storytelling and global content. More importantly, they have helped amplify African-produced content by bringing Nollywood films, African reality shows, talk shows, and documentaries into mainstream rotation.

It is not just about access. It is about visibility.

A young filmmaker in Lagos today is more likely to believe their story matters because they have seen similar stories broadcast widely. A child in Accra grows up hearing familiar accents and seeing environments that look like their own on screen, not as exceptions, but as the norm.

TV Is Also Shaping Modern African Identity

African identity is not static; it is evolving. Television reflects that evolution in real time.

Today, audiences see:

  • Young Africans balancing tradition and modern dating culture

  • Stories tackling mental health in African households

  • Fashion and music influences spreading through TV series

  • Political satire shaping public conversation

Conversations that were once confined to homes are now being explored on screen, giving audiences the language to discuss issues that were previously unspoken.

In many ways, television is doing what oral tradition has always done: passing stories, values, humour, warnings, and history from one generation to the next. The difference is that today’s griots are writers, directors, and broadcasters.

The Future: From Watching to Owning Our Narratives

The next stage of African storytelling is not just about being seen; it is about ownership.

As more African creators produce content and platforms continue to invest in regional storytelling, television becomes more than a mirror. It becomes a tool for shaping how Africa is represented to itself and to the world.

While streaming continues to grow, television, particularly accessible platforms such as GOtv, remains one of the most effective ways to reach everyday audiences across different income levels and regions. After all, storytelling only matters if people can access it.

African stories are not new. They have always existed in families, on streets, in markets, in history books, and through oral traditions. What television has done, and continues to do, is give those stories a stage wide enough for millions to experience them at once.

The next time you watch a local series or documentary on DStv or GOtv, remember that you are not just being entertained. You are participating in the preservation of African identity itself.

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The Future of AI in Nigerian SMEs: Overcoming Barriers to Implementation

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Kehinde Ogundare 2025

By Kehinde Ogundare

Ask a tech entrepreneur in San Francisco what AI means for their business, and they are likely to talk about competitive advantage, product differentiation, and scale. Ask a small business owner in Kano or Onitsha the same question, and the conversation shifts entirely.

For many Nigerian SMEs, the priority is keeping the lights on, managing costs, and finding sustainable ways to grow in a challenging economic environment. This difference in perspective explains why the global AI conversation, often shaped by assumptions about stable infrastructure, deep capital, and abundant technical talent, frequently fails to address the realities facing Nigerian SMEs.

This matters because Nigerian SMEs are not a peripheral concern. In 2024 alone, MSMEs contributed 46.32% to Nigeria’s GDP, accounting for 96.9% of businesses and 87.9% of employment. These businesses are the backbone of the Nigerian economy, and if AI is going to mean anything for Nigeria’s development, it has to work for them in the daily conditions they actually operate in.

However, research drawing on empirical data from 144 Nigerian SMEs found that inadequate infrastructure, low digital literacy, skills shortages, and regulatory gaps are collectively preventing them from meaningfully engaging with AI. Awareness of AI is high and growing. What is missing is a clear and honest conversation about what adoption actually requires in this specific context. The barriers are real, but none of them are insurmountable. The question is whether the tools, pricing models, and support structures being offered to Nigerian SMEs are designed with those barriers in mind, or whether they have been built for another market entirely.

Subscription models making AI affordable for small businesses

When most small business owners hear “AI,” they imagine expensive software, specialist consultants, and a hefty upfront bill.

That assumption is not entirely wrong, but it describes a particular way of buying technology, not AI itself. The shift that makes AI genuinely accessible at the SME level is the move away from large, one-time capital purchases towards tools that charge a predictable monthly subscription. Businesses can pay for what they use, scale back when necessary, and avoid the debt that a major technology investment can create.

The deeper opportunity here is consolidation. Many SMEs are already spending money across multiple disconnected tools—one for invoicing, another for customer records, another for stock tracking—none of which talk to each other. An integrated platform that handles several of these functions together, with AI built in, can actually cost less than the sum of those separate subscriptions while giving business owners a clearer picture of their operations.

With margins already under pressure, any technology a business adopts needs to visibly show an increase in productivity or bottom line. Subscription-based, integrated platforms, priced transparently and honestly, are the model that best fits this reality.

Infrastructure challenges demand a mobile-first approach

No conversation about technology in Nigeria is complete without confronting the infrastructure problem, and AI is no exception. Nigeria continues to face major infrastructure barriers, including limited broadband access, unreliable power supply, and high data costs, all of which constrain deeper AI adoption. These are structural features of the operating environment that any sensible technology strategy must account for today.

The electricity situation alone is significant. The World Bank estimates that the lack of stable electricity costs Nigeria’s economy approximately $26.2 billion annually, equivalent to about 2% of GDP, forcing many businesses to run on expensive diesel generators. That cost ripples outward.

In practical terms, AI tools built for Nigeria cannot assume a stable broadband connection or a computer that is always powered on. The tools that will actually get used are the ones that work on a smartphone, consume minimal data, and can function offline when connectivity drops, syncing back up when it returns. The mobile phone is already how many Nigerian SME owners run their businesses. AI that meets them there, rather than demanding infrastructure they do not have, is AI that has a genuine future in this market.

The direction is clear: build capability from within, using tools that make that possible. Recent AI performance research reveals that 64% of African workers are already actively using AI at work, signalling massive grassroots readiness and driving forward-thinking organisations across Nigeria, Kenya, and South Africa to aggressively prioritise internal upskilling frameworks to bridge the talent gap.

As the policy groundwork is being laid, the commercial ecosystem is beginning to respond. What remains is a clear-eyed acceptance that AI tools built for this market need to look different from those built for markets with different realities. Low cost, low bandwidth, and usability for non-technical people are not modest ambitions; they are the actual requirements. Build for those realities, and AI has a real future in Nigeria’s SME economy.

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