HATTIE: (In the Studio) Jim teaches business owners to develop what he calls key indicators. He has 11 generic key indicators that work for every business but he also has each owner come up with ones that are specific to their business.

JIM: Each month you're going to generate a cash flow statement a P & L balance sheet and a key indicator report. What is a key indicator report? It's just what it says. You're going to pick anywhere from 8 on up key indicators that are peculiar to your business. When I say 8 on up, the key indicator report is a living breathing document. The key indicators may change as you grow and different things happen. So first remember a key indicator is not generic and it's different for your business than it is for anybody else's. Basically what it does is capture the key percentages, ratios and relationship of the numbers that come out of your P & L, balance sheet and cash flow statements.

HATTIE: (Voiceover) This is Jim's generic list of key indicators. From Your P & L you get...

1. Profit for the Month

2. Profit Year To Date

3. Sales for the Month

4. Sales Year to date

5. Return on Sales Year To Date

6. Salaries and Wages as a Percentage of Sales

From Your Balance Sheet you get...

7. Current Ratio

8. Debt to Equity

9. Inventory

10. Accounts Receivable

11. Percentage of Receivables over 60 days

HATTIE: Chris, what do you consider to be your key indicators? What numbers tell you if you're doing good or bad?

CHRIS: The way inventory is selling versus the previous year. Accounts receivable for sure. The collection on that.

HATTIE: So accounts receivables. Inventory. What about sales?

CHRIS: Definitely sales. Daily sales through the register and the way our employees are scheduled. What work we can get to. People come in and schedule us.

HATTIE: How often with the new system you've installed do you look at your key indicators?

CHRIS: We look usually, if not daily, depending upon my work load, at least once a week.