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May 6, 2025
At the halfway point of the year, running a quick—but thorough—financial health check can be the difference between coasting and course-correcting before year-end. For San Diego businesses in hospitality, fitness, retail, and events, seasonal swings and local economic factors make a mid-year pulse-check essential.
Measure: Net cash from operations over the last six months.
Why it matters: Cash is king—especially in industries with high upfront costs (e.g., event deposits) -- Venture Growth Partners.
Benchmark: Positive operating cash flow; track month-to-month trends.
Measure: (Revenue – Cost of Goods Sold) / Revenue.
Why it matters: Shows core profitability before overhead. Hospitality margins often run 60–70%; fitness, 50–60% -- Forbes.
Action: If below benchmark, renegotiate supplier contracts or adjust pricing.
Measure: Operating Income / Revenue.
Why it matters: Reveals efficiency after operating expenses like rent, payroll. Retailers aim for ~10%+; restaurants 5–10% -- CFO Recruit.
Action: Cut discretionary expenses; optimize staffing schedules.
Measure: Net Credit Sales / Average Accounts Receivable.
Why it matters: High turnover means you collect quickly. Slow collections strain cash flow, common in event planning when clients delay final payment -- Toolbox.
Action: Tighten payment terms; offer early-payment discounts.
Measure: Cost of Goods Sold / Average Inventory.
Why it matters: For retail/restaurant, indicates whether stock is moving. Low turnover ties up cash and increases spoilage riskCFO Hub.
Action: Run promotions on slow-moving items; refine ordering.
Measure: Current Assets / Current Liabilities.
Why it matters: A ratio above 1.5 indicates good short-term liquidity. Critical when seasonal swings hit fitness studios or beach-resort venuesCFO Hub.
Action: Convert slow assets to cash; negotiate longer payables.
Measure: Actual vs Budgeted revenue and expense variances.
Why it matters: Identifies where you’re overspending or under-earning. Early detection lets you reforecast for year-end goalsNOW CFO.
Action: Adjust forecasts, reallocate marketing spend, or revise targets.
Because your finances should work for you—not confuse you. We make bookkeeping, payroll, and financial strategy clear, actionable, and actually useful.
