10 Business Statistics every BA should know

On this week's Better Business Analyst Episode, we cover the 10 Key business statistics business owner or business analyst should know. Business Statistics provide insights into a company's overall health and performance. They help businesses track their progress, identify areas for improvement, and make informed decisions. Every business owner or business analyst should be familiar with these key metrics to effectively manage and grow their business. We cover in detail: 1. Revenue Revenue is the total amount of money a company generates from its core business activities, such as sales of goods or services. It is a crucial metric for measuring a company's top-line growth and profitability. 2. Gross Profit Margin Gross profit margin is a measure of a company's profitability before deducting operating expenses. It is calculated by dividing gross profit (revenue minus cost of goods sold) by revenue. A higher gross profit margin indicates that a company is efficiently converting its sales into profits. 3. Net Profit Margin Net profit margin is a measure of a company's profitability after deducting all operating expenses, including taxes. It is calculated by dividing net income (revenue minus all expenses) by revenue. A higher net profit margin indicates that a company is effectively managing its expenses and generating profits. 4. Customer Acquisition Cost (CAC) Customer acquisition cost (CAC) is the average amount of money a company spends to acquire a new customer. It is calculated by dividing total sales and marketing expenses by the number of new customers acquired. A lower CAC indicates that a company is efficiently attracting new customers. 5. Customer Lifetime Value (CLV) Customer lifetime value (CLV) is the total amount of revenue a company expects to generate from a customer over their lifetime. It is calculated by multiplying the average purchase value by the average customer lifespan. A higher CLV indicates that a company is building strong relationships with its customers. 6. Customer Churn Rate Customer churn rate is the percentage of customers who stop doing business with a company in a given period. It is calculated by dividing the number of lost customers by the total number of customers at the beginning of the period. A lower churn rate indicates that a company is retaining its customers. 7. Conversion Rate Conversion rate is the percentage of visitors to a website or landing page who take a desired action, such as making a purchase or signing up for a newsletter. It is calculated by dividing the number of conversions by the total number of visitors. A higher conversion rate indicates that a company is effectively converting website traffic into sales or leads. 8. Return on Investment (ROI) Return on investment (ROI) is a measure of the profitability of an investment. It is calculated by dividing the net profit from an investment by the cost of the investment. A higher ROI indicates that an investment is generating a good return. 9. Average Order Value (AOV) Average order value (AOV) is the average amount of money spent per order. It is calculated by dividing total revenue by the number of orders. A higher AOV indicates that customers are making larger purchases. 10. Net Promoter Score (NPS) Net promoter score (NPS) is a measure of customer loyalty. It is calculated by asking customers how likely they are to recommend the company to others. A higher NPS indicates that customers are satisfied with the company's products or services and are likely to promote them.