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For Good Measure

Know how to take your company's vital statistics.

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This story appears in the April 2007 issue of Entrepreneur. Subscribe »

As any successful owner can attest, keeping a company on track requires constant analysis: assessing your strengths and weaknesses, understanding your financial position and evaluating the risks you may be taking.

While keeping tabs on the financial health of your business might seem daunting, doing a regular checkup isn't as complicated as it sounds. Some basic ratio analysis will help you check your business's temperature, identify potential problems, and see if your company is on the road to financial freedom or a cash-flow crisis.

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