What is a good EBITDA margin for a small business?

Most healthy small businesses run an EBITDA margin between 10% and 20%. Service businesses and SaaS often run higher (20–35%+), while restaurants and retail typically run 10–15%. CFO Grade compares your EBITDA margin to industry-specific benchmarks across 16 sectors.

What DSCR do lenders look for?

Most SBA and commercial lenders require a Debt Service Coverage Ratio (DSCR) of at least 1.25x. Construction surety bonds often require 1.5x or higher. A DSCR below 1.0x means your EBITDA does not cover your annual debt payments.

How does CFO Grade calculate the letter grade?

CFO Grade scores 24+ financial ratios across profitability, liquidity, leverage, and efficiency — weighted by industry. The composite score maps to a letter grade from A+ to F. The full methodology and benchmark sources are described in the report and the disclaimer page.

Yes. The full analysis, 24+ ratios, letter grade, and industry benchmarks are completely free with no signup. Optional paid features include a $9 PDF export and a $19 Pro Pass with AI-generated CFO memo and 30 days of unlimited PDFs.

Do I need to create an account?

No account is required. Your numbers stay on your device unless you explicitly opt in to anonymized peer benchmarking. Pro entitlements are bound to your device with a restore link you can email yourself.

Is CFO Grade financial advice?

No. CFO Grade provides educational insights for business owners and analysts. It is not financial, tax, legal, or investment advice. Always verify the output with a qualified professional before making business decisions.

E-commerce & DTC

Shopify shows you revenue. We show you whether you're making money.

Contribution margin, cash conversion cycle, inventory turns. The metrics an acquirer or aggregator would actually pay attention to.

Free

Industry benchmarks

No signup

Worth quotingDTC brands with a cash conversion cycle over 90 days fail at 3× the rate of those under 45 — inventory days are the silent killer of e-commerce businesses.

Built for owners and analysts who say…

"Sales are up but cash is somehow tighter than ever.
"Inventory is eating all your working capital.
"Need numbers an aggregator or buyer would underwrite from.

What you'll get

Contribution margin and cash conversion cycle
Inventory turn vs DTC industry medians
Aggregator-friendly summary metrics
PDF for broker conversations

Common questions about e-commerce & dtc financials

What financial metrics matter most for Shopify stores?+

Contribution margin, blended gross margin, inventory turn (target: 4–8× per year), cash conversion cycle (target: under 60 days), and CAC payback. Revenue alone tells you nothing — many 8-figure DTC brands are unprofitable at scale.

What is a good gross margin for e-commerce?+

40–60% blended gross margin is healthy for most DTC brands. Apparel and beauty often hit 60–75%. Electronics and accessories 30–40%. If your gross margin is below 35% after shipping costs, scaling will accelerate losses rather than profits.

How do aggregators value Shopify businesses?+

Aggregators typically pay 3–5× trailing twelve-month SDE (Seller's Discretionary Earnings), adjusted for owner add-backs. They focus on contribution margin, customer concentration, traffic source diversity, and inventory health. CFO Grade computes all the metrics they underwrite from.

Why is my Shopify store profitable on the P&L but cash-poor?+

Almost always working capital trapped in inventory or in-transit goods. Your P&L recognizes revenue on sale, but cash was spent months earlier on the inventory. Look at your cash conversion cycle — if it's above 75 days, that's where your money is sitting.