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.

Industry-Specific

Average Order Value (AOV)

Short answer

Average Order Value (AOV) is total revenue divided by number of orders. It is mathematically a high-leverage e-commerce metric after gross margin, because every order has fixed costs (payment processing, packing, fulfillment) — raising AOV lifts contribution margin without proportionally lifting those costs.

Formula

AOV = Total Revenue / Number of Orders

Take revenue in the period, divide by the number of orders. The result is what a typical order is worth.

Why it matters

AOV beats traffic for e-commerce profitability because every order has fixed costs (payment processing, fulfillment, customer service). Raising AOV via cross-sells, bundles, or free-shipping thresholds typically lifts contribution margin more than the equivalent traffic increase because no additional acquisition cost is incurred.

Benchmarks

Highly variable by categoryBenchmark against your sector, not gross averages

Track trend, not absoluteDirection of change matters more than the number

Common questions about Average Order Value (AOV)

What is Average Order Value (AOV)?+

Average Order Value (AOV) is total revenue divided by the number of orders in a period. It is the single biggest lever for e-commerce profitability after gross margin.

How is Average Order Value (AOV) calculated?+

Take revenue in the period, divide by the number of orders. The result is what a typical order is worth.

What is a good Average Order Value (AOV)?+

A healthy average order value (aov) is typically around Benchmark against your sector, not gross averages — highly variable by category. Specific targets vary by industry and stage; check our benchmarks above for your sector.

Why does Average Order Value (AOV) matter?+

See your business's average order value (aov).

Paste your numbers and CFO Grade computes this — plus 23 other ratios — in seconds, with your industry's benchmark already loaded.

Related concepts

Gross Margin Customer Lifetime Value (LTV)Inventory Turnover

Where this matters most

See Average Order Value (AOV) in the context of e-commerce & dtc.

Industry-specific benchmarks, common pitfalls, and what lenders look for in this sector.

E-commerce & DTC hub