Health Check for Your Business — 6 KPIs You Must Know

The health score is a weighted average of six components that together cover the most important dimensions of a company's financial health. The weights are chosen based on the relative risk each dimension poses to a typical Danish SME: Liquidity and Profitability weigh heaviest at 25% each, because they are the most acute indicators — a company can survive with low growth, but not with an empty cash register or negative profit margin. Solvency and Efficiency weigh 15% each, reflecting the company's resilience and operational health. Growth and Compliance weigh 10% each — important, but rarely acutely critical. Each component is scored from 0 to 100 based on objective thresholds calibrated to Danish SME norms. The composite score is then the sum of each component's score multiplied by its weight. A company with perfect scores on all dimensions hits 100. Most Danish SMEs land between 45 and 75.

The Liquidity component measures three things: your current ratio (current assets divided by current liabilities — target: above 1.5), your cash runway (number of days you can sustain operations with current cash balance — target: above 90 days), and your DSO (average debtor days — target: below 30 days). Data is pulled directly from CashGate and DebtorGate. A score of 100 means: current ratio above 2.0, cash runway above 180 days, DSO below 20 days. A score of 0 means: current ratio below 0.5, cash runway below 7 days, DSO above 90 days. Most SMEs score 40–70 here. The Profitability component measures net profit margin (profit before tax divided by net revenue — target: above 10% for service companies, above 5% for trade), contribution margin (target: above 50% for service, above 25% for trade), and budget compliance (actual result vs. budget — target: within 5% variance). Data is pulled from KpiGate and BudgetGate. The combination of liquidity and profitability at a combined 50% of the score reflects a simple truth: you can be profitable but illiquid (and go bankrupt), or liquid but unprofitable (and slowly bleed out). Both dimensions must be healthy.

The Solvency component measures your equity ratio (equity divided by total assets — target: above 30%) and your gearing ratio (debt divided by equity — target: below 2.0). Solvency is the company's shock absorber: the higher the equity ratio, the more resilient you are against unexpected losses, economic downturns or customer churn. Data is pulled from KpiGate based on balance sheet figures from e-conomic. A score of 100 means equity ratio above 50% and gearing below 0.5. A score of 0 means negative equity — and in most cases a §119 situation. The average for Danish SMEs is around 25–35% equity ratio, which typically gives a sub-component score of 50–65. The Efficiency component measures how fast your business cycle turns: DSO (debtor days — how quickly your customers pay), DPO (creditor days — how slowly you pay suppliers) and inventory turnover (for trading companies — how quickly your stock is sold). Efficiency is about working capital: the faster the cycle turns, the less capital is tied up in daily operations and the more is freed for investment and growth. Data is pulled from DebtorGate (DSO), CashGate (DPO) and KpiGate (turnover). A high efficiency score signals a well-oiled business.

The Growth component measures two things: revenue growth rate (year-over-year percentage change in net revenue — target: positive, ideally above 5%) and customer growth (net new active customers). Growth is included because a stagnating business in a growing market is effectively losing ground — and because growth is a prerequisite for absorbing the inflation that erodes margins every year. A score of 100 requires revenue growth above 20% and positive customer growth. A score of 0 indicates declining revenue and customer loss. For mature businesses, a score of 40–60 is perfectly normal and not concerning. The Compliance component measures three things: document completeness (percentage of transactions with correct documentation — target: 100%), VAT accuracy (deviation between calculated and filed VAT — target: below 0.1%), and deadline compliance (percentage of deadlines met in the past year — target: 100%). Data is pulled from ComplianceGate and MomsGate. Compliance only weighs 10%, but a score of 0 here is a serious signal: it means basic bookkeeping and filing obligations are not being met, which can lead to tax audits, fines and in extreme cases forced dissolution.

Your composite score falls into one of five bands: Critical (0–30) means multiple dimensions are in the red and urgent action is needed — typically a liquidity crisis, negative equity or serious compliance failures. Concerning (31–50) indicates weaknesses on at least two dimensions and risk of deterioration. Acceptable (51–70) is the most common band for Danish SMEs: the business is running, but there are concrete improvement points. Good (71–85) signals a healthy company with solid KPIs. Excellent (86–100) is rare and requires top performance across all six dimensions. Freja doesn't just show the score — it decomposes it and suggests concrete improvements prioritised by impact. If your liquidity sub-component is 35 because your DSO is 62 days, Freja suggests: 'Reduce DSO from 62 to 40 days by activating automatic reminders in DebtorGate. Expected effect: liquidity sub-component rises from 35 to 55, composite health score from 58 to 63.' This link between score, diagnosis and action is what makes the health score a management tool rather than just a status report. And because the score is calculated daily, you can see the effect of your improvements in real time.