Have you ever checked your credit score and noticed the breakdown showing what drives your score and how you’re performing against each driver? The new-and-improved Clockwork Score is just like that, but for your business!  We’ll show you how the score is being calculated, with intelligent commentary to explain exactly what Clockwork is seeing in your data, and real-time alerts for major red flags like projected cash shortfalls. Pretty cool!

The Clockwork Score analyzes 6 key financial drivers to give you an overall health score from A+ to D

An image of the Clockwork Score than analyzes key financial drivers

The Clockwork Score broadly looks at your revenue growth, profitability, and cash flow - with more weight placed on the profitability and cash flow drivers.  Each driver was included in the Clockwork Score for a reason, so it’s important to understand what each one means for your business. 

Revenue Growth

  • This one is pretty straightforward. If revenue is trending upward, that means sales are growing, which helps your score. If revenue is declining, that’ll hurt your score. 


  • EBITDA: Clockwork looks at your EBITDA (or Earnings Before Interest, Tax, Depreciation & Amortization) to determine whether your business has been profitable recently (ignoring the impact of Interest, Taxes, Depreciation & Amortization). If EBITDA is positive, that means you’re generating enough revenue to cover your costs of goods sold and operating expenses, which helps your score. If EBITDA is negative, that hurts your score, because your costs outweigh revenue, and you’ll either need to grow sales, manage costs, or a combination.

  • EBITDA Margin Trend: EBITDA Margin is EBITDA divided by Revenue, but this driver doesn’t just look at profitability. It also looks at whether profitability is growing or decreasing over time. For example, an unprofitable company (with negative EBITDA) might be growing revenue faster than expenses, which means they’re on the path to profitability - this would be a good thing. On the flip side, a profitable company might be growing expenses faster than revenue, which is decreasing their margins - not good.

Cash Flow

  • Net Cash Flow: Phew, back to a simple one! If Net Cash Flow has been positive recently, that means your bank balance has been growing, which helps your score. Negative Net Cash Flow hurts your score. Too easy.

  • Net Cash Flow Trend: Instead of simply looking at whether Net Cash Flow flow is positive, this driver looks at how your Net Cash Flow has been trending. Imagine a company with positive Net Cash Flow, but their cash balance is growing by a smaller amount each month - might be cause for concern. On the flip side, a business might burn more cash than they generate, but if that burn rate is decreasing each month, they’re closing the gap, which is a good thing. 

  • Cash Forecast: You didn’t think the Clockwork Score was only based on the past, did you? It also looks at your Cash Flow forecast, to determine whether your cash balance is forecasted to grow, decrease and/or disappear in the future. The Cash Flow forecast accounts for all of your revenue and expense assumptions, the unique cash timing behavior in your business, assumptions around specific invoices and bills, loans, and more…so we wanted to make sure the future impact of those plans was also accounted for in the score.

To learn more about how Clockwork helps small businesses realize and work towards a better financial future, create your account to start a free 14-day trial (no credit card required). Connect your QuickBooks Online or Xero account to create your first financial model in minutes.

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