Finance KPIs

Every commercial organization exists to make a profit, and the financial health of an organization is essential to its success. Financial health is not a singular parameter. It is made up of numerous variables, which can be measured and tracked using KPIs.

What are Financial KPIs?

Financial KPIs are key metrics that can help measure financial performance of the organization at-a-glance. Financial KPIs may include metrics related to expenses, debt, investments, assets and liabilities, profits, revenues and other important financial outcomes of the organization. Tracking all the important financial KPIs gives insights about the financial health of the organization and helps the leadership team make major business-critical decisions in a timely manner without having to micro-manage smaller issues.

Types of Financial KPIs

There are five categories of financial KPIs. They are:

  1. Profitability KPIs
  2. Liquidity KPIs
  3. Efficiency KPIs
  4. Valuation KPIs
  5. Leverage KPIs

These categories encompass numerous financial KPIs that measure performance of your business. However, choosing the best KPIs for your business requires a deeper understanding of different financial KPIs and the ability to track each metric and determine whether they matter to your business strategy. Only then you can prioritize your top KPIs that help you produce the best outcomes for the organization.

Important KPIs and metrics to track financial performance

Following are the important KPIs that you need to know about, in order to maintain the financial health of your organization.

Sharp Ration

Category: Finance KPIs

Sharpe Ratio

In order to be sound in your financial goals, you need to have a great source of knowledge on every...

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Asset Coverage Ratio

Category: Finance KPIs

Asset Coverage Ratio

This article covers the far-reaching topic of the asset coverage ratio. We’re talking about a risk measurement whose aim is...

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Return on Assets

Category: Finance KPIs

Return on Assets

The return on total assets can show if the managing team is effective at earning money from the company’s assets...

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Retention Ratio

Category: Finance KPIs

Retention Ratio

The retention ratio or plow back ratio is the calculation that shows you exactly what percentage of your net income...

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Residual Income

Category: Finance KPIs

Residual Income

Residual income refers to the amount of money that is left after all the expenses have been paid for a...

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Receivables Turnover Ratio

Category: Finance KPIs

Receivables Turnover Ratio

To start with, the accounts receivable turnover represents an efficiency ratio. Thus, its main purpose is to assess the number...

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R-Squared (R2)

Category: Finance KPIs

R-Squared (R2)

Also known as the coefficient of determination, r-squared is the statistical measurement that comes from the correlation made between the...

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quick_ratio_acid_est

Category: Finance KPIs

Quick Ratio – Acid Test

The quick ratio, also known as acid test ratio, is used to measure a company’s ability to pay off its...

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First Year Voluntary Termination Rate

Category: Finance KPIs

Profit Margin Ratio

In order to measure the amount of net income earned by a company with each dollar sales that are generated...

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Price to Sales

Category: Finance KPIs

Price to Sales

Also a financial metric, the price to sales ratio is used to measure the value that the investors put on...

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Price to Earnings P/E Ratio

Category: Finance KPIs

Price to Earnings P/E Ratio

In today’s post, we’d like to focus our attention on the price to earnings ratio. This is a prospect ratio...

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Total Visits

Category: Finance KPIs

Price to Cash Flow

The price of a company is compared to the underlying cash flow by using the Price to Cash Flow profitability...

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Price to Book Ratio

Category: Finance KPIs

Price to Book Ratio

The price to book ratio is renowned as an important financial valuation tool. Essentially, it is utilized in an attempt...

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present_value

Category: Finance KPIs

Present Value (PV)

The present value is, many times, referred to as the discounted value – and it a widely used financial formula....

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Preferred Dividend Coverage Ratio

Category: Finance KPIs

Preferred Dividend Coverage Ratio

This article will focus on presenting the specifications of the preferred dividend coverage ratio. This ratio assesses a corporation’s financial...

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PEG Ratio

Category: Finance KPIs

PEG Ratio

What does the PEG ratio stand for? Why is it used and how could we define it? This article focuses...

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Payback Period

Category: Finance KPIs

Payback Period

The payback period is a financial capital budgeting method that estimates the amount of time needed for an investment to...

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accounts_payable_turnover_ratio

Category: Finance KPIs

Accounts Payable Turnover Ratio

The accounts payable turnover ratio is a liquidity ratio that indicates the ability a company has to repay its accounts...

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First Year Voluntary Termination Rate

Category: Finance KPIs

Operating Leverage

If you’ve accessed this page, you are probably eager to find out more about operating leverage. Well, operating leverage is...

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Asset Turnover Ratio

Category: Finance KPIs

Operating Income

If you clicked on this article, you’re probably interested in operating income and what it means. Well, it will tell...

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operating_cash_flow

Category: Finance KPIs

Operating Cash Flow

If you’re a beginner when it comes to finances, you would probably want to know what the operating cash flow...

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Cycle Time to Process Payroll

Category: Finance KPIs

Net Operating Profit After Tax

If you wanted to know what the Net Operating Profit after Tax is and how it works, you came to...

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net_working_capital

Category: Finance KPIs

Net Working Capital

Ever heard the term “networking capital”, but you didn’t know what it means? If that’s the case, this article comes...

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Net Profit Margin

Category: Finance KPIs

Net Profit Margin

The net profit margin is used to find out whether a business is poorly managed and to see future profitability....

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Net Present Value (NPV)

Category: Finance KPIs

Net Present Value (NPV)

The net present value is used to calculate the difference between the cash inflows and outflows of a potential investment...

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Net Operating Income

Category: Finance KPIs

Net Operating Income

If you work for a real estate agency, you may have heard about net operating income. This is a profitability...

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Net Interest Margin

Category: Finance KPIs

Net Interest Margin

How well you administer your money is mainly up to you. However, the net interest margin ratio is a term...

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First Year Voluntary Termination Rate

Category: Finance KPIs

Net Income

Net income also known as bottom line or net profit- is the amount of money that remains after you pay...

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Net Fixed Assets

Category: Finance KPIs

Net Fixed Assets

Ever wondered how much 100 gums cost 20 years ago compared to today? Such calculations are simple, but for a...

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Return on Capital Employed

Category: Finance KPIs

Return on Capital Employed

To better understand what the return on capital employed means, first we need to understand what the capital employed is....

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Total Visits

Category: Finance KPIs

Long Term Debt to Assets

When it comes to being in debt, no one likes that, especially companies, where “profit” is the most used word....

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Net Debt

Category: Finance KPIs

Net Debt

Everybody must know and check their financial situation on a regular basis. Some people check their wallets or credit cards...

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Marginal Revenue

Category: Finance KPIs

Marginal Revenue

This is a term used in microeconomics, and it’s quite a well-known formula. However, in order to get a better...

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Margin of Safety

Category: Finance KPIs

Margin of Safety

Everybody needs to break even, so this ratio will give you the insight of what goes too much or too...

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Loan to Value

Category: Finance KPIs

Loan to Value

Abbreviated as LTV, the loan to value ratio is a risk assessment measurement. It is used to calculate the amount...

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internal_rate_of_return

Category: Finance KPIs

Internal Rate of Return

The internal rate of return, also abbreviated as IRR, is used to identify which future projects or capital investments will...

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Interest Coverage Ratio

Category: Finance KPIs

Interest Coverage Ratio

The financial ratio known as interest coverage ratio determines whether a company is able to make interest payments on its...

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gross_vs_net

Category: Finance KPIs

Gross vs. Net

Gross and net usually refer to income and it is also something that seems quite difficult to understand for some...

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Gross Profit

Category: Finance KPIs

Gross Profit

The profitability ratio called gross profit (also known as gross profit margin) is used to calculate the percentage of sales...

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Goodwill to Assets

Category: Finance KPIs

Goodwill to Assets

The financial measurement called goodwill to assets is used to compare the intangible assets of a company – like a...

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Total Visits

Category: Finance KPIs

Free Cash Flow

Usually abbreviated as FCF, the Free Cash Flow is an efficiency as well as a liquidity ratio. It calculates how...

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Fixed Charge Coverage Ratio

Category: Finance KPIs

Fixed Charge Coverage Ratio

Whether a company is able to pay off its fixed charges or expenses with its own income or not –...

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Fixed Asset Turnover Ratio

Category: Finance KPIs

Fixed Asset Turnover Ratio

If you’re wondering what this ratio is, you’re just about to find out. It’s an efficiency ratio that measures a...

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Return on Equity

Category: Finance KPIs

Return on Equity

Before we engage in explaining the formula, you need to know what the difference between a shareholder and a stakeholder...

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Expense Ratio

Category: Finance KPIs

Expense Ratio

Have you heard the term “expense ratio”, but it confused you? In that case, you’ve come to the right place,...

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Return On Invested Capital

Category: Finance KPIs

Return On Invested Capital

If you are the accountant of a business, there are certain things that you may want to keep in mind...

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Equity Ratio

Category: Finance KPIs

Equity Ratio

An equity ratio calculates the number of assets financed by owners’ investments. Basically, it does so by comparing the total...

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First Year Voluntary Termination Rate

Category: Finance KPIs

Return on Investment

As an investor, you will want to know that the company you are placing your bets on will bring a...

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Return On Net Assets

Category: Finance KPIs

Return On Net Assets

RONA - It may sound like some fancy name for a fancy person, but it’s actually the name of a...

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Equity Multiplier

Category: Finance KPIs

Equity Multiplier

You may be wondering what equity multiplier means. Well, it’s a leverage ratio that basically measures the part of the...

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Total Visits

Category: Finance KPIs

Return On Operating Assets

A company needs a fair number of operating assets in order to continue functioning. This is practically what keeps the...

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Return On Retained Earnings

Category: Finance KPIs

Return On Retained Earnings

The amount of money you allocate for the growth of the company tells a lot about the growth potential of...

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Return on Sales

Category: Finance KPIs

Return on Sales

This financial ratio is used to show how efficient a company is at using its revenue in order to generate...

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Blog featured image

Category: Finance KPIs

Rule of 72

If you want to see for how long you have to invest your money in order to double it, with...

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sales-to-admin-expenses

Category: Finance KPIs

Sales to Admin Expenses

This efficiency ratio is used to measure if a company is efficient at managing its non-operating expenses in order to...

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Enterprise Value explained

Category: Finance KPIs

Enterprise Value explained

The enterprise value (EV) is a direct representative of the economic value of a company – in other words, how...

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The basics of EBITDA

Category: Finance KPIs

The basics of EBITDA

When you want to understand how a certain company thrives in a particular industry, you need to have certain formulas...

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First Year Voluntary Termination Rate

Category: Finance KPIs

Sortino Ratio

The Sortino ratio is an alternative to the Sharpe ratio, as it isolates the effects volatility has on investments. This...

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EBITA

Category: Finance KPIs

EBITA and how It works

EBITA, short for Earnings before Interest Taxes and Amortization, is a formula that calculates the operational profitability of a company...

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Times interest Earned Ratio

Category: Finance KPIs

Times interest Earned Ratio

Also called the interest coverage ration sometimes, the times interest earned ratio is a coverage ratio. It can calculate the...

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understanding_EBIT

Category: Finance KPIs

Understanding EBIT

Shortened from Earnings before Interest and Taxes, and also referred to as the operating income, is an equation that measures...

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Treynor Ratio

Category: Finance KPIs

Treynor Ratio

Also known as the reward to volatility ratio sometimes, the Treynor ratio is basically a risk assessment formula. It can...

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DuPont Analysis – The Basics

Category: Finance KPIs

DuPont Analysis – The Basics

While the name may sound very fancy, this is actually a crucial method to understand the finance point of a...

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Dividend Yield

Category: Finance KPIs

Dividend Yield

Every fundamental analysis tool works differently for every investor – so in order to understand the stocks, you need to...

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WACC

Category: Finance KPIs

WACC

Were you looking for information about the Weighted Average Cost of Capital? In that case, you’re just in the perfect...

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Dividend Payout Ratio

Category: Finance KPIs

Dividend Payout Ratio

The DPR (Dividend Payout Ratio) is the dividend amount that has been given to shareholders as payment – and which...

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working_capital_ratio

Category: Finance KPIs

Working Capital Ratio

If you’re here, it’s because you are most likely curious about what the working capital ratio is and how it...

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First Year Voluntary Termination Rate

Category: Finance KPIs

Z-Score

Wondering what a Z-Score is? Well, it’s basically an estimation of the number of standard deviations a point is away...

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Defensive Interval Ratio (DIR)

Category: Finance KPIs

Defensive Interval Ratio (DIR)

The defensive interval ratio is considered to be one of the most valuable liquidity ratios. Expressly, it focuses on calculating...

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What Is the Debt to Income Ratio?

Category: Finance KPIs

What Is the Debt to Income Ratio?

The debt to income ratio is considered to be a valuable number – some people even say that it is...

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Total Visits

Category: Finance KPIs

The Debt to equity ratio: what you should know

The debt to equity ratio is another important liquidity ratio. Fundamentally, it compares a firm’s total debt in relation to...

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The debt to capital ratio

Category: Finance KPIs

The debt to capital ratio

An important liquidity ratio, the debt to capital ratio measures a company’s strategy when it comes to using its financial...

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Defining the debt to asset ratio

Category: Finance KPIs

Defining the debt to asset ratio

To begin with, the debt to asset ratio could be defined as a leverage ratio, calculating the total amount of...

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debt_service_coverage_ratio

Category: Finance KPIs

The Debt Service Coverage Ratio (DSCR)

The debt service coverage ratio is another financial ratio that provides insight into a company’s financial situation. Expressly, it determines...

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Debt Ratio

Category: Finance KPIs

Debt Ratio

Today, we will concentrate our attention on the debt ratio – a solvency ratio whose purpose is to measure a...

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Blog featured image

Category: Finance KPIs

Inventory Turnover Ratio

Now we’ll look into the efficiency ratio that is the inventory turnover ratio. This ratio is used to determine whether...

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Days Sales in Inventory

Category: Finance KPIs

Days Sales in Inventory

How many days will it take for your company to sell its entire inventory? Well, if you have no idea,...

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Blog featured image

Category: Finance KPIs

Days Payable Outstanding

This financial ratio compares the cost of sales, accounts payable, and the number of bills that remain unpaid in order...

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First Year Voluntary Termination Rate

Category: Finance KPIs

Current Ratio

The current ratio refers to a company’s ability to use its current assets in order to pay off its short-term...

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Asset Turnover Ratio

Category: Finance KPIs

Cost of Goods Sold

Also abbreviated as COGS, the cost of goods sold measures the direct costs that were sustained during the production of...

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Web Traffic Concentration

Category: Finance KPIs

Correlation Coefficient

The statistical measure of the association or dependence of two numbers is known as the correlation coefficient. Also known as...

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Total Visits

Category: Finance KPIs

Contribution Margin

The difference between a company’s total sales revenue and variable costs is also known as a contribution margin. Sometimes used...

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Cycle Time to Process Payroll

Category: Finance KPIs

Cash Ratio

A company’s ability to pay off its current obligations with cash equivalents or cash only is determined with the help...

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cash_flow_coverage_ratio

Category: Finance KPIs

Cash Flow Coverage Ratio

Naturally, a company must be able to pay off its obligations with the operating cash flows it has. This ability...

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Category: Finance KPIs

Cash Earnings/ Share

A company’s financial performance can be measured by using a certain profitability ratio, namely, Cash EPS, which is more commonly...

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Blog featured image

Category: Finance KPIs

The Cash Conversion Cycle

The odds are that you’ve stumbled across the term cash conversion cycle, and you want to comprehend its individual specifications....

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The Capitalization Ratio

Category: Finance KPIs

The Capitalization Ratio

The capitalization ratio, also referred to as the cap ratio, represents a financial ratio that measures a firm’s solvency. It...

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cagr

Category: Finance KPIs

CAGR

The percentage of an investment, in terms of it increasing and decreasing year over year, is determined with the financial...

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First Year Voluntary Termination Rate

Category: Finance KPIs

Break-Even Point Analysis

To start with, the break-even point analysis represents a measurement system that determines the margin of safety. It does this...

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blog-img1

Category: Finance KPIs

Average Payment Period – The Specifics

Also known as an important solvency ratio, the average payment period (APP) assesses how much time it takes for a...

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Average Inventory Ratio

Category: Finance KPIs

Average Inventory Ratio

The purpose of this article is to explain the characteristics of the average inventory ratio, how to calculate the ratio,...

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Total Visits

Category: Finance KPIs

Asset Turnover Ratio: The Basics

The asset turnover ratio is a widely used efficiency ratio that analyzes a company’s capability of generating sales. It accomplishes...

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Accumulated Depreciation Ratio Explained

Category: Finance KPIs

Accumulated Depreciation Ratio Explained

In today’s post, we will focus on explaining the specifics of the accumulated depreciation ratio. We’re talking about a fixed...

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