Return-on-Capital-Employed

Return on Capital Employed

| Category: Finance KPIs.

To better understand what the return on capital employed means, first we need to understand what the capital employed is. By employing capital, you will certainly make a profit, right? So, this is the amount of capital used for making profits. Back to the return on capital employed, this term or ratio means the amount… Read more

Long-Term-Debt-to-Assets

Long Term Debt to Assets

| Category: Finance KPIs.

When it comes to being in debt, no one likes that, especially companies, where “profit” is the most used word. They may put you in a tough situation but mastering your financial skills can mean the difference between being bankrupt and being successful. The long-term debt to total assets ratio of a business reveals the… Read more

Net-Debt

Net Debt

| Category: Finance KPIs.

Everybody must know and check their financial situation on a regular basis. Some people check their wallets or credit cards daily. But when you rule over a company, it’s not that simple. For this, you need the net debt calculation that will show you the financial situation and health of your business. Imagine that you… Read more

Marginal-Revenue

Marginal Revenue

| Category: Finance KPIs.

This is a term used in microeconomics, and it’s quite a well-known formula. However, in order to get a better understanding of what marginal revenue means, you will need to know that this is usually steady and won’t fluctuate. But mainly, the definition of marginal revenue is the additional revenue generated by increasing sales by… Read more

Margin-of-Safety

Margin of Safety

| Category: Finance KPIs.

Everybody needs to break even, so this ratio will give you the insight of what goes too much or too little. In other words, the calculation is basically a subtraction that indicates how much you need to produce to be above the break-even point and get profit. At the same time, the calculation will also… Read more

Loan-to-Value

Loan to Value

| Category: Finance KPIs.

Abbreviated as LTV, the loan to value ratio is a risk assessment measurement. It is used to calculate the amount that has been loaned as a percentage of the collateral’s appraised value. Basically, it is a ratio that compares the purposed loan amount with the value of the property that’s being purchased – this determines… Read more

Internal-Rate-of-Return

Internal Rate of Return

| Category: Finance KPIs.

The internal rate of return, also abbreviated as IRR, is used to identify which future projects or capital investments will have an acceptable return – it is represented by a minimum discount rate. Basically, the internal rate of return is a rate that’s equal to the net present value of the future cash flows of… Read more

Interest-Coverage-Ratio

Interest Coverage Ratio

| Category: Finance KPIs.

The financial ratio known as interest coverage ratio determines whether a company is able to make interest payments on its debt or not and that done in a timely manner. Also a liquidity ratio, it does not refer to a company’s ability to make principle payments on a debt – when compared to the debt… Read more

Gross-vs-Net

Gross vs. Net

| Category: Finance KPIs.

Gross and net usually refer to income and it is also something that seems quite difficult to understand for some people. For example, you might have someone that refers to his salary using his net outcome and someone using his gross outcome – leaving the third person in the conversation confused because of the great… Read more

Gross-Profit

Gross Profit

| Category: Finance KPIs.

The profitability ratio called gross profit (also known as gross profit margin) is used to calculate the percentage of sales that are exceeding the costs of the sold goods. It all boils down to management, as this ratio shows if a company is using its labor and materials to produce certain products and sell them… Read more

gross-margin-ratio

Gross Margin Ratio

| Category: Sales KPIs.

Also a profitability ratio, the gross margin ratio compares a business’ gross margin to its net sales, measuring if a company sells its merchandise or inventory in a way that would bring it profit. Basically, the gross margin ratio – or gross profit ratio – makes the difference between the cost of merchandise and the… Read more

Goodwill-to-Assets

Goodwill to Assets

| Category: Finance KPIs.

The financial measurement called goodwill to assets is used to compare the intangible assets of a company – like a customer list, brand name, and its unique position in the industry – to the number of the company’s total assets. The result shows if the goodwill is recorded properly within that company. Basically, goodwill can… Read more