Free-Cash-Flow

Free Cash Flow

| Category: Finance KPIs.

Usually abbreviated as FCF, the Free Cash Flow is an efficiency as well as a liquidity ratio. It calculates how much money a company is able to generate, compared to its costs of running and expansion. As you might have guessed it, the free cash flow means the money that a company produces in excess,… Read more

fixed-charge-coverage-ratio

Fixed Charge Coverage Ratio

| Category: Finance KPIs.

Whether a company is able to pay off its fixed charges or expenses with its own income or not – before income taxes and interests – is determined by the fixed charge coverage ratio. This financial ratio can be seen as an expanded version of the times interest coverage ratio or times interest earned ratio…. Read more

Fixed-Asset-Turnover-Ratio

Fixed Asset Turnover Ratio

| Category: Finance KPIs.

If you’re wondering what this ratio is, you’re just about to find out. It’s an efficiency ratio that measures a firm’s return on their investment in plant, property, and equipment. It does so by comparing fixed assets with net sales. So, it estimates how efficient a company is in producing sales with its equipment and… Read more

Return on Equity

Return on Equity

| Category: Finance KPIs.

Before we engage in explaining the formula, you need to know what the difference between a shareholder and a stakeholder is. A shareholder holds a part of the company through shares of stock and a stakeholder is interested in the performance of a company. With these being said, it’s time to explain what Return on… Read more

Expense-Ratio

Expense Ratio

| Category: Finance KPIs.

Have you heard the term “expense ratio”, but it confused you? In that case, you’ve come to the right place, because you’re going to find out more about it. It is basically an efficiency ratio, and it calculates the expenses for management as a percentage of total funds that are invested in a mutual fund…. Read more

return-on-invested-capital

Return On Invested Capital

| Category: Finance KPIs.

If you are the accountant of a business, there are certain things that you may want to keep in mind –one of these things being how to calculate the Return On Investing Capital (ROIC). ROIC is responsible for measuring the profitability of a company in relation to capital invested in the business. Is growth all… Read more

equity-ratio

Equity Ratio

| Category: Finance KPIs.

An equity ratio calculates the number of assets financed by owners’ investments. Basically, it does so by comparing the total equity in the company to the total assets. Moreover, you need to know that the equity ratio is a solvency ratio or investment leverage. This ratio features two important financial concepts for a sustainable and… Read more

Return on Investment

Return on Investment

| Category: Finance KPIs.

As an investor, you will want to know that the company you are placing your bets on will bring a high return. Regardless of you are a bondholder or a shareholder, a high return on investment will ensure that you are actually profiting from this business. This is particularly why you might want to make… Read more

return-on-net-assets

Return On Net Assets

| Category: Finance KPIs.

RONA – It may sound like some fancy name for a fancy person, but it’s actually the name of a finance formula – albeit one that is just as fancy. This performance ratio can compare the generated income from a company to fixed assets needed to get the income. Hence, with this formula, you can… Read more

Equity-Multiplier

Equity Multiplier

| Category: Finance KPIs.

You may be wondering what equity multiplier means. Well, it’s a leverage ratio that basically measures the part of the company’s assets financed by equity. So, it shows the percentage of the assets that are owned or financed by shareholders. Moreover, this multiplier can show the level of debt that was used by a company… Read more

Return On Operating Assets

Return On Operating Assets

| Category: Finance KPIs.

A company needs a fair number of operating assets in order to continue functioning. This is practically what keeps the company going. The return on operating assets (ROOA) turns that in a percentage – in other words, it calculates how much a company earns by investing in that operating asset. But what is, precisely, this… Read more

return_on_retained_earnings

Return On Retained Earnings

| Category: Finance KPIs.

The amount of money you allocate for the growth of the company tells a lot about the growth potential of a company, as well as its efficiency. A higher return on retained earnings (RORE) would suggest that reinvesting in the business should be the next course. A lower return, however, would say that you ought… Read more