Business ratios and Key Performance Indicators (KPIs) are crucial for assessing a company’s financial health, operational efficiency, and overall performance. They provide valuable insights for decision-making, goal-setting, and strategic planning.
Here’s an introduction to some important business ratios and KPIs:
| Row | Category | KPI | Formula |
|---|---|---|---|
| 1 | Finance | Profit Margin | (Net Profit / Revenue) * 100 |
| 2 | Finance | Return on Investment (ROI) | (Net Profit / Total Investment) * 100 |
| 3 | Finance | Earnings Per Share (EPS) | (Net Income – Preferred Dividends) / Average Outstanding Shares |
| 4 | Finance | Debt-to-Equity Ratio | Total Debt / Total Equity |
| 5 | Finance | Current Ratio | Current Assets / Current Liabilities |
| 6 | Finance | Working Capital Ratio | Current Assets / Current Liabilities |
| 7 | Finance | Gross Profit Margin | (Gross Profit / Revenue) * 100 |
| 8 | Finance | Operating Expense Ratio | (Operating Expenses / Revenue) * 100 |
| 9 | Finance | Return on Assets (ROA) | (Net Income / Total Assets) * 100 |
| 10 | Finance | Return on Equity (ROE) | (Net Income / Shareholders’ Equity) * 100 |
| 11 | Finance | Quick Ratio | (Current Assets – Inventory) / Current Liabilities |
| 12 | Finance | Operating Cash Flow Ratio | Operating Cash Flow / Total Revenue |
| 13 | Finance | Inventory Turnover Ratio | Cost of Goods Sold / Average Inventory |
| 14 | Finance | Accounts Receivable Turnover Ratio | Total Revenue / Average Accounts Receivable |
| 15 | Finance | Days Sales Outstanding (DSO) | (Accounts Receivable / Total Credit Sales) * Number of Days |
| 16 | Finance | Days Payable Outstanding (DPO) | (Accounts Payable / Total Credit Purchases) * Number of Days |
| 17 | Finance | Fixed Asset Turnover Ratio | Revenue / Average Fixed Assets |
| 18 | Finance | Cash Conversion Cycle | DSO + DIO – DPO |
| 19 | Finance | Return on Invested Capital (ROIC) | (Net Operating Profit After Tax / Invested Capital) * 100 |
| 20 | Finance | COGS to Revenue Ratio | (COGS / Revenue) * 100 |
| 21 | Finance | Net Working Capital | Current Assets – Current Liabilities |
| 22 | Finance | Interest Coverage Ratio | EBIT / Interest Expense |
| 23 | Finance | Financial Leverage Ratio | Average Total Assets / Average Shareholders’ Equity |
| 24 | Finance | Capital Adequacy Ratio | (Tier 1 Capital + Tier 2 Capital) / Risk-Weighted Assets |
| 25 | Finance | Net Profit | Revenue – Total Expenses |
| 26 | Investing | Return on Investment (ROI) | (Net Profit / Total Investment) * 100 |
| 27 | Investing | Net Present Value (NPV) | Present Value of Cash Inflows – Present Value of Cash Outflows |
| 28 | Investing | Internal Rate of Return (IRR) | Rate at which NPV equals zero |
| 29 | Investing | Payback Period | Time taken to recover initial investment |
| 30 | Investing | Return on Equity (ROE) | (Net Income / Shareholders’ Equity) * 100 |
| 31 | Investing | Return on Assets (ROA) | (Net Income / Total Assets) * 100 |
| 32 | Investing | Debt Service Coverage Ratio (DSCR) | Net Operating Income / Total Debt Service |
| 33 | Investing | Cash Return on Investment (CROI) | (Operating Cash Flow / Initial Investment) * 100 |
| 34 | Investing | Total Shareholder Return (TSR) | Capital Gains + Dividends |
| 35 | Investing | Dividend Yield | (Dividends per Share / Share Price) * 100 |
| 36 | Investing | Price-to-Earnings (P/E) Ratio | Share Price / Earnings per Share |
| 37 | Investing | Price-to-Book (P/B) Ratio | Share Price / Book Value per Share |
| 38 | Investing | Economic Value Added (EVA) | Net Operating Profit After Tax – (Capital * Cost of Capital) |
| 39 | Investing | Free Cash Flow (FCF) | Operating Cash Flow – Capital Expenditure |
| 40 | Investing | Market Capitalisation | Share Price * Total Number of Shares Outstanding |
| 41 | Investing | Book Value per Share | Total Equity / Total Outstanding Shares |
| 42 | Investing | Cash Flow Return on Investment (CFROI) | (Operating Cash Flow / Capital Employed) * 100 |
| 43 | Investing | Price-to-Sales (P/S) Ratio | Share Price / Sales per Share |
| 44 | Investing | Working Capital Ratio | Current Assets / Current Liabilities |
| 45 | Investing | Asset Turnover Ratio | Revenue / Total Assets |
| 46 | Investing | Dividend Payout Ratio | (Dividends per Share / Earnings per Share) * 100 |
| 47 | Investing | Net Asset Value (NAV) | Total Assets – Total Liabilities |
| 48 | Investing | Return on Capital (ROC) | (Operating Income / Invested Capital) * 100 |
| 49 | Investing | Growth Rate | ((Current Value – Previous Value) / Previous Value) * 100 |
| 50 | Investing | Cash Conversion Efficiency | (Operating Cash Flow / Revenue) * 100 |
| 51 | Accounting | Accounts Payable Turnover Ratio | Total Purchases / Average Accounts Payable |
| 52 | Accounting | Accounts Payable to Sales Ratio | (Accounts Payable / Total Sales) * 100 |
| 53 | Accounting | Accounts Receivable Aging | Segregation of Accounts Receivable by Age |
| 54 | Accounting | Allowance for Doubtful Accounts Ratio | (Allowance for Doubtful Accounts / Accounts Receivable) * 100 |
| 55 | Accounting | Bad Debt Ratio | (Bad Debt Expense / Total Credit Sales) * 100 |
| 56 | Accounting | Cost of Goods Sold (COGS) | Beginning Inventory + Purchases – Ending Inventory |
| 57 | Accounting | Depreciation Expense Ratio | (Depreciation Expense / Total Revenue) * 100 |
| 58 | Accounting | Fixed Asset Turnover Ratio | Revenue / Average Fixed Assets |
| 59 | Accounting | Inventory Days | (Average Inventory / Cost of Goods Sold) * Number of Days |
| 60 | Accounting | Inventory Write-downs | Original Inventory Value – Realisable Value |
| 61 | Accounting | Accounts Receivable Turnover | Total Credit Sales / Average Accounts Receivable |
| 62 | Accounting | Net Profit Margin | (Net Profit / Revenue) * 100 |
| 63 | Accounting | Operating Income | Gross Profit – Operating Expenses |
| 64 | Accounting | Payroll Expense Ratio | (Total Payroll Expenses / Total Revenue) * 100 |
| 65 | Accounting | Revenue Recognition Ratio | Recognised Revenue / Total Revenue |
| 66 | Accounting | Working Capital Turnover Ratio | Revenue / Average Working Capital |
| 67 | Accounting | Tax Rate | (Total Taxes Paid / Taxable Income) * 100 |
| 68 | Accounting | Fixed Asset Efficiency | Revenue / Net Fixed Assets |
| 69 | Accounting | Capitalisation Ratio | (Total Debt / Total Equity) * 100 |
| 70 | Accounting | Cost of Sales | Beginning Inventory + Purchases – Ending Inventory |
| 71 | Accounting | Days Payable Outstanding (DPO) | (Accounts Payable / Total Credit Purchases) * Number of Days |
| 72 | Accounting | Days Sales Outstanding (DSO) | (Accounts Receivable / Total Credit Sales) * Number of Days |
| 73 | Accounting | Days Inventory Outstanding (DIO) | (Average Inventory / Cost of Goods Sold) * Number of Days |
| 74 | Accounting | Return on Capital Employed (ROCE) | (Operating Profit / Total Capital Employed) * 100 |
| 75 | Accounting | Interest Expense Ratio | (Interest Expense / Total Revenue) * 100 |
| 76 | Cash Flow | Operating Cash Flow | Cash from Operating Activities |
| 77 | Cash Flow | Free Cash Flow | Operating Cash Flow – Capital Expenditure |
| 78 | Cash Flow | Cash Conversion Cycle | DSO + DIO – DPO |
| 79 | Cash Flow | Cash Ratio | (Cash and Cash Equivalents / Current Liabilities) * 100 |
| 80 | Cash Flow | Operating Cash Flow Ratio | Operating Cash Flow / Total Revenue |
| 81 | Cash Flow | Net Cash | Total Cash and Cash Equivalents |
| 82 | Cash Flow | Net Cash Flow | Cash Inflows – Cash Outflows |
| 83 | Cash Flow | Cash Flow to Debt Ratio | Operating Cash Flow / Total Debt |
| 84 | Cash Flow | Cash Flow per Share | Operating Cash Flow / Total Outstanding Shares |
| 85 | Cash Flow | Cash Flow Coverage Ratio | Operating Cash Flow / Total Debt Service |
| 86 | Cash Flow | Cash Flow Margin | (Operating Cash Flow / Revenue) * 100 |
| 87 | Cash Flow | Cash Flow Yield | (Operating Cash Flow / Share Price) * 100 |
| 88 | Cash Flow | Cash Flow Return on Investment | (Operating Cash Flow / Capital Employed) * 100 |
| 89 | Cash Flow | Cash Flow from Financing Activities | Cash Flow related to Financing Activities |
| 90 | Cash Flow | Cash Flow from Investing Activities | Cash Flow related to Investing Activities |
| 91 | Cash Flow | Cash Flow from Operating Activities | Cash Flow related to Operating Activities |
| 92 | Cash Flow | Net Cash Flow from Operating Activities | Cash Flow from Operating Activities – Capital Expenditure |
| 93 | Cash Flow | Net Cash Flow from Investing Activities | Cash Flow from Investing Activities – Capital Expenditure |
| 94 | Cash Flow | Net Cash Flow from Financing Activities | Cash Flow from Financing Activities – Dividends Paid |
| 95 | Cash Flow | Cash Flow Forecast Accuracy | Actual Cash Flow vs. Forecasted Cash Flow |
| 96 | Cash Flow | Cash Flow Adequacy Ratio | Cash Flow from Operations / Cash Flow Obligations |
| 97 | Cash Flow | Cash Flow Volatility | Standard Deviation of Cash Flow |
| 98 | Cash Flow | Cash Flow to Capex Ratio | Operating Cash Flow / Capital Expenditure |
| 99 | Cash Flow | Cash Flow Return on Equity | (Operating Cash Flow / Shareholders’ Equity) * 100 |
| 100 | Cash Flow | Cash Flow Per Share Growth | ((Current Cash Flow per Share – Previous Cash Flow per Share) / Previous Cash Flow per Share) * 100 |
References and Further Reading
[1] 100 Key Performance Indicators | Plecto
https://www.plecto.com/blog/sales-performance/100-key-performance-indicators/
[2] [PDF] Guide to key performance indicators – PwC recommended reading
https://www.pwc.com/gx/en/audit-services/corporate-reporting/assets/pdfs/uk_kpi_guide.pdf
[3] [PDF] Key Performance Indicators – Failte Ireland
https://www.failteireland.ie/FailteIreland/media/WebsiteStructure/Documents/2_Develop_Your_Business/1_StartGrow_Your_Business/Key-Performance-Indicators.pdf
[4] [PDF] Key Performance Indicators (KPIs) Handbook for the 2023-2028
https://www.theglobalfund.org/media/12681/strategy_globalfund2023-2028-kpi_handbook_en.pdf
[5] [PDF] Key Performance Indicators – FirstGroup plc
https://www.firstgroupplc.com/~/media/Files/F/Firstgroup-Plc/indexed-pdfs/2022-ARA/10-firstgroup-annual-report-2022-key-performance-indicators.pdf
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