Finance KPIs

Here are the main KPIs for the Finance.  They are part of the Finance Dashboard or Balanced Scorecard.

Please see the following table.

-> Recommended bibliography about financial KPIs

Activity Subject Calculation
Leverage Capital Acquisition (Cash flow from operations – Dividends) ÷ Cash paid for acquisitions
Capital Employment Sales ÷ (owners equity – non-operating assets).
Capital Structure Long term debt ÷ (Shareholders equity + Long term debt)
Capital to Non-Current Assets Owners equity ÷ Non-Current Assets
Cash Balance (Cash x 365 days) ÷ (cost of sales [excluding depreciation])
Debt to Assets Total debt ÷ Total assets
Debt to Equity (Short Term Debt + Long term debt) ÷ Total shareholders equity
Debt Liabilities ÷ assets
Financial Leverage Total debt ÷ shareholders equity
Operating Leverage – OL % change in EBIT ÷ % change in Sales
Liquidity Age of assets Cumulative depreciation ÷ annual depreciation
Total current assets Cash and Equivalents + Receivables + Inventories + Other Current Assets
Other current assets Prepayments + deferred charges + amounts (other than trade accounts) due from parents and subsidiaries.
Net fixed assetss Plants + Equipments….
Other non-Current Assets Assets that are not assigned to Net Fixed Assets or intangibles.
Asset Turnover – AT Revenue ÷ Average Assets
Accounts Payable Turnover Total supplier purchases ÷ Average accounts Payable
Accounts Receivable Turnover Credit sales ÷ average accounts receivable
Current Ratio Current assets ÷ Current Liabilities
Working Capital – WC Current assets – Current Liabilities
Working Capital Provided by Net Income Net income – depreciation
Weighted Average Cost of Capital – WACC Sum of the proportion of debt financing x cost of debt capital x (1-company’s tax rate) + proportion of equity financing x cost of equity capital
Quick Ratio (Cash + short term investments + Accounts Receivable) ÷ Current Liabilities
Quick assets Cash + marketable securities + Accounts Receivable
Days of Liquidity (Quick assets x 365 days) ÷ years cash expenses
Cash Ratio (Cash + Cash equivalents) ÷ Current Liabilities
Cash Breakeven point (fixed costs – depreciation) ÷ contribution margin per unit
Cash Flow Return on Investment – CFROI Cash Flow ÷ Market value of capital employed
Cash Flow to Long term debt LTD Cash flow ÷ Long term debt
Cash Reinvestment Ratio Increases in fixed assets and working capital ÷ (Net income + Depreciation)
Cash Turnover (Cost of sales {excluding depreciation}) ÷ cash
Operating Inventory Turns / Inventory Turnover Ratio Cost of sales ÷ Average Inventory for the Period
Days Sales Outstanding – DSO Accounts Receivable ÷ total credit sales x number of days
Days Payable Outstanding – DPO Accounts Payable ÷ cost of sales x number of days
Cash Conversion Cycle – CCC Days Inventory Outstanding + Days Sales Outstanding + Days Payable Outstanding
Credit sales to account receivable Annual credit sales ÷ Average Accounts Receivable
Bad debts ratio Bad debts ÷ Accounts Receivable
Collection Period to Payment Period Collection period ÷ Payment period
Payment Period to Average Inventory Period Payment period ÷ average inventory period
Breakeven Point (Fixed Costs + Amortization) ÷ (Sales – Mat. – Labor)
Profitability Gross Profit Margin Gross profit ÷ total revenue
Net Profit Margin Net Income ÷ Net Sales
Operating Profit Margin EBIT ÷ Sales
Contribution Margin (sales – variable costs) ÷ Sales
Earnings Before Interest and Tax – EBIT Revenue – Operating Expenses
Earnings Before Interest, Taxes, Depreciation and Amortization – EBITDA Revenue – Expenses (without tax, interest, depreciation and amortization)
Adjusted EBIT EBIT+ Extraordinary items + Profit ÷ Loss on disposal of assets+ results consolidated – Goodwill amortization
Cash Debt Coverage (Cash flow from operations – dividends) ÷ total debt
Cash Return to Shareholders Cash flow from operations ÷ shareholders equity
Cash Return On Assets– CROA Cash flow from operating activities÷Total Assets
Return On Assets – ROA Adjusted EBIT ÷ Total assets
Return On Investment – ROI EBIT ÷ Operating Assets
Return On Sales x Assets Turnover
Return on Equity – ROE Net Profit ÷ Average Shareholders equity
Return On Sales – ROS EBIT ÷ Sales
Return On Invested Capital – ROIC Net Operating Profit After Tax – NOPAT ÷ Total capital
Yearly Value Creation – YVC Net Operating Profit After Tax – NOPAT – after tax Cost of Capital x Assets
Retained Earnings Growth Rate (net income – dividends) ÷ common shareholders equity
Budget follow-up Forecast accuracy of budget Actual costs ÷ budget
Budget cuts achievement Value of budget cuts achieved ÷ value of budget cuts planned

Recommended bibliography