S.

NO 1 2 3 4 5 6 7

Forecast & Valuation:

Accurate forecasts of planned expenditure
Measures the percentage of planned expenditures that were accurately forecast out of the total planned expenditures forecasts.

Average turnaround time for audits

Measures the average time needed for the finance department to complete an audit for the corporate, commercial rent or hotel taxis during the reporting period.

Savings
Measures the excess of income that is not spent on consumption.

Benefit cost ratio (BCR)

Measures the total present value of the benefits likely to be obtained during the service life of the project in relation to the total present value of the estimated costs.

Operating cycle
Measures the time elapsed between acquiring inventory and receiving the cash from its sale.

Breakeven yield
Measures the amount required to cover the costs of launching a new product or service, until it starts to generate profit.

Cost of equity (COE)

Measures the cost of the company obtaining equity, including the risk attached to its operations.

Profitability:
8 9 10 11 Earnings (revenue)
Measures the value of the revenue achieved by an entity from all its operations.

EBITDA to fixed charges

Measures the company's ability to pay off its existing debts or to incur additional debt, considering its operating income (EBITDA).

Internal rate of return

Measures the discount rate that makes the net present value of the sum of cash flows expected to be generated from an investment project be equal to zero.

Like-for-like revenue growth

Measures the increase in revenue generated by continuing activities (i.e. activities that are comparable to the ones in the previous period), thus excluding any effects of company expansion, acquisition and other similar events.

12 13 14 15 16 17

Sales to cash
Measures how many times the cash on hand has been turned to achieve a maximum level of sales.

Sales to cash flow ratio

Measures the company's sales in relation to its cash flow, on a per share basis.

Return on fixed assets

Measures how effective the company is in generating profits from its fixed assets (land, plants, equipment etc.).

Operating leverage
Measures how the operating income changes as a result of changes in sales.

Return on investment (ROI)

Measures how much profit was generated out of the total cost of an investment. It is one of the most used KPIs due to its simplicity and versatility.

Income growth
Measures the increase of the income from one period to another.

18 19

Return on capital employed (ROCE)

Measures how well the company is utilizing its own or borrowed capital to generate revenue. It is the main indicator of operating performance.

Cash return on capital invested (CROCI)

Measures the profits earned in cash, as a proportion of the funding required to generate them.

Liquidity:
20 21 Cash flow adequacy ratio
Measures the cash available to meet future debt obligations after payment of interest, taxes and any long-term expenditures.

Cash flow coverage

Measures how many times the financial obligations (such as interest and principal payments) are covered by the earnings before interest, taxes and depreciation (EBITD).

22

Days of liquidity
Measures the duration (in days) that highly liquid assets can support without any more cash coming from sales or receivables' collection.

Financial Stability:
23 24 25 26 27 Time to resolve credit balances
Measures the number of business days to resolve or refund a credit so that the account has a zero balance.

Bad debt write-offs as a percent of gross revenue

Measures the percentage of bad debt write-offs out of the total gross revenue.

Payroll tax payed by the employer

Measures the amount of money spent on tax by the employer's own fund for each employee, that can be either a fixed or proportionally linked to an employee's pay.

Firm exposure
Measures the amount an underwriter will need to cover in the event that a sufficient number of investors do not commit to the deal or transaction.

Common shares
Measures the number of issued shares purchased by investors that provide them dividends and voting rights. Common shareholders have claiming rights on the company's assets only after preferred shareholders, bondholders and other debt holders have been satisfied.

28 29 30 31

Texas ratio
Measures the amount of risk a bank posses due to its delinquent or 'non-performing' loans.

Defensive interval ratio (DIR)

Measures the period a company can operate on its current liquid assets without having to access non-current (long-term) assets.

Current liabilities to sales

Measures the ratio of current liabilities (money owned by the company, due within one year) to sales revenue.

EBITDA coverage
Measures the extent at which EBITDA (the earnings before interest, taxes, depreciation and amortization) cover the company's financial obligations (such as interest and principal payments).

32

Fixed assets to short term debt

Measures the portion of fixed assets (such as plant, property and equipment) that is financed through short-term debt (i.e. debt that is due in less than a year).

33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

Gearing ratio
It is a measure of financial leverage, indicating the extent at which the company's finances come from shareholder's funds versus creditors' funds.

Loan life coverage ratio

Measures the ratio of cash flow available over the term of debt relative to the amount of the debt outstanding.

Long-term debt to capitalization ratio

Measures the financial leverage of a company, by dividing the long-term debt by the capital available.

Net debt
Measures the company's net debt (total liabilities, less cash and cash equivalents), as a percentage of the shareholders' funds.

Short to long term debt

Measures financial leverage, comparing the company's short term debt (debt due in less than one year) to its long term debt.

Times interest earned

Measures the company's ability to meet the interest expenses on its debt.

Capital employed
Measures the total value of the shareholders' capital and debt the company has and uses.

Cash flow to long term debt

Measures the company's ability to cover its long term debt (debt due in more than a year) with its available funds from operations.

Debt-adjusted cash flow (DACF)

Measures the after-tax operating cash flow, excluding financial expenses after taxes. It is used mainly in companies operating in the oil industry.

Capital acquisition ratio

Measures the ability of a company to finance capital expenditures from internal sources.

Total liabilities to net worth

Measures the extent to which the net value of a company can offset its liabilities.

Current liabilities to net worth

Measures the amount of creditor funds that are used to finance the business as a percentage of its net value

Operating assets ratio

Measures the proportion of assets that enable revenue creation out of the total assets.

Interest expense
Measures the amount a company pays for a loan.

Long-term debt to total debt

Measures the amount of long-term debts of a company as a percentage of the total debt.

Short-term debt to total debt

Measures the amount of short-term debts of a company as a percentage of the total debt.

Solvency ratio
Measures the ability of a company to meet its long term debts.

Cash maturity coverage

Measures the company's the ability to repay long term maturities as they mature.

Expense coverage days

Measures the number of days a company can cover its costs with existing cash and cash equivalents.

52 53

Debt-to-capital ratio
Measures how much of a company's funding comes from debt (total liabilities).

Cash flow per share

Measures the financial strength of a company and the sustainability of its business model, by dividing the companys operating cash flow minus dividends from preferred stock, to the number of common outstanding shares.

54 55

Debt-to-equity ratio
Measures a company's financial leverage by dividing its debt (borrowed capital) to stockholders' equity.

Weighted average cost of capital (WACC)

Measures the rate of return required by the providers of a companys capital, weighted according to the proportion each element bears to the total value of capital. Calculation includes all capital sources: common equity, preferred equity, straight debt, convertible debt, exchangeable debt, warrants, options, pension liabilities, executive stock options, governmental subsidies and so on.

56 57

Interest cover
Measures whether the company's profits can cover the interest cost on debt.

Working capital turnover

Measures how well a company uses its working capital to generate revenue during one accounting period.

KPI's

KPI OF FINANCE DEPARTMENT

KPI Reference
The following format is used to describe each KPI.

Indicator
Definition Interpretation
INDICATOR : name of the indicator DEFINITION: definition of the indicator FORMULA: formula that describes the way the indicator is calculated UNIT: the unit of measure that the indicator is expressed in TYPE: description of the type of indicator. We distinguish the following types: -Standard measure: indicator that is available out-of-the-box. INTERPRETATION: what assumptions can a company draw from this indicator

Investment

Capital Investment / Net Revenue

Capital investment as a percentage of the net revenue

This is an indication of how much the company continues to invest in its Marketing / Net Revenue Marketing expenditure as a percentage of net revenue

This is an indication of the companys investment in marketing activity

R&D / Net Revenue Total R&D expenditure as a percentage of net revenue This is an indication of the companys investment in the future, of its capacity to b Training / Net Revenue Total training expenditure as a percentage of net revenue This is an indication of the companys investment in its employees.

Productivity
Net Revenue / Overhead

This is a ratio of sales divided by the indirect costs This is an indicator for profitability. Net Revenue per Employee This is a ratio of sales divided by the number of employees This is an indicator for profitability and productivity. Value Added per Employee This is a ratio of the value added by the number of employees This is an indicator for profitability and productivity. Profit per Employee This is the after-tax profit divided by the number of employees This is an indicator for profitability.

Financial Management
Current Ratio
The ratio between current assets and current liabilities

This ratio measures the companys liquidity and its ability to pay all short term liab

Quick Ratio
The ratio between current assets (excluding inventory) and current liabilities

This ratio measures the companys liquidity and their ability to pay all short term liabilities company is able to pay its debts without a forced sale of the assets that are needed to supp

Short / Long Dept

The ratio between short term debt and long term debt This ratio shows how an organization has structured their debt. Generally it is preferable t rather than short term debt.

Inventory Turnover
The number of times inventory is turned over during a period This is an indicator for profitability.

Solvability

Ratio between net assets and total assets This ratio measures the companys ability to pay all long term liabilitie

Debtor Days
Average collection period that customers take to pay their bills It is an indicator for profitability and customer relationships.

Creditor Days
Average payment period that the company takes to pay its bills It is an indicator for profitability and supplier relationships.

Profitability
Return on Investment (R.O.I.)
Profit after taxes and paid interest expressed as a percentage of the total assets Indicator for profitability and growth

Return on Total Assets (R.O.T.A.)

Profit after taxes expressed as a percentage of the total assets Indicator for profitability and growth

Return on Net Assets (R.O.N.A.)

Profit after taxes expressed as a percentage of the net assets

Indicator for profitability and growth regardless of method of financing

Return on Working Capital

Profit after taxes expressed as a percentage of working capital This indicator measures a companys ability to generate sales from available working capita more effective use of working capital.

Profit Margin
Profit after taxes expressed as a percentage of net revenue

Indicator for profitability and growth and provides a useful comparison for how well the cost

Value Added
The difference between the cost of raw materials and the sales price

Amount of value that the business has added to the raw material

NANCE DEPARTMENT

Reference

Indicator
Unit

Formula nterpretation

Type

om this indicator

estment / Net Revenue Capital Investment / Net % Revenue ch the company continues to invest in itself.

ng / Net Revenue Marketing Costs / Net % Revenue mpanys investment in marketing activity.

/ Net Revenue R&D Costs / Net Revenue % estment in the future, of its capacity to be innovative.

ng / Net Revenue Trainings Costs / Net Revenue

companys investment in its employees.

venue / Overhead

Net Revenue / (COGS Material Cost) ndicator for profitability.

enue per Employee Net Revenue / Employee Count or profitability and productivity.

dded per Employee Value Added / Employee Count or profitability and productivity.

t per Employee Net Operating Profit After Taxes / Employee Count ndicator for profitability.

urrent Ratio

Current Assets / Current Ratio Liabilities y and its ability to pay all short term liabilities instantly

Quick Ratio
(Current Assets -Inventory) / Ratio Current Liabilities

eir ability to pay all short term liabilities instantly. It shows if a ale of the assets that are needed to support the primary process

t / Long Dept

Short Term Debt / Long Term Ratio Debt ed their debt. Generally it is preferable to have long term debt an short term debt. Ratio

ntory Turnover

COGS / Inventory ndicator for profitability.

Solvability

Net Assets / Total Assets Ratio anys ability to pay all long term liabilities.

ebtor Days
#

(Accounts Receivable / Net Revenue) * 365 fitability and customer relationships.

editor Days
#

(Accounts Payable / Net Revenue) * 365 fitability and supplier relationships.

Investment (R.O.I.)
(Net Operating Profit After Taxes + Paid Interest)/ Total Assets profitability and growth %

otal Assets (R.O.T.A.)

Net Operating Profit After Taxes / Total Assets profitability and growth %

Net Assets (R.O.N.A.)

Net Operating Profit After % Taxes / Net Assets growth regardless of method of financing

n Working Capital

Net Operating Profit After % Taxes / Working Capital erate sales from available working capital. A high figure signifies e use of working capital.

ofit Margin

Net Operating Profit After % Taxes / Net Revenue a useful comparison for how well the costs have been controlled

alue Added
Net Revenue Material Cost $

business has added to the raw material