Key Performance Indicators (KPIs) are probably among the most prominent tools to manage, monitor, and steer a company’s operations and strategy. And if you search Google, you’ll find hundreds of different KPIs that cover your business processes. However, if you’d ask me which KPIs to start with, my immediate answer is Financial KPIs!

Marketing Counts, Social Media Is Important — But Nothing Comes Close To Financial KPIs

Of course, marketing KPIs are relevant. And having a close eye on social media or your operational KPIs is essential too. However, nothing comes close to Financial KPIs. They simply reflect the single most crucial aspect of your company. Not having a clear overview of various financial aspects is like balancing on a razor’s edge!

And by the way, this is regardless of the business you operate, or your company’s size. Financial KPIs are essential for sustainable success and growth. Moreover, monitoring the right set of financial KPIs help to reach business and strategic goals massively. That’ss why we put together the most relevant KPIs. 

Why Are Financial KPIs So Essential?

The usage of KPIs provides a variety of benefits:

  • Fact-based and rationalized overview of performance metrics
  • Identification of problems and optimization potential
  • Possibility to benchmark with other companies and industry

Be Careful! Choose The Right Set Of Financial KPIs!

There are probably more financial KPIs available than stars in the universe — okay, that’s a bit too bold. But honestly, once you dig into the topic of finance KPIs, you quickly recognize a sheer endless amount of KPI examples. 

Therefore, it is vital to define the goals you want to achieve with your financial KPIs. Subsequently, you can select those KPIs that support you in reaching the goals. And always remember: Don’t start with a whole bunch of KPIs. Take a step-by-step approach!

12 Financial KPIs You Should Have A Close Eye On

So here’s our list of twelve super-essential KPIs you should definitely have a close eye on!

1 — Operating Cash Flow (OCF)

The operating cash flow is calculated as the total amount of money a company’s daily business operations generate.

Worth to mention that the OCF is adjusted by aspects like depreciation, inventory changes, etc. Furthermore, it is always meaningful to compare the cash flow to the total capital employed. 

2 — Current Ratio

A significant financial KPI that reflects a company’s ability to pay all obligations in one year. The KPI basically puts a company’s assets (account receivables) concerning current liabilities (account payables).

3 — Burn Rate

This financial KPI states the enterprise’s spending money rate within a defined period. Most companies calculate the KPI on an annual, monthly, and weekly basis. However, this, of course, highly depends on your business and revenue model. Especially for smaller businesses, the KPI is super relevant. First of all, because smaller companies —usually— are more likely to run out of cash. Secondly, it is a financial KPIs that is relatively easy to calculate. Accordingly, the cost/value ratio is exceptionally favorable.

Want To Know More About KPIs? 47 Key Performance Indicator Examples — KPIs You Definitely Must Track!

4 — Net Profit Margin

Probably one of the most critical financial KPIs in the whole world! The KPI reflects the percentage of profit concerning revenue. Or in a mathematical formula: Net margin = net profit/revenue.

It’s definitely a financial KPI every company should be aware of. Again —and primarily— when starting a new business, this KPI reflects an indicator you should calculate right from the beginning!

5 —Working Capital

Working capital reflects a company’s available assets to meet short-term financial obligations. Working Capital includes assets such as available cash, short-term investments, and accounts receivable, demonstrating the business’s liquidity. It’s one of the financial KPIs that helps identify financial issues at a very early stage — and before you run into financial trouble.

6 — Inventory Turnover

The Inventory Turnover KPI indicates how efficiently a company sells and replaces its inventory during a particular period of time. Therefore, it reflects an organization’s ability to generate sales and quickly re-stock. Indeed, this financial KPI is only relevant if you are selling products and rely on some stock.

7 — Sales Growth

This financial KPI displays the change in total sales generated over a defined period (day, week, month, year). The Sales Growth shows the percentage of the current sales period compared to the previous one. Personally, I consider Sales Growth as a “secondary financial KPI.” The KPI doesn’t —directly— provide information about your financial stability. However, it is an essential factor to identify upcoming financial issues from a sales perspective.

8 — Vendor expenses

This financial KPI shows the current payments an enterprise is due to its vendors. Vendor expenses —unfortunately— is an often overlooked KPI. Instead, many companies focus on income KPIs. Nonetheless, high expenses indicate that your business faces problems paying to its vendors and suppliers on time.

9 — Return on Equity

This key performance indicator reflects a business’s capacity to use shareholder’s investments efficiently, generating high profits. The Return on Equity shows how much revenue a company generates for each unit of shareholder equity. 

10 — Accounts Receivable Turnover

The accounts receivable turnover ratio measures how many times a company can collect on its outstanding accounts in an accounting period. More specifically, this financial KPI measures how effective a company is at extending credit to clients and collecting payment. 

Want To Know More About KPIs? 47 Key Performance Indicator Examples — KPIs You Definitely Must Track!

11 — Accounts Payable Turnover

Accounts payable turnover measures the rate at which a company can pay its suppliers and other obligations. The Key Performance Indicator is calculated over an accounting period and gauges how many times a company can successfully pay off its supplier obligations. This Key Performance Indicator example is usually a short-term financial measure. 

12 — Gross Profit Margin

Gross Profit Margin measures how much of each dollar in sales is left as a profit after accounting for the cost of goods sold. This KPI is a good indicator of a company’s financial viability as it highlights whether it can pay off its expenses and still collect revenues from every sale.

Which Financial KPIs Do You Measure?

Always happy to receive your feedback and thoughts. Just hit me up on Twitter or get in touch on LinkedIn.


Want To Know More About KPIs? Here’s Where To Start!


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Benjamin is an information-enthusiast, a content-maniac, and CEO of Information Design (in this order). His daily business revolves around pioneering solutions with the aim to change the way companies use information. His visions are based on expertise gained in more than 15 years in the industry, and working with renowned companies all over the globe.