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Mar 3, 2024 · Guiding you through the 25+ most important KPIs and metrics for high performance finance teams, how they are calculated, and how you can take your reporting process to the next level.
Mar 14, 2019 · 1. Bookkeeping and Payables/Receivables. Bookkeeping is the most basic financial activity in a company. Before a business owner ever considers hiring a CFO, they bring in a bookkeeper, who tracks all of the transactions in the organization, covering both sales and expenses.
- Financial Management and Planning. Financial Management and Planning is a key function of any finance department. It’s about setting financial goals, much like you’d set personal goals for the year.
- Investment and Capital Structuring. Moving on to Investment and Capital Structuring, think of this as one of the functions of the finance department with a strategy importance.
- Cash Flow Management. Cash Flow Management is the art of ensuring the business has enough cash to operate smoothly, kind of like making sure you have enough fuel in your car for a long journey.
- Financial Reporting and Analysis. Now, let’s talk about Financial Reporting and Analysis. This is one of the functions of the finance department that akin to a health check-up for the business, where the finance department prepares detailed reports showing how the company is performing financially.
- Operating Cash Flow. Monitoring and analyzing your Operating Cash Flow is an essential for understanding your ability to pay for deliveries and routine operating expenses.
- Working Capital. Cash that is immediately available is "working capital". Calculate your Working Capital by subtracting your business's existing liabilities from its existing assets.
- Current Ratio. While the Working Capital KPI discussed above subtracts liabilities from assets, the Current Ratio KPI divides total assets by liabilities to give you an understanding the solvency of your business—i.e., how well your company is positioned to meet its financial obligations consistently on time and to maintain a level of credit rating that is required to order to grow and expand your business.
- Debt to Equity Ratio. Debt to Equity is a ratio calculated by looking at your business's total liabilities in contrast to your shareholders' equity (net worth).
Jun 20, 2023 · A finance KPI (key performance indicator) is a metric that helps you to assess a financial project, financial organization, or finance departments in companies. There are many different KPIs and metrics that you can use to analyze financial performance.
- Gross Profit metric description: Gross profit is the profit a company makes after deducting the costs associated with making and selling its produc...
- Gross Profit metric is calculated with this formula: Net Sales – COGS (Cost Of Goods Sold). Unit: [$] Monetary. Lower is better?: No
- Gross Profit Margin metric description: How much profit you make on each dollar of sales before most of the expenses. The gross profit is calculate...
- Gross Profit Margin metric is calculated with this formula: (Sales Revenue-COGS)/Revenue.. Unit: [%] Percentage. Lower is better?: No
- If the number is going down, you should consider maybe removing products that doesn’t bring enough income but generates some problems and cost for...
- Net Profit metric description: It is the total profit made at the end of the month. It is calculated as total income minus total costs including ta...
- Net Profit metric is calculated with this formula: Revenue - Total Expenses (taxes included). Unit: [$] Monetary. Lower is better?: No
- It may vary depending many factors, like time of the year, new competitors on the market etc. But in case dropping dangerously it may give a strong...
- Operating Expense Ratio (OER) metric description: It’s important to understand your operational effectiveness by tracking the operating expense rat...
- Operating Expense Ratio (OER) metric is calculated with this formula: Operating Expenses / Revenue. Unit: [%] Percentage. Lower is better?: Yes
Apr 1, 2006 · Ultimately, a leaner finance function will reduce costs, increase quality, and better align corporate responsibilities, both within the finance function and between finance and other departments. These steps can create a virtuous cycle of waste reduction.
only be achieved by carefully analysing finance functions and the unique contexts within which they operate. In this report we propose a framework which helps managers carry out this analysis. The framework of finance activities and the drivers that shape their implementation (‘the framework’) is
