Key Performance Indicators

A collection of terms, metrics, and calculations for your business.

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Profitability Ratio

Earnings Before Interest & Tax / Revenue x 100

Measure of the proportion of revenue that is left over once all the expenses have been deducted.

Breakeven Sales

Fixed Costs / Contribution Margin

The dollar amount of revenue at which you will have a profit of 0.

Asset Turnover

Net Sales/ Average Total Assets

Measures how effectively you have used your assets to generate revenue.

Net Profit Margin

Net Profit/Sales x 100

Measures how much of each dollar your business makes translates into profit.

Expense-to-Revenue Ratio

(Cost of Sales + Expenses) / Revenue x 100

Measures how effectively your company is operating.

Breakeven Quantity

Total Fixed Cost / (Price Per Unit – Variable Cost Per Unit)

The number of units you have to sell, so you can cover all your costs.

Revenue Run Rate

Revenue (Period A) x # Periods In A Year

Estimates how much money you might make over a specific period.

Accounts Receivable Turnover

(Total Accounts Receivable Outstanding/Total Sales) x Number of days

Measures how effectively your company is collecting the money owed by your customers.

Cash Flow Margin

Operating Cash Flow / Revenue x 100

The company’s ability to convert sales into cash.

Breakeven Margin of Safety

Actual Sales - Breakeven Sales

The total number of sales dollars you can lose before your company starts making a loss.

Free Cash Flow

Cash From Operations - Capital Expenditures

The money your business has left after paying for everything you need to continue operating.

Revenue Per Employee

Total Revenue / Number Of Employees

Measures how much money your employee make for your company.