Do you know the top 10 investors KPIs?

As an investor, measuring the performance of your investments is crucial to understanding the success of your portfolio.

Key performance indicators (KPIs) are essential metrics used to evaluate the financial health and progress of your investment.

In this blog post, we will explore 10 essential KPIs that every investor should monitor to track their investments’ performance.

Why Are These KPIs Important?

Investors must measure their investments’ performance using KPIs to understand how their investments are performing and make informed investment decisions.

Therefore, by analyzing these KPIs, investors can gain valuable insights into their investments’ profitability, growth potential, and financial health.

Furthermore, tracking these KPIs regularly can help investors identify trends, make informed decisions about buying or selling assets, and adjust their investment strategies accordingly.

Top 10 Investors KPIs

Let’s explore the 10 essential KPIs that every investor should monitor.

#1: Return on Investment (ROI)

Description: How much money you made compared to your investment

Formula: Income from asset / Asset invested

#2: Return on Equity (ROE)

Description: Measures the return on shareholders’ equity

Formula: Net Income / Shareholders’ Equity

#3: Earnings per Share (EPS)

Description: Company’s profitability on a per-share basis

Formula: Net Income / Average number of outstanding shares

#4: Price-to-Earnings Ratio (P/E)

Description: Price of a company’s shares relative to its earnings

Formula: Market Price per Share / Earnings per Share

#5: Dividend Yield

Description: Return on investment from dividends

Formula: Annual Dividend per Share / Market Price per Share

#6: Debt-to-Equity Ratio

Description: Measures the company’s financial leverage

Formula: Total Liabilities / Shareholders’ Equity

#7: Current Ratio

Description: The company’s ability to pay its current liabilities with current assets

Formula: Current Assets / Current Liabilities

#8: Quick Ratio

Description: The company’s ability to pay its current liabilities with quick assets

Formula: (Current Assets – Inventories) / Current Liabilities

#9: Gross Margin Ratio

Description: Measures the profitability of a company’s products or services

Formula: (Revenue – Cost of Goods Sold) / Revenue

#10: Net Promoter Score (NPS)

Description: Measures customer satisfaction and loyalty

Formula: % of Promoters – % of Detractors

Conclusion – Measure Your Investment with These KPIs

By monitoring these 10 essential KPIs, investors can gain valuable insights into their investments’ performance, profitability, and financial health.

Also, these KPIs can help investors make informed investment decisions, adjust their investment strategies, and identify areas for improvement.

Moreover, it is important to note that while these KPIs provide valuable insights, they should not be the only factors considered when making investment decisions.

Investors should also conduct thorough research and analysis of market trends, industry news, and economic indicators to make informed decisions about their investments.

Want to discover more KPIs? Here you can find many other relevant KPIs in finance and FP&A

Finally, get your INSTANT access to the exact systems and methods that have helped me become an FP&A leader and a high-performing finance professional.

Your company’s performance is measured by its SaaS finance KPIs, and most entrepreneurs are aware that some metrics are more important than others.

As a result, in order for you to not have to worry about missing out on any of the most crucial ones when you are ready to finish your SaaS business plan, I have created a table of the 10 most significant SaaS KPIs.

Are you looking to get a finance position at a SaaS company? You need to learn these 10 SaaS finance KPIs.

#1: KPIs in Finance and FP&A – Customer Churn Rate

• Description: Percentage of customers lost in a given time frame
• Formula: Customers lost / Total Customers

#2: New Buyer Growth Rate

• Description: Speed at which you gain new customers over defined periods of time
• Formula: (New buyers this month – New buyers last month) / New buyers last month

#3: KPIs in Finance and FP&A – Lifetime Value

• Description: Revenue from a customer over the retention time period
• Formula: Customer Value * Average Customer Lifespan

#4: Customer Acquisition Costs

• Description: Amount of money a company spends to get a new customer
• Formula: Cost of Sales and Marketing / Number of New Customers Acquired

#5: Net Burn rate

• Description: Net Cash spent by a company in a specific time frame (usually monthly or normalized to a year)
• Formula: Cash Spent – Cash received

#6: Runway

• Description: Time that a startup has before they run out of finances
• Formula: Current Cash Balance / Burn Rate

#7: Average Revenue Per User (ARPU)

• Description: Average revenue generated per customer (either monthly or annually)
• Formula: Total revenue / Total number of customers

#8: SaaS Quick Ratio

• Description: Compares revenue added (new business) vs revenue lost (churn)
• Formula: (New MRRt + Expansion MRRt) / (Churned MRRt + Contraction MRRt)

#9: Monthly Recurring Revenue (MRR)

• Description: Monthly revenue from customers with a subscription
• Formula: Number of customers * Average billed amount

#10: KPIs in Finance and FP&A – Total Addressable Market (TAM)

• Description: Market size of a product/service in value that the company can achieve
• Formula: Annual Contract Value per client * Number of potential clients

Conclusion – Consider These SaaS Finance KPIs for A Good Job Position

Effective design and accompanying communication will always go a long way, whether you run a SaaS company or are a leader in another area, and regardless of whether your financial KPIs’ audience is internal or external.

Therefore, you must establish SaaS finance KPIs that are pertinent to the management of your company and keep track of your successes and failures, as was covered in this article. However, these KPIs have to be relevant to your audience and in line with your goals.

Want to discover more KPIs? Here you can find many other relevant KPIs in finance and FP&A.

Finally, get your INSTANT access to the exact systems and methods that have helped me become an FP&A leader and a high performing finance professional.

Inventory management is a challenging endeavor. Acquiring, collecting, storing, choosing, and shipping products entail a lot of actions, procedures, and staff, with the ultimate goal of keeping customers satisfied with full, on-time purchases. As a result, I have prepared for you  a table of the top 10 Inventory KPIs.

Also, inventory KPIs can offer profound insights into a wide range of other operational concerns.

In other words, your inventory contains a wealth of important, actionable information, from sales numbers and future demand to storage performance and opportunity costs. Furthermore, here is the table of the top 10 Inventory KPIs.

Top 10 Inventory KPIs

Here are the top 10 Inventory KPIs.

#1: Average Inventory

Description: Amount of inventory a company has on hand during a period.
Formula: Average inventory = (Beginning inventory + Ending inventory) / 2

#2: Days on Hand

Description: Days on hand (DOH) is the average days before inventory is sold.
Formula: Days of inventory on hand = (Average inventory for period / Cost of sales for a period) x 365

#3: Stock-to-Sales Ratio

Description: Stock-to-sales ratio is the measure of the inventory amount in storage versus the number of sales. This broad calculation can be used to adjust the stock to maintain high margins.
Formula: Stock to sales ratio = Inventory value / Sales value

#4: Cost of Carry

Description: Percentage of total inventory value a company pays to maintain inventory in storage.
Formula: (Inventory Service Costs + Inventory Risk Costs + Capital Cost + Storage Cost) / Total Inventory Value

#5: Backorder Rate

Description: Tracks the number of delayed orders due to stockouts.
Formula: Backorder rate = (Number of Undeliverable Orders / Total Number of Orders)

#6: Sell-through Rate

Description: Comparison of the inventory amount sold and the amount of inventory received from a manufacturer.
Formula: Number of units sold / number of units received

#7: Scrap Rate

Description: Measures the quality of the inventory and is used to decrease the non-quality costs.
Formula: Scrap expenses over the period / Average inventory over the period

#8: Time to receive

Description: Measures the efficiency of the stock-receiving process.
Formula: Time for stock validation + Time to add stock to records + Time to prep stock for storage

#9: Inventory Shrinkage

Description: Measures the shrinkage due to damage, miscounts, and fraud.
Formula: Ending inventory value – Physically counted inventory value

#10: Dead Stock

Description: Dead stock is inventory no one wants to buy. Measures efficiency of the supply chain.
Formula: Amount of unsellable stock in period / Amount of available stock in the period

The Final Verdict – The Top 10 Inventory KPIs Play Integral Role in Your Company’s Success

Although the above list of 10 KPIs may sound intimidating, keep in mind that you don’t have to adopt them all at once. Therefore, pick the ones that are most appropriate for your company.

Additionally, you may identify trends that will assist you in figuring out how to enhance your inventory management procedures and ultimately turn your company into a highly efficient organization by selecting the KPIs that are right for your company’s needs and monitoring them over time.

Finally, you can take my course and learn all the necessary KPIs and get the finance expertise to become a finance professional.

A KPI, or key performance indicator, is a measurable metric that aids businesses in determining how successfully they accomplish their strategic goals and growth objectives. In addition, the KPIs in finance and FP&A may assist a company in setting goals, assessing performance, identifying organizational strengths, and ultimately determining the success of the company as a whole.

Also, you can better position yourself to evaluate how the firm is doing financially by studying these data. Then, you may make adjustments to your department’s or team’s goals in order to support important strategic goals.

KPIs in Finance and FP&A – SaaS KPIs

Your company’s performance is measured by its SaaS KPIs, and most entrepreneurs are aware that some metrics are more important than others.

As a result, in order for you to not have to worry about missing out on any of the most crucial ones when you are ready to finish your SaaS business plan, I have created a table of the 10 most significant SaaS KPIs.

#1: KPIs in Finance and FP&A – Customer Churn Rate

• Description: Percentage of customers lost in a given time frame
• Formula: Customers lost / Total Customers

#2: New Buyer Growth Rate

• Description: Speed at which you gain new customers over defined periods of time
• Formula: (New buyers this month – New buyers last month) / New buyers last month

#3: KPIs in Finance and FP&A – Lifetime Value

• Description: Revenue from a customer over the retention time period
• Formula: Customer Value * Average Customer Lifespan

#4: Customer Acquisition Costs

• Description: Amount of money a company spends to get a new customer
• Formula: Cost of Sales and Marketing / Number of New Customers Acquired

#5: Net Burn rate

• Description: Net Cash spent by a company in a specific time frame (usually monthly or normalized to a year)
• Formula: Cash Spent – Cash received

#6: Runway

• Description: Time that a startup has before they run out of finances
• Formula: Current Cash Balance / Burn Rate

#7: Average Revenue Per User (ARPU)

• Description: Average revenue generated per customer (either monthly or annually)
• Formula: Total revenue / Total number of customers

#8: SaaS Quick Ratio

• Description: Compares revenue added (new business) vs revenue lost (churn)
• Formula: (New MRRt + Expansion MRRt) / (Churned MRRt + Contraction MRRt)

#9: Monthly Recurring Revenue (MRR)

• Description: Monthly revenue from customers with a subscription
• Formula: Number of customers * Average billed amount

#10: KPIs in Finance and FP&A – Total Addressable Market (TAM)

• Description: Market size of a product/service in value that the company can achieve
• Formula: Annual Contract Value per client * Number of potential clients

KPIs in Finance and FP&A – Manufacturing KPIs

The Manufacturing KPI is a clearly defined measure used to track, evaluate, and improve production processes in terms of quantity, quality, and other cost factors.

In other words, they provide manufacturers with priceless business insights that help them achieve their objectives. Ultimately, here is the table of the top 10 Manufacturing KPIs.

#1: KPIs in Finance and FP&A – Production Activity (or Volume)

• Description: Calculates the value of the production output in monetary value
• Formula: Sum of the monetary value of all finished goods produced within a defined period

#2: Cycle Time

• Description: Average amount of time to make one product, including process, inspection, move, and queue time
• Formula: Process time + Inspection time + Move time + Queue time

#3: Takt Time

• Description: Rate at which you need to complete a product to meet customer demand
• Formula: Production available time / Customer demand

#4: Inventory Turnover

• Description: Amount of time that passes from the day an item is purchased by a company until it is sold
• Formula: Cost of Goods Sold / Average Inventory (over a period of time)

#5: Return on Assets (ROA)

• Description: Measures how effectively a company is using its resources (machine and inventory) to make a profit
• Formula: Net Income / Average Total Assets

#6: First Pass Yield

• Description: Measure of quality and performance and is at the heart of production efficiency and profitability
• Formula: Number of good products finished / Number of production orders started

#7: Yield Factor

• Description: Calculates the number of items to start to have a good finished product
• Formula: Number of production orders started / Number of good products finished

#8: Overall Equipment Effectiveness (OEE)

• Description: Compares the performance of a machine to its relative capacity
• Formula: Good Count × Ideal Cycle Time / Planned Production Time

#9: On-Time Delivery

• Description: Measures if an organization is meeting its goals in regard to promised delivery times
• Formula: On-time units / Total units

#10: KPIs in Finance and FP&A – Avoided Costs

• Description: How much money you saved by using preventive maintenance
• Formula: Assumed Repair Cost + Production Losses – Preventative Maintenance Cost

KPIs in Finance and FP&A – Cash KPIs

The greatest cash flow indicators and Cash KPIs provide information about the financial health and potential of your organization. Additionally, some of these measures may be calculated by investors using data from financial statements.

As a result, investors can better comprehend a company’s finances thanks to many of these data. To clarify, here is the table of the top 10 Cash KPIs.

#1: KPIs in Finance and FP&A – Cash Burn Rate

• Description: Net Cash spent by a company in a specific time frame (usually monthly or normalized to a year)
• Formula: Cash Spent (monthly average) – Cash Received (monthly average)

#2: Average Days Delinquent (ADD)

• Description: Measures effectiveness of collection efforts. Often used at the client level to compare with the others
• Formula: Days Sales Outstanding (DSO) – Best Possible Days Sales Outstanding (BPDSO)

#3: Operating Cash Flow (OCF)

• Description: Money generated by daily operations
• Formula: Net Income + Non-Cash Expenses – Increase in Working Capital

#4: Free Cash Flow (FCF)

• Description: Expands on the OCF concept by also excluding interest payments and including asset purchases
• Formula: OCF + Interest Payments – Asset Purchase

#5: Overdues Ratio

• Description: Measures your effectiveness of collecting cash and the quality of your receivables
• Formula: Overdues / Total Receivables

#6: Days of Inventory Outstanding (DIO)

• Description: Average number of days that a company holds inventory before turning it into sales
• Formula: Average Inventory / Yearly Cost Of Goods Sold (COGS) x 365 days

#7: Days Sales Outstanding (DSO)

• Description: Average number of days that it takes a company to collect payment for a sale
• Formula: Average Account Receivables / Annual Sales x 365 days

#8: Days Payables Outstanding (DPO)

• Description: Average number of days that it takes a company to pay its suppliers
• Formula: Average Account Payables / Yearly Cost Of Goods Sold (COGS) x 365 days

#9: Cash Conversion Cycle (CCC)

• Description: Days to convert inventory into cash flows from sales
• Formula: DIO+DSO−DPO

#10: KPIs in Finance and FP&A – Cash Reserves in Days

• Description: Measures of how long your organization could survive if cash dried up tomorrow.
• Formula: Cash Reserves / Average Daily Expenses

KPIs in Finance and FP&A – Inventory KPIs

Inventory KPIs can offer profound insights into a wide range of other operational concerns.

In other words, your inventory contains a wealth of important, actionable information, from sales numbers and future demand to storage performance and opportunity costs. Furthermore, here is the table of the top 10 Inventory KPIs.

#1: KPIs in Finance and FP&A – Average Inventory

• Description: Amount of inventory a company has on hand during a period.
• Formula: Average inventory = (Beginning inventory + Ending inventory) / 2

#2: Days on Hand

• Description: Days on hand (DOH) is the average days before inventory is sold.
• Formula: Days of inventory on hand = (Average inventory for period / Cost of sales for a period) x 365

#3: Stock-to-Sales Ratio

• Description: Stock-to-sales ratio is the measure of the inventory amount in storage versus the number of sales. This broad calculation can be used to adjust the stock to maintain high margins.
• Formula: Stock to sales ratio = Inventory value / Sales value

#4: Cost of Carry

• Description: Percentage of total inventory value a company pays to maintain inventory in storage.
• Formula: (Inventory Service Costs + Inventory Risk Costs + Capital Cost + Storage Cost) / Total Inventory Value

#5: Backorder Rate

• Description: Tracks the number of delayed orders due to stockouts.
• Formula: Backorder rate = (Number of Undeliverable Orders / Total Number of Orders)

#6: Sell-through Rate

• Description: Comparison of the inventory amount sold and the amount of inventory received from a manufacturer.
• Formula: Number of units sold / Number of units received

#7: Scrap Rate

• Description: Measures the quality of the inventory and is used to decrease the non-quality costs.
• Formula: Scrap expenses over the period / Average inventory over the period

#8: Time to receive

• Description: Measures the efficiency of the stock-receiving process.
• Formula: Time for stock validation + Time to add stock to records + Time to prep stock for storage

#9: Inventory shrinkage

• Description: Measures the shrinkage due to damage, miscounts, and fraud.
• Formula: Ending inventory value – Physically counted inventory value

#10: KPIs in Finance and FP&A – Dead Stock

• Description: Dead stock is inventory no one wants to buy. Measures efficiency of the supply chain.
• Formula: Amount of unsellable stock in period / Amount of available stock in the period

KPIs in Finance and FP&A – Headcount KPIs

The Headcount KPIs provide readers with information on the whole workforce of the firm or department of focus.

Therefore, for the great majority of HR reports, internal management choices, and finances, headcount is a necessary measurement. In addition, here is the table of the top 10 Headcount KPIs.

#1: KPIs in Finance and FP&A – Headcount

• Description: Number of active people working for a company at a certain time
• Formula: Number of active employees full-time & part-time + leasing employees

#2: Full-Time Equivalent (FTE)

• Description: 1 FTE equivalent of a standard working hours contract. Example: a part-time at 50% = 0,5 FTE
• Formula: Number of hours in the employee contract / Standard working hours

#3: Turnover Rate (also Called Attrition or Churn)

• Description: Calculates the % of people leaving the company compared to the total number of employees
• Formula: Number of departures over a period / Average total headcount

#4: Natural Attrition

• Description: Number of employees planned to leave the company based on the actual contractual situation
• Formula: Planned retirement + Planned end of limited contract

#5: Capacity

• Description: Calculates the number of hours available from the direct workforce
• Formula: Number of FTEs over a period x working hours available for one FTE

#6: Capacity Increase Flexibility

• Description: Calculates how much capacity can be increased without having to recruit new employees
• Formula: Flexible time account not used + Overtime + Temporary change of hours available in part-time contracts

#7: Capacity Decrease Flexibility

• Description: Calculates how much capacity can be decreased without having to discontinue employment contracts
• Formula: Flexible time account + Temporary change of hours available in part-time contracts + Temporary worker’s time

#8: Noria Effect

• Description: Effect of changes in compensation due to hiring and departures
• Formula: (New hires salary costs – Leavers salary costs) / Previous salary costs

#9: Absenteeism

• Description: Calculates the % of the time not worked due to illness
• Formula: Illness days / Total working days

#10: KPIs in Finance and FP&A – Time to Fill

• Description: Measures how long it takes to fill in an open position
• Formula: Average number of days between job opening and contract signed by the candidate

The Bottom Line – Understanding and Using The KPIs in Finance and FP&A Are Key to Your Success!

In conclusion, you may track and analyze a wide range of other KPIs in finance and FP&A to see how your business is doing and how your activities affect the development of common objectives.

However, the financial KPIs described above are an excellent place to start. Therefore, all finance professionals must gain a strong understanding of how these measures affect business strategy and the company as a whole.

Finally, you can take my course for finance professionals to learn all you need to become an expert in finance with valuable knowledge.

Key Takeaways

• KPIs in Finance and FP&A: Key Performance Indicators (KPIs) in finance and FP&A are measurable metrics used to evaluate a company’s success in achieving strategic goals and growth objectives.
• SaaS KPIs: Essential SaaS KPIs include Customer Churn Rate, New Buyer Growth Rate, Lifetime Value, Customer Acquisition Costs, Net Burn Rate, Runway, ARPU, SaaS Quick Ratio, MRR, and Total Addressable Market.
• Manufacturing KPIs: Critical Manufacturing KPIs encompass Production Activity, Cycle Time, Takt Time, Inventory Turnover, ROA, First Pass Yield, Yield Factor, OEE, On-Time Delivery, and Avoided Costs.
• Cash KPIs: Cash KPIs cover Cash Burn Rate, Average Days Delinquent, OCF, FCF, Overdues Ratio, DIO, DSO, DPO, CCC, and Cash Reserves in Days.
• Inventory KPIs: Inventory KPIs include Average Inventory, Days on Hand, Stock-to-Sales Ratio, Cost of Carry, Backorder Rate, Sell-through Rate, Scrap Rate, Time to receive, Inventory shrinkage, and Dead Stock.
• Headcount KPIs: Headcount KPIs comprise Headcount, Full-Time Equivalent (FTE), Turnover Rate, Natural Attrition, Capacity, Capacity Increase Flexibility, Capacity Decrease Flexibility, Noria Effect, Absenteeism, and Time to Fill.

FAQ

1. What are the KPIs in finance and FP&A?

• KPIs are measurable metrics used to assess how effectively a company achieves its strategic goals and growth objectives, aiding in performance evaluation and goal-setting.

2. How do CEOs and CFOs differ in their roles?

• CEOs focus on strategy and innovation, while CFOs manage financial stability and reporting.

3. What are some essential SaaS KPIs?

• Important SaaS KPIs include Customer Churn Rate, New Buyer Growth Rate, Lifetime Value, Customer Acquisition Costs, Net Burn Rate, Runway, ARPU, SaaS Quick Ratio, MRR, and Total Addressable Market.

4. What Manufacturing KPIs are crucial?

• Vital Manufacturing KPIs encompass Production Activity, Cycle Time, Takt Time, Inventory Turnover, ROA, First Pass Yield, Yield Factor, OEE, On-Time Delivery, and Avoided Costs.

5. What Cash KPIs should be considered?

• Essential Cash KPIs cover Cash Burn Rate, Average Days Delinquent, OCF, FCF, Overdues Ratio, DIO, DSO, DPO, CCC, and Cash Reserves in Days.

6. What Inventory KPIs offer insights?

• Inventory KPIs include Average Inventory, Days on Hand, Stock-to-Sales Ratio, Cost of Carry, Backorder Rate, Sell-through Rate, Scrap Rate, Time to receive, Inventory shrinkage, and Dead Stock.

7. What are Headcount KPIs used for?

• Headcount KPIs provide insights into workforce management, turnover rates, capacity, and other HR and financial considerations.

A financial KPI (Key Performance Indicator) measures a company’s performance in terms of producing revenue and profits. KPI tracking reveals if a company is succeeding in attaining its long-term objectives. Therefore, here are the top six KPIs for Headcount Analysis.

#1: Headcount Analysis Evolution and Variance

Salary and Full-time Equivalent (FTE) reports, which are categorized as employee or HR reports and are frequently utilized by HR and other managers to acquire a thorough picture of headcount and compensation status in comparison to plan. As a result, this sort of report’s primary features includes displaying actual and budgeted FTE numbers by division and department for every month of the year.

#2: Full-Time Equivalent

Evolution and variance Full-Time Equivalent is based on the contractual hours of an employee. Therefore, Full-Time Equivalent (FTE) is calculated by dividing the employee’s planned hours by the company’s hours for a full-time workweek. Workers who are scheduled to work a 40-hour workweek are considered 1.0 FTEs by the company. A 0.5 FTE employee is one who is scheduled to work 20 hours per week.

#3: Percentage of Direct Vs. Total Employees

Direct or indirect work is the two types of labor that employees can provide. A direct employee works directly on a project or production order, whereas an indirect employee has more of a supervisory or support function role.

#4: Flexibility

A number of temporary workers, number of hours in time account. In other words, this will help you know how much you can reduce or increase your activity to adapt to the business demand.

#5: Actual Capacity in Hours Vs. Budget

Compare the gross capacity (hours before holidays, sickness, leaves) as well as the net capacity. Also, identify the root cause of differences in your capacity. Furthermore, it can help you explain why fewer or more hours are worked.

#6: Turnover rate in Headcount Analysis

The number of employees leaving the company compared to the total number of employees. You can see if there is some anomaly in some departments or some regions. The dynamics of individuals leaving or remaining in an organization are evaluated using turnover analysis to:

• How many workers leave
• The causes of why people exit or stay
• The expense of turnover caused by a loss in company continuity
• How to reduce the danger of present employees leaving the company through turnover

The Bottom Line – KPIs for Headcount Analysis

Beyond the common financial metrics and KPIs listed above, businesses can track specialized KPIs that focus on their inner workings or functions, such as those related to analyzing inventory, sales, receivables, payables, and human resources.

Do you perform other analyses, and which one has the most value?

To learn more financial metrics and gain more knowledge in Finance, you can take my course.

Learn about the Top Ten Manufacturing (KPIs) Key Performance Indicators that every finance professional must know. In other words, these metrics are crucial for understanding your bottom line and projecting for the future.

Top 10 Manufacturing KPIs

Here are the top ten manufacturing KPIs you need to learn in finance.

#1: Manufacturing KPIs – Production Activity (or Volume)

Description: Calculates the value of the production output in monetary value.
Formula: Sum of the monetary value of all finished goods produced within a defined period.

#2: Cycle Time

Description: Average amount of time to make one product, including process, inspection, move, and queue time.
Formula: Process time + Inspection time + Move time + Queue time

#3: Manufacturing KPIs – Takt time

Description: Rate at which you need to complete a product to meet customer demand.
Formula: Production available time / Customer demand

#4: Inventory Turnover

Description: Amount of time that passes from the day an item is purchased by a company until it is sold.
Formula: Cost of Goods Sold / Average Inventory (over a period of time)

#5: Manufacturing KPIs – Return on Assets (ROA)

Description: Measures how effectively a company is using its resources (machine and inventory) to make a profit.
Formula: Net Income / Average Total Assets

#6: First Pass Yield

Description: Measure of quality and performance and is at the heart of production efficiency and profitability.
Formula: Number of good products finished / Number of production orders started

#7: Manufacturing KPIs – Yield Factor

Description: Calculates the number of items to start to have a good finished product.
Formula: Number of production orders started / Number of good products finished

#8: Overall Equipment Effectiveness (OEE)

Description: Compares the performance of a machine to its relative capacity
Formula: Good Count × Ideal Cycle Time / Planned Production Time

#9: Manufacturing KPIs – On-Time Delivery

Description: Measures if an organization is meeting its goals in regard to promised delivery times
Formula: On-time units / Total units

#10: Avoided Costs

Description: How much money have you saved by using preventive maintenance?
Formula: Assumed Repair Cost + Production Losses – Preventative Maintenance Cost

The Bottom Line – The Manufacturing KPIs are The Key to Successful Manufacturing Operation

To sum up, in order to ensure the success of a Manufacturing Operation, it is important to monitor a variety of KPIs. By doing so, businesses can identify areas where improvements can be made in order to boost efficiency and productivity.

Ultimately, take my online course and gain valuable knowledge on how you can become a successful financial professional! Also, unlock the key to reaching your career goals!

The greatest cash flow indicators and KPIs provide information about the financial health and potential of your organization. Additionally, some of these measures may be calculated by investors using data from financial statements.

As a result, investors can better comprehend a company’s finances thanks to many of these data.

KPIs provide essential decision-making information for business leaders and stakeholders. For instance, they may help determine whether to develop new product lines or whether to make adjustments to internal procedures like accounts receivable.

10 Best CASH KPIs

Here are the top 10 cash KPIs you need to learn.

1. Cash Burn Rate

Description: Net Cash spent by a company in a specific time frame (usually monthly or normalized to a year).

Formula: Cash Spent (monthly average) – Cash Received (monthly average)

2. Cash KPI Average Days Delinquent (ADD)

Description: Measures effectiveness of collection efforts. Often used at the client level to compare with the others.

Formula: Days Sales Outstanding (DSO) – Best Possible Days Sales Outstanding (BPDSO)

3. Operating Cash Flow (OCF)

Description: Money generated by daily operations.

Formula: Net Income + Non-Cash Expenses – Increase in Working Capital

4. Free Cash Flow (FCF)

Description: Expands on the OCF concept by also excluding interest payments and including asset purchases.

Formula: OCF – Interest Payments + Asset Purchase

5. Cash KPIs Overdue Ratio

Description: Measures your effectiveness of collecting cash and the quality of your receivables.

Formula: Overdues / Total Receivables

6. Days of Inventory Outstanding (DIO)

Description: Average number of days that a company holds inventory before turning it into sales.

Formula: Average Inventory / Yearly Cost Of Goods Sold (COGS) x 365 days

7. Days Sales Outstanding (DSO)

Description: Average number of days that it takes a company to collect payment for a sale.

Formula: Average Account Receivables / Annual Sales x 365 days

8. Cash KPIs Days Payables Outstanding (DPO)

Description: Average number of days that it takes a company to pay its suppliers.

Formula: Average Account Payables / Yearly Cost Of Goods Sold (COGS) x 365 days

9. Cash Conversion Cycle (CCC)

Description: Days to convert inventory into cash flows from sales

Formula: DIO+DSO−DPO

10. Cash Reserves in Days

Description: Measures of how long your organization could survive if cash dried up tomorrow.

Formula: Cash Reserves / Average Daily Expenses

The table below shows the summarized list of CASH KPIs you need to learn.

The Bottom Line – Cash KPIs Are A Crucial Indicator

The KPIs you select to monitor will depend on your sector, business, and even the responsibilities you play within your organization. Executives, for instance, could be more engaged in medium- and long-term objectives than line managers, who can be more concerned with immediate success indicators.

However, there are certain fundamental principles to follow while choosing your goals.

Therefore, try to be explicit in your goals, realistic in your expectations, and mindful of the fact that not all KPIs will apply to every employee in the company.

Furthermore, a key business strategy that has a significant impact on growth and financial health is setting proper company objectives that teams can strive toward.

Also, which other KPIs do you think should be considered?

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