60+ Finance KPI Examples

The financial health of a company is like its pulse. It's an indicator of its overall well-being, future sustainability, and growth potential. As businesses evolve, the metrics they use to gauge their financial position must too. That's where Key Performance Indicators (KPIs) come into play, providing actionable insights into the intricacies of a company's financial performance.

Finance illustration

Understanding KPIs

Key Performance Indicators are quantifiable metrics that businesses use to evaluate how effectively they're achieving their key business objectives. In a world fueled by data, KPIs are the compass that guides decision-making, setting the strategic direction, and illuminating the path to success. While metrics provide raw data points, KPIs are those metrics that align with business goals, making them indispensable in the quest for success.

The Importance of Finance KPIs

Diving deeper into the realm of KPIs, financial KPIs hold a pivotal spot. They provide a panoramic view of a company's financial health. Whether it's liquidity, profitability, operational efficiency, or debt management, financial KPIs capture it all. Moreover, in an unpredictable business environment, they serve as an early warning system, flagging potential issues before they escalate into insurmountable problems.

Understanding financial KPIs isn't just for the CFO or the finance team. In a modern enterprise, everyone from marketing to operations should have a grasp of these metrics. It ensures alignment, promotes cross-functional collaboration, and encourages a more holistic approach to problem-solving.

Choosing the Right KPIs for Your Finance Goals

Every business is unique, shaped by its goals, challenges, industry norms, and market dynamics. Therefore, there isn't a one-size-fits-all set of financial KPIs. However, several factors can guide you in selecting the most pertinent ones:

On KPI Examples, the community plays an active role in identifying the most relevant KPIs. Users highlight the KPIs they find most valuable by upvoting them, creating a constantly evolving list that's shaped by real-world applicability and significance.

Most Popular Finance KPIs for 2023

Discover the finance KPIs that users have upvoted the most. Dive into each one to learn how they're calculated.

Net Revenue Growth Rate %

Measures the percentage increase in net revenue from one period to the next. This KPI is crucial for understanding the company's financial health and operational efficiency. High revenue growth can indicate a successful product or service and suggest that a company is outperforming its competitors.

Formula

[(Current Period Revenue - Previous Period Revenue) / Previous Period Revenue] * 100

Example

If a company's revenue was $1,000,000 last year and $1,200,000 this year, the revenue growth rate is 20%. This means that the company's revenue has grown by 20% over the past year.

Deferred Revenue 💰

Revenue received by a company for goods or services that haven't been provided yet. It indicates future obligations and gives insights into the company's cash flow and future revenue recognition.

Formula

Payments received in advance - recognized revenue

Example

If a software company collects a yearly subscription fee of $1200 upfront but has delivered only one month of service, the deferred revenue is $1100

Gross Profit Margin %

A financial metric that shows a company's financial health by revealing the proportion of money left over from revenues after accounting for the cost of goods sold (COGS). A high gross profit margin indicates that a company can make a reasonable profit on sales, as long as it keeps overhead costs in control.

Formula

(Gross Profit / Total Revenue) * 100

Example

If a company's gross profit is $400,000 and its revenue is $1,000,000, the gross profit margin is 40%. This means the company retains 40% of its total revenue after accounting for the direct costs associated with producing the goods it sells.

Earnings Before Interest and Taxes (EBIT) 💰

A company's net income before interest and income tax expenses are considered. EBIT provides a clear picture of a company's operational profitability, excluding the impact of finance and tax strategies.

Formula

Net Income + Interest + Taxes

Example

If a company's net income is $500,000, with interest expenses of $50,000 and tax expenses of $100,000, the EBIT is $650,000.

Recurring Revenue 💰

Recurring Revenue is a measure of the predictable and recurring revenue components of your subscription business. It's an important KPI for subscription-based companies like software-as-a-service (SaaS) providers as it provides a clear picture of revenue patterns and growth. Typically measured as Monthly Recurring Revenue (MRR) or Annual Recurring Revenue (ARR). Allows businesses to track and predict future revenue, which is essential for budgeting, forecasting, and business planning.

Formula

Sum of all periodic payments from subscribers or contracts

Example

If a SaaS company has 500 customers paying $100 per month and 100 customers paying $1,000 annually, the ARR is 500 x $100 x 12 + 100 x $1,000 = $700,000; the MRR is ARR divided by 12 months ($59,167).

Comprehensive List of Finance KPIs

Below is an extensive list of finance KPIs, each accompanied by a brief summary. Click on any KPI to delve into its detailed description, including the formula and examples.

Accounting

Budget & Expense Management

Customer & Market Economics

Employee & Payroll

Financial Statements

Liquidity & Solvency

Operational Costs

Receivables & Payables

Revenue & Profit

Shareholder & Creditor Relations

Taxes

Endnote

In today's data-driven world, navigating the sea of numbers and metrics can be overwhelming. But with the right set of financial KPIs, businesses can effectively chart their course, making informed decisions that drive growth and sustainability. As 2023 unfolds, let these KPIs be the guiding stars for your business, shining light on opportunities and steering you clear of potential pitfalls.

Looking to delve into other areas of your business? Check out our extensive range of different categories where you will find KPIs and let data drive your success.