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Financial Key Performance Indicators

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Financial Key Performance Indicators - Presentation Transcript

  1. Financial Key Performance Indicators (KPI)
  2. % of actual bills compared to expected bills
    • Definition % of actually generated bills compared to expected bills to be generated by selected period. The period is usually the planned meter reading/billing date. This date is defined in scheduling.
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    • Calculation # of invoiced billing docs / # of expected billing docs
  3. Accounts Payable Turnover Ratio
    • Definition This ratio indicates the number of times the Accounts Payable "turned over" - that is, were paid - in a period.
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    • Calculation Period Purchases/Accounts Payable, Ending Balance
  4. Acid Test Ratio
    • Definition This ratio compares the company's Current Liabilities with its Quick Assets - Cash, Marketable Securities, and Accounts Receivable. These assets are considered "quick" because they either are cash or can be converted to cash quickly. The Acid Test determines how well a corporation can meet its current obligations immediately - within days.
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    • Calculation [Quick Assets/Current Liabilities] * 100
  5. Administration Costs Reductions
    • Definition Administration costs reductions by automating transactions (reduction in redundant data entry)
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    • Calculation All costs reduction according to the use of an automating system
  6. Age structure of open items
    • Definition % of open items (value) that are overdue for more than 30 days, 60 days, 90 days.
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    • Calculation Sum of overdue open items (debits) by grid (query date - due date)
  7. Annual Sales To Inventory Ratio
    • Definition By comparing Inventory to Sales, this ratio indicates whether there is too little or too much inventory to support the given level of sales. The objective is to have the smallest level of inventory while still meeting sales requirements efficiently. Note: Cost of Goods Sold is generally used for this estimate (see: Inventory Turnover), but Sales may substitute for it. The Sales-To-Inventory-Ratio has to be annualized, because Sales accumulate over the year and Inventory balances remain more or less constant from quarter to quarter.
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    • Calculation Sales/Average Inventory
  8. Asset Coverage Ratio
    • Definition The Total Assets divided by the amount of Long Term Debt indicates the safety of the lender's capital. The higher the ratio, the greater the security.
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    • Calculation Total Assets/[Long Term Debt + Total Equity] * 100
  9. Available Liquidity
    • Definition Funds available within a certain maturity band
  10. Average Collection Period
    • Definition The Average Collection Period is the average number of days between the day the invoice is sent out and the day the customer pays the bill. Note: Average Daily Credit Sales equals Sales/365. This computation indicates the company's efficiency in enforcing its credit policy.
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    • Calculation Average Receivables/Sales * 365
  11. Average Inventory
    • Definition The sum of the daily/monthly/quarterly stock value for one year of the analysis divided by the number of days. Inventory is also known as 'Stock Value'.
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    • Calculation Total annual stock value / Number of days
  12. Average Receivables
    • Definition The Average Receivables is the sum of the beginning and the closing balance for a period divided by two.
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    • Calculation [Beginning Receivables + End Of Period Receivables]/2
  13. Average Working Capital
    • Definition Average Working Capital is computed by adding the Working Capital values at the beginning and the end of an accounting period and dividing by two.
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    • Calculation [Beginning Working Capital + End Working Capital]/2
  14. Average cost per incident
    • Definition Total costs of incident handling (service desk in total, sales & marketing partly, other involved departments partly) / Number of incidents
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    • Calculation Sum of costs for processing incidents (service desk in total, sales & marketing partly, other involved departments partly)  in a period / Number of incidents in a period
  15. Average due items customer collection per day
    • Definition "Average amount not paid per day, weighed by the number of days between the due date and the end date for the period/payment date. End date for period: End date of the query to be analyzed. Expired due date: The open item has not been paid/cleared before the due date. Example: 2 late payments received. Payment 1 = €200 paid after 12 days late. Payment 2 = €100 paid after 8 days late. Avg. amount not paid per day = (200€ x 12d + €100 x 8d) / (20d x 2p) = €80"
    • Calculation &quot;If payment date > due date or due date < end date for period: Sum [Amount of open items passed due date x ((payment date or end date for period) - due date)] / (# of days in period x # of invoices)&quot;
  16. Average payment period for materials
    • Definition This ratio indicates the number of times the Accounts Payable &quot;turned over&quot; - that is, were paid - in a period.
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    • Calculation Period Purchases/Accounts Payable, Ending Balance
  17. Average payments per day
    • Definition &quot;Average amount received per day, weighed by the number of days between the document date and the payment date. Example: 2 payments received in the last 100 days. Payment 1 = €100 paid after 12 days. Payment 2 = €50 paid after 8 days. Average amount received per day = (€100 x 12d + €50 x 8d) / (20d x 2p) = €40&quot;
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    • Calculation Sum [Amount per payment x # of days per payment] / (# of days in total x # of payments)
  18. Average price per kWh
    • Definition The average price that the kWh is sold for within each group of rates The average price takes the full amount paid (including standard charges) into account, not only consumption charges.
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    • Calculation Invoiced amount for each group of rates / total kWh invoiced within this rate group
  19. Billing errors by reason
    • Definition Finding the reasons why accounts are not billed, such as: - No meter reading or not plausible - Blocked contract - Outsorted
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    • Calculation # of billing errors by reason
  20. Borrowed Capital To Equity Ratio
    • Definition This ratio compares the Borrowed Capital to all owner's Equity - Common Stock, Preferred Stock, Retained Earnings, etc.
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    • Calculation Borrowed Capital/Equity
  21. Break Even Point
    • Definition The Break-Even Point is the Sales level at which the business neither profits nor loses money; Sales and Total Costs are exactly equal. It is a function of Sales, and Fixed and Variable Costs. This computation is made to enable the sales manager to know the point at which a product, a product line, or the business itself becomes profitable. It also can be used to calculate the Sales required to maintain a predetermined level of Operating Income if a variable changes.
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    • Calculation Fixed Costs/[1 - Variable Costs/Sales]
  22. Capital
    • Definition Capital is the difference between the value of a company's Assets and the total of its Liabilities. Capital represents the ownership interest of investors. It is also known as Net Worth or Equity. In a corporation, capital represents the Stockholders' Equity.
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    • Calculation Total Assets - Total Liabilities
  23. Capital Employed Ratio
    • Definition The Capital/Stockholders' Equity has to be adjusted by deducting the value of assets that do not contribute to Operating Income, such as marketable securities or other forms of investment. The ratio of Sales divided by the Capital Employed reflects how well capital (adjusted to exclude noncurrent Assets) is used to produce revenue (sales). A high rate of Capital Employed usually means that capital is being used efficiently.
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    • Calculation Sales/[Capital - Noncurrent Assets] * 100
  24. Capital Stock
    • Definition Capital Stock equity shares in a corporation authorized by its articles of incorporation and issued to stockholders. Two basic types of capital stock are Common Stock and Preferred Stock.
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    • Calculation Capital Stock
  25. Capital Structure Ratio Common Stock
    • Definition Capital structure ratios relate a particular portion of a corporation's capitalization to its total capitalization. This can be Preferred Stock, Common Stock, or Long Term Debt.
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    • Calculation Common Stock/Capital * 100
  26. Capital Structure Ratio Long Term Debt Ratio
    • Definition Capital structure ratios relate a particular portion of a corporation's capitalization to its total capitalization. This can be Preferred Stock, Common Stock, or Long Term Debt.
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    • Calculation Long Term Debt/Capital * 100
  27. Capital Structure Ratio Preferred Stock
    • Definition Capital structure ratios relate a particular portion of a corporation's capitalization to its total capitalization. This can be Preferred Stock, Common Stock, or Long Term Debt.
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    • Calculation Preferred Stock/Capital * 100
  28. Capital To Noncurrent Assets Ratio
    • Definition To compute this ratio, Capital is divided by Noncurrent Assets. It indicates how well Stockholders' Equity (Capital) supports the Noncurrent Assets of the company, with surplus available for Current Asset operating requirements. The more the ratio exceeds 100 percent, the more favorable the organization's ability to meet creditor commitments and debts.
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    • Calculation Capital/Noncurrent Assets * 100
  29. Capital To Total Liabilities Ratio
    • Definition The ratio of Capital divided by Total Liabilities tells creditors how well an organization is able to contract and meet its debt obligations. The higher this percentage, the better the company's ability to meet its obligations.
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    • Calculation Capital/Total Liabilities * 100
  30. Cash Flow
    • Definition Cash Flow is the net amount when Disbursements are deducted from Cash Receipts from a given operation or asset in a given period. In investments, it represents earnings before depreciation, amortization and non-cash charges. Sometimes called cash earnings
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    • Calculation Earnings Before Depreciation, Amortization, And Non Cash Charges
  31. Cash Flow Return On Investment
    • Definition Cash Flow Return On Investment compares the cash flow of a firm to its owners with the total assets employed to generate those flows. CFROI is calculated in two steps. First, it measures the inflation-adjusted cash flows available to all capital owners in the firm and compares them with the inflation-adjusted gross investment made by the capital owners. Then the ratio of gross cash flow to gross investment is translated into an internal rate of return by recognizing the finite economic life of depreciating assets and the residual value of nondepreciating assets such as land and working capital.
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    • Calculation Gross Cash Flow/Gross Investment
  32. Cash Flow per FTE
    • Definition The Cash Flow per FTE is equal to Cash Flow divided by Headcount Fulltime Equivalent Employees. It provides the dollar income per employee and is a macro measure of employee productivity. Cash Flow per FTE is used as a basic financial indicator and is useful to determine and set company growth targets.
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    • Calculation Cash Flow / Headcount FTE
  33. Cash Ratio
    • Definition The ratio compares the company's Cash and Marketable Securities with its Current Liabilities. The cash ratio includes even fewer assets that the acid test; it leaves out Accounts Receivable. The Cash Ratio determines how well a corporation can meet its current obligations immediately.
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    • Calculation [Cash + Marketable Securities]/Current Liabilities * 100
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  34. Cash Receipts To Ending Receivables Ratio
    • Definition To compute this ratio, the Cash Receipt Total is divided by the given period's ending Accounts Receivable balance.
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    • Calculation Cash Receipts/Ending Receivables * 100
  35. Cash Turnover
    • Definition The cash turnover ratio relates Sales to a company's cash balance. The ratio shows the effectiveness of an organization's use of its cash position to generate revenue.
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    • Calculation Sales/Cash
  36. Cash as a % of Sales
    • Definition This ratio is equal to Cash divided by Sales. It may be used, if proven valid over time, to assist in projecting cash positions in upcoming periods.
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    • Calculation Cash / Sales * 100
  37. Cash to Cash Cycle Time
    • Definition The Cash To Cash Cycle Time represents the time from which your company spends a dollar on purchased material to when it realizes a dollar received in revenue and has a direct impact on your company’s cash flow. Effective Supply Chain Planning reduces the inventory conversion period by manufacturing, processing and selling goods more quickly. This in turn reduces the Cash-to-Cash cycle.
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    • Calculation Inventory days of supply + Days sales outstanding - Average payment period for materials
  38. Channel Obsolescence Costs
    • Definition Aging allowances paid to channel partners, provisions for buy-back agreements
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    • Calculation All costs related to channel obsolescence
  39. Channel Obsolescence as a % of Inventory Carrying Costs
    • Definition Aging allowances paid to channel partners, provisions for buy-back agreements. Expressed as a % of Inventory Carrying Costs.
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    • Calculation All costs related to channel obsolescence / Inventory Carrying Costs * 100
  40. Chargeback and Rebate Liabilities as a percentage of sales
    • Definition Amount paid in Rebates and Chargebacks compared to the gross sales revenue
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    • Calculation
    • (Amount of yearly paid rebates + amount of yearly paid chargebacks) / total sales revenue
  41. Combined Ratio
    • Definition A measure of the relationship between money spent for claims and expenses and premiums taken in
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    • Calculation claims + expenses / premiums
  42. Common Stock
    • Definition Share in a public company or privately held firm. Common stockholders have voting and dividend rights. In the event of corporate bankruptcy, common stockholders are paid after bondholders and preferred stockholders. The issuing company shows common stock at its total par value, or no-par value, or stated value in the capital stock section of stockholders' equity.
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    • Calculation Common Stock
  43. Common Stock Leverage
    • Definition This type of leverage is computed by dividing Capital by the value of Common Stock. A low leverage stock offers return advantages because interest and preferred dividend claims are so low that most of the earnings are available for Common Stock Dividends.
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    • Calculation Capital/Common Stock
  44. Company Growth vs. Market Growth
    • Definition The company growth, based on the annual increase of Revenue, compared to the growth of the competitors.
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    • Calculation [Company growth - Market growth] / Market growth * 100
  45. Contribution Margin Rate
    • Definition Contribution Margin as a percentage of Sales
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    • Calculation (Sales – Cost of Goods Sold) / Sales
  46. Cost Estimate Accuracy
    • Definition % Difference in original cost estimate vs. final actuals (taking into account that the same scope is evaluated). Percentage difference of cost estimate to final cost.
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    • Calculation (Actual Cost - Initial Cost Estimate) / Actual Cost * 100
  47. Cost Of Capital
    • Definition Rate of return that is necessary to maintain market value (or stock price) of a firm, also called a hurdle rate, cutoff rate, or minimum required rate of return. The firm's cost of capital is calculated as weighted average of the costs of debt and cost of equity.
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    • Calculation (Weight Of Debt * Costs of Debt) + (Weight Of Equity * Cost of Equity)
  48. Cost Of Debt
    • Definition The Cost Of Debt is the interest charged by a company's lender.
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    • Calculation Average Interest Rate * Average Debt
  49. Cost Of Direct Labor To Cost of Goods Sold Ratio
    • Definition To monitor cost elements, each type of expense may be expressed as a percentage of overall Cost of Goods Sold. While the overall ratio of Cost of Goods Sold To Sales may remain in line with the historical average, an individual cost element may be increasing disproportionately.
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    • Calculation Direct Labor Costs/Cost of Goods Sold * 100
  50. Cost Of Direct Labor To Sales Ratio
    • Definition Any of the individual cost elements may be used to check the feasibility of Sales projections and to estimate costs for upcoming periods.
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    • Calculation Direct Labor Costs/Sales * 100
  51. Cost Of Equity
    • Definition The rate of return required by a company's common stockholders. Equity funds include both capital stock (common stock and preferred stock) and retained earnings. Beta Factor is a weight to calculate the risk.
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    • Calculation Risk free Investment + (Market Risk Premium * Beta Factor)
  52. Cost Of Labor To Sales Ratio
    • Definition The Cost Of Labor To Sales Ratio is equal to the Cost Of Labor divided by Sales. This ratio can be used to check the feasibility of sales projections and to estimate costs for upcoming periods.
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    • Calculation Cost Of Labor/Sales * 100
  53. Cost Of Material And ODC To Sales Ratio
    • Definition The Cost Of Material And ODC Ratio is equal to the Cost Of Material and Other Direct Costs(ODC) divided by Sales. This ratio can be used to check the feasibility of sales projections and to estimate costs for upcoming periods.
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    • Calculation (Cost Of Material + other Direct Costs)/Sales * 100
  54. Cost Performance Index (CPI)
    • Definition Budgeted cost of work performed divided by actual cost of work scheduled
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    • Calculation Budget cost of work performed / Actual cost of work scheduled * 100
  55. Cost of Goods Sold
    • Definition Cost of Goods Sold consists of the expenses that can be directly attributed to the making of the company's product or the rendering of its service. For manufacturing: Direct Labor Costs + Material Costs + Factory Overhead.
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    • Calculation Cost of Goods Sold
  56. Cost of Goods Sold Per Direct Labor Hour Ratio
    • Definition The ratio compares the Cost of Goods Sold to the Direct Labor Hours.
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    • Calculation Cost of Goods Sold/Direct Labor Hours
  57. Cost of Goods Sold Per Unit Sold
    • Definition This ratio compares the total Cost of Goods Sold to Units sold.
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    • Calculation Cost of Goods Sold/Units Sold
  58. Cost of Goods Sold To Sale Ratio
    • Definition The ratio of Cost of Goods Sold divided by Sales is useful in two ways: First, if the organization has established an average ratio of Cost of Goods Sold to Sales, it confirms whether an actual Cost of Goods Sold figure is above or below the historical average. Then, the Total Cost of Goods Sold can be estimated based on projected Sales, if the ratio proves to be stable over time.
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    • Calculation Cost of Goods Sold/Sales * 100
  59. Cost ratio
    • Definition Sum of all costs in comparison to gross premiums
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    • Calculation costs / gross premiums * 100
  60. Costs of every submission
    • Definition Time and efforts to adjust content and respond to enhancements
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    • Calculation Sum of costs of processes involved in the submission scenario
  61. Costs of stability testing in percentage of the whole pharmaceutical development process
    • Definition Measuring the own cost structure per product group against industry standards
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    • Calculation Costs of stability testing per product group / Total costs of whole pharmaceutical development process per product group * 100
  62. Credit Portfolio Diversification
    • Definition Origination of loans to different obligors/industry segments/countries in order to reduce overall risk
  63. Current And Prior Period Billings To Current Costs Ratio
    • Definition The ratio of Current And Prior Billings to Current Costs calculates the rate of collections.
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    • Calculation [Current Period Billings + Prior Period Billings]/Current Costs
  64. Current Assets
    • Definition Total Current Assets is the total amount of assets that are considered to be convertible into cash within a relatively short period of time, usually a year.
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    • Calculation Cash and Equivalents + Receivables + Inventories + Other Current Assets
  65. Current Assets To Working Capital Ratio
    • Definition Assessing the ratios of Current Assets divided by Working Capital is critical to understanding the source of an organization's Working Capital. Average figures should be used for Working Capital and Current Assets.
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    • Calculation Average Current Assets/Average Working Capital
  66. Current Costs
    • Definition Price of replacing an asset identical to an existing one.
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    • Calculation Current Costs
  67. Current Liabilities
    • Definition Total Current Liabilities is the total amount of liabilities that are considered to be due within a relatively short period of time, usually a year.
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    • Calculation Accounts Payable + Short-Term Debt + Other Current Liabilities
  68. Current Liabilities To Working Capital Ratio
    • Definition Assessing the ratios of Current Liabilities divided by Working Capital is critical to understanding the source of an organization's Working Capital. Average figures should be used for Working Capital and Current Liabilities.
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    • Calculation Average Current Liabilities/Average Working Capital
  69. Current Ratio
    • Definition The Current Ratio compares Current Assets to Current Liabilities. It indicates the number of times Current Assets will pay off Current Liabilities.
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    • Calculation Current Assets/Current Liabilities
  70. Cycle Time: Declaration to Invoice
  71. Days Of Sales In Backlog
    • Definition Backlog: Order, which has not been delivered yet. The historical analysis of the Days-Of-Sales-In-Backlog factor helps to evaluate an organization's ability to handle its backlog. Note: Use 90 days for a quarter, 360 for a year.
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    • Calculation [Backlog / Sales]*Days In Period
  72. Days Purchases In Disbursements Ratio
    • Definition This ratio relates how much a company purchases to how much cash it actually disburses in a given period. It is expressed in terms of days' worth of purchase.
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    • Calculation [Disbursements/Period Purchases]*Days In Period
  73. Days Purchases In Payables Ratio
    • Definition This ratio relates the Amounts Payable to an organization's total Purchases for a given period. When validated by historical data, this factor acts as a guideline in verifying the feasibility of payables figures that are developed by other means.
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    • Calculation [Accounts Payable, ending balance/Period Purchases]*Days In Period
  74. Days Purchases Outstanding Ratio
    • Definition The Days Purchases Outstanding is a ratio used to determine whether an organization is meeting its Trade Payable commitments on schedule.
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    • Calculation [Trades Payable/Period Purchases]*Days In Period
  75. Days Sales Outstanding
    • Definition The outstandings of a company expressed in their daily Sales
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    • Calculation Average Receivable / [Sales / 365]
  76. Development costs for new/changed packaging variant
    • Definition All costs involved in the developement process for one new package form.
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    • Calculation Sum of all costs deriving from the development for new/ changed packaging variant
  77. Direct Cost To Cost of Goods Sold Ratio
    • Definition To monitor cost elements, each type of expense may be expressed as a percentage of overall Cost of Goods Sold. While the overall ratio of Cost of Goods Sold To Sales may remain in line with the historical average, an individual cost element may be increasing disproportionately.
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    • Calculation Individual Direct Cost/Cost of Goods Sold * 100
  78. Direct Costs
    • Definition Expenses that can be directly identified with the costing object such as a product and department.
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    • Calculation Direct Costs
  79. Direct Labor Costs
    • Definition Costs for Direct Labor Hours.
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    • Calculation Direct Labor Costs
  80. Direct Labor Hours
    • Definition Hours of work directly involved in making a product.
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    • Calculation Direct Labor Hours
  81. Disbursements
    • Definition Payment by cash or by check.
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    • Calculation Disbursements
  82. Disbursements To Accounts Payable Ratio
    • Definition To compute this ratio, the actual Disbursements are divided by the Accounts Payable during the period. When the ratio is calculated for successive periods, the cost manager is able to determine whether Accounts Payable are being over- or underpaid.
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    • Calculation Disbursements/Accounts Payable
  83. Dunning Quota
    • Definition Number of receivables that are dunned in comparison to the total number of receivables
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    • Calculation #dunnes receivables / #receivables * 100
  84. Dunning amount
    • Definition Total amount to be requested. Average, maximum, and minimum.
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    • Calculation Debits in dunning
  85. Dunning efficiency
    • Definition Paid amounts after they have been dunned. Drill-down to dunning procedure.
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    • Calculation Amount paid after dunning (dunning status set)
  86. DUNNING RATE
    • Definition   Percentage of annual turnover involved in dunning. 
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    • Calculation   Debits in dunning / total debit amount 
  87. EARNINGS BEFORE DEPRECIATION, INTEREST, AND TAX
    • Definition   This measure of cash flow is equal to pretax income and interest expense and depreciation.
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    • Calculation   Sales - COGS - Operating Costs [excluding Depreciation]
  88. EARNINGS BEFORE INTEREST AND TAXES
    • Definition   A measure of a company's earning power from ongoing operations, equal to earnings before deduction of interest payments and income taxes. It is also called Operating Profit or Operating Income.
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    • Calculation   Sales - COGS - Operating Costs - other gains & losses
  89. EARNINGS BEFORE INTEREST TAX DEPRECIATION AMORTIZATION
    • Definition   Estimated by adding depreciation and amortization back to operating income (EBIT).
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    • Calculation   Sales - COGS - Operating Costs [excluding Depreciation & Amortization]
  90. EARNINGS BEFORE TAXES
    • Definition   A measure of a company's earning power from ongoing operations, equal to earnings before deduction income taxes.
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    • Calculation   Sales - COGS - Operating Costs - other gains & losses - Interest
  91. ECONOMIC PROFIT - CAPITAL CHARGE
    • Definition   The Economic Profit EP is a periodic measure based on the principles of shareholder value and basically the same as Economic Value Added EVA(TM) from Stewart. EP shows if a company is creating value for the shareholder or not. Only if the EP is positive then the company creates &quot;added value&quot;. If there is &quot;added value&quot; then a shareholder gets better conditions compared profitability to risk than investing his money in a comparable risk free investment. In the Capital Charge form, EP can be easily calculated as follows: NOPAT (=Net Operating Profit After Taxes) minus Weighted Average Cost of Capital multiplied with Capital.
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    • Calculation   NOPAT - [WACC * Capital]
  92. ECONOMIC PROFIT - VALUE SPREAD
    • Definition   The Economic Profit EP is a periodic measure based on the principles of shareholder value and basically the same as Economic Value Added EVA(TM) from Stewart. EP shows if a company is creating value for the shareholder or not. Only if the EP is positive then the company creates &quot;added value&quot;. If there is &quot;added value&quot; then a shareholder gets better conditions compared profitability to risk than investing his money in a comparable risk free investment. In the Value Spread form, the Economic Profit can be easily calculated as follows: NOPAT (=Net Operating Profit After Taxes) is divided by Capital. Then the Cost of Capital is deducted. Finally, the result is multiplied with Capital.
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    • Calculation   Capital * [[NOPAT/Capital] - Cost Of Capital]
  93. ECONOMIC VALUE ADDED - CAPITAL CHARGE
    • Definition   The Economic Value Added (TM) from Stewart is a periodic measure based on the principles of shareholder value. EVA (TM) shows if a company is creating value for the shareholder or not. Only if the EVA (TM) is positive then the company creates &quot;added value&quot;. If there is &quot;added value&quot; then a shareholder gets better conditions compared profitability to risk than investing his money in a comparable risk free investment. In the Capital Charge form, EVA (TM) can be easily calculated as follows: NOPAT (=Net Operating Profit After Taxes) minus Weighted Average Cost of Capital multiplied with Capital.
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    • Calculation   NOPAT - [WACC * Capital]
  94. ECONOMIC VALUE ADDED - VALUE SPREAD
    • Definition   The Economic Value Added (TM) from Stewart is a periodic measure based on the principles of shareholder value. EVA (TM) shows if a company is creating value for the shareholder or not. Only if the EVA (TM) is positive then the company creates &quot;added value&quot;. If there is &quot;added value&quot; then a shareholder gets better conditions compared profitability to risk than investing his money in a comparable risk free investment. In the Value Spread form, EVA (TM) can be easily calculated as follows: NOPAT (=Net Operating Profit After Taxes) is divided by Capital. Then the Cost of Capital is deducted. Finally, the result is multiplied with Capital.
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    • Calculation   Capital * [[NOPAT/Capital] - Cost Of Capital]
  95. EQUITY
    • Definition   Total Equity equals Preferred Stock Equity + Common Stock Equity.
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    • Calculation   Preferred Stock Equity + Common Stock Equity.
  96. EXPECTED LOSS
    • Definition   Average future loss expected for a credit portfolio with risky items
  97. EXPENSE PER FULL-TIME EQUIVALENT EMPLOYEE
    • Definition   The Expense Factor is equal to Total Operating Expense (all operating expenses!) divided by total FTEs. It represents the total organizational expense per employee. All organizations aim to reduce operating costs so that breakeven points are reduced. Expense factor is as industry-E63driven as Revenue Factor and therefore comparisons should focus primarily within industry sectors.
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    • Calculation   (Expenses/Headcount FTE)*100
  98. FINISHED GOODS INVENTORY CARRYING COSTS AS A % OF INV. CARRYING COSTS
    • Definition   Sum of all costs associated with finished goods inventory: opportunity cost, shrinkage, insurance and taxes, total obsolescence, channel obsolescence and field sample obsolescence. Expressed as a % of Inventory Carrying Costs.
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    • Calculation   ( Finished goods opportunity cost + finished goods shrinkage + finished goods insurance and taxes + finished goods total obsolescence + finished goods channel obsolescence + finished goods field sample obsolescence ) / Inventory Carrying Costs * 100
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  99. FIXED ASSET TURNOVER
    • Definition   The Fixed Asset Turnover is a comparison of annualized Sales to the average value of Fixed Assets. This ratio can provide insight whether an organization has too much capacity or too little for a given Sales.
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    • Calculation   Sales/Fixed Assets * 100
  100. FIXED ASSETS
    • Definition   Net Fixed Assets are the assets of a company that are of a relatively permanent nature and are not intended for resale, such as property, plants, and equipment. The figure is stated as cost minus accumulated depreciation and amortization.
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    • Calculation   Fixed Assets
  101. FIXED ASSETS TO LONG TERM DEBT RATIO
    • Definition   The ratio of Fixed Assets divided by Long-Term Debt reflects the general degree of protection for the bondholders' investment, providing the bondholders have priority claims on the assets.
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    • Calculation   Fixed Assets/Long Term Debt * 100
  102. FIXED ASSETS TO STOCKHOLDERS' EQUITY RATIO
    • Definition   This ratio indicates the percentage of an organization's Fixed Assets that are financed by Stockholders.
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    • Calculation   Fixed Assets/Stockholders' Equity * 100
  103. FIXED ASSETS TO TOTAL ASSETS RATIO
    • Definition   This ratio of Fixed to Total Assets is a guideline in estimating Fixed Assets expenditures given total assets. It is also a tool in measuring Fixed Asset growth in proportion to Total Assets.
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    • Calculation   Fixed Assets/Total Assets * 100
  104. FIXED COSTS
    • Definition   Costs that remain constant in total regardless of changes in activity within a relevant range. Costs that do not vary depending on production or sales levels, such as rent, property tax, insurance, or interest expense.
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    • Calculation   Fixed Costs
  105. FIXED COSTS PER UNIT
    • Definition   Fixed Costs Per Unit equals Total Fixed Costs for the period divided by units produced in the period.
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    • Calculation   Fixed Costs / Units Produced
  106. FREE CASH FLOW
    • Definition   The Free Cash Flow is equal to the remaining Net Operating Profit After Taxes (NOPAT) after necessary investments have been deducted. It represents the cash earnings a company would generate if its capitalization were unleveraged.
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    • Calculation   NOPAT - Necessary Investments
  107. FUNDED CAPITAL RATIO
    • Definition   The Funded Capital Ratio is computed by dividing the sum of Long-Term (funded) Debt and Stockholders' Equity by Fixed Assets. It reflects how much of the borrowed and investors' capital goes toward the financing of Fixed Assets.
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    • Calculation   [Long Term Debt + Stockholders' Equity]/Fixed Assets * 100
  108. GENERAL AND ADMINISTRATIVE EXPENSES
    • Definition   All expenses incurred in connection with performing general and administrative activities. Examples are executives' salaries and legal expenses.
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    • Calculation   General and Administrative Expenses
  109. GROSS PROFIT
    • Definition   Gross Profit is equal to Sales less the Cost of Goods Sold. It is also known as Gross Margin. It identifies the amount available to cover other operating expenses.
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    • Calculation   Sales - Cost of Goods Sold
  110. GROSS PROFIT TO SALES RATIO
    • Definition   The ratio of Gross Profit divided by Sales assists the sales manager in monitoring the Cost of Goods Sold from one period to the next. It also helps projecting the Cost of Goods Sold, given a Sales estimate.
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    • Calculation   Gross Profit/Sales * 100
  111. HR SERVICE COST PER EMPLOYEE
    • Definition   The cost for HR service per employee per year
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    • Calculation   Average cost per HR transaction * Average number of transactions
  112. INDIRECT COSTS
    • Definition   Expenses that can't be directly identified with the costing object (or identified with difficulty) such as a product and department. Example: Advertising for the company. It is also known as Common Costs.
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    • Calculation   Indirect Costs
  113. INDIRECT EXPENSE PER UNIT
    • Definition   This ratio compares Indirect Expenses to Product Units. The ratio helps to estimate total cost based on the labor rate.
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    • Calculation   Indirect Expenses/Units Produce
  114. INDIRECT EXPENSES
    • Definition   Usually, Indirect Expenses consist of General And Administrative (G&A) Costs, Selling Expenses, and Other Indirect Costs (OIC), which cannot be attributed to the making of a specific product.
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    • Calculation   G&A Expenses + Selling Expenses + other Indirect Costs
  115. INDIRECT TO COGS COST RATIO
    • Definition   Overhead expenses are not directly related to the manufacturing of the company product. Note: Direct Costs + Indirect Costs in an equivalent of Cost of Goods Sold. Comparing Indirect with Direct costs is one way of monitoring the outflow of funds because of rising overhead.
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    • Calculation   Indirect Costs/CoGS * 100
  116. INDIVIDUAL TO TOTAL OVERHEAD RATIO
    • Definition   Any of the Individual Overhead can be expressed as a ratio of Total Overhead Expense. Individual Overhead Expense ratios enable the cost manager to arrive at historically validated guideline ratios and to compare actual ratios against then. In the absence of guidelines, the cost manager can monitor changes in expense levels from one period to the next.
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    • Calculation   Individual Overhead /Total Overhead * 100
  117. INTEREST EXPENSE
    • Definition   The Interest Expense is the current period cost of borrowing funds that is known as a financial expense in the Income Statement. It is equal to the Average Debt times the Corporate Average Borrowing Rate
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    • Calculation   Average Debt * Corporate Average Borrowing Rate
  118. INTEREST PAID TO BORROWED CAPITAL RATIO
    • Definition   This ratio compares the Interest Paid to the amount of Borrowed Capital. Note: Equity excludes borrowed capital. On the balance sheet it would be the sum of Preferred Stock, Common Stock, and Retained Earnings.
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    • Calculation   Interest Paid/Borrowed Capital * 100
  119. INTERNAL RATE OF RETURN
    • Definition   The Internal Rate of Return is the discount rate at which net present value (NPV) investment is zero. It would make the present value of future cash flows plus the final market value of an investment or business opportunity equal the current market price of the investment or opportunity. To calculate the IRR a interpolation has to be done, if time [t] is greater than 2 years.
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    • Calculation   0 = -[Net Present Value] + Sum [ Cash Flow[t] / [[1+IRR]^t] ]
  120. INVENTORY TO WORKING CAPITAL RATIO
    • Definition   This comparison relates the average Inventory value to average Working Capital. This ratio demonstrates the part of Current Assets that are the least liquid. Inventories that greatly exceed Working Capital indicate that Current Liabilities exceed liquid Current Assets (cash and cash equivalents).
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    • Calculation   Avg. Inventory/Avg. Working Capital * 100
  121. INVESTMENT INCOME/INTEREST RATE
    • Definition   The portion of a company´s income which is derived from its loans, including interest
  122. INVESTMENT TURNOVER
    • Definition   Return earned on capital invested in a business. A higher ratio indicates good use of the funds placed into the business.
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    • Calculation   Sales / [Stockholders' Equity + Long Term Liabilities] * 100
  123. INVESTMENT INCOME
    • Definition   The portion of a company's income which is derived from its investments, including interest and dividends on stocks and bonds
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    • Calculation   investment income / income * 100
  124. INVESTMENT INCOME /INTEREST RATE
    • Definition   The portion of a company's income which is derived from its investments, including interest and dividends on stocks and bonds
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    • Calculation   investmet income / invested capital * 100
  125. INVOICE REVERSAL RATE
    • Definition   Percentage of invoices that were reversed within a certain period.  - Reversed invoices: Invoices which were ‘incorrect’ and therefore cancelled by creating a reversal document for the invoice. Only invoices that are accounted are considered, not the ones that were outsorted.  - Period: Date intervals to be decided in the report.
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    • Calculation   [# of reversed invoices during period A]  x 100 / [Total # of invoices  during period A
  126. ISSUED STOCK
    • Definition   Authorized shares that have been issued for cash, services, or other property.
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    • Calculation   Issued Stock
  127. Liabilities
    • Definition Amount payable in dollars or future services to be rendered (e.g. warranties payable).
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    • Calculation Total Current Liabilities + Total Noncurrent Liabilities
  128. LIABILITIES TO CAPITAL RATIO
    • Definition   The ratio of Liabilities divided by Capital indicates the proportion of capital furnished by short-term creditors. If the current portion of Long-Term Debt is listed among current liabilities on the balance sheet, it must be deducted before making this computation.
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    • Calculation   Liabilities/Capital * 100
  129. LIABILITIES TO EQUITY RATIO
    • Definition   The ratio compares Total Liabilities to Equity. A high ratio of Total Liabilites to Equity indicates that the organization can meet its overall debt obligations only with difficulty. The lower the ratio, the better these obligations are &quot;covered&quot;.
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    • Calculation   Liabilities/Equity * 100
  130. LIABILITIES TO TOTAL ASSETS RATIO
    • Definition   The ratio of the average value of Liabilities divided by the average Total Assets is a gauge of how much total debt an organization can incur and still cope without financial difficulty.
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    • Calculation   Liabilities / Total Assets * 100
  131. LOAN MARGINS
    • Definition   Expressed as percentage points; the amount that a lender adds to an index to arrive at the final interest rate
  132. LONG TERM DEBT
    • Definition   Long Term Debt represents the amount of borrowings due more than one year from the date of the balance sheet.
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    • Calculation   Long Term Debt
  133. LOSS RATIO
    • Definition   The ratio of claims to premiums. It may be calculated in several different ways, using paid premiums or earned premiums, and using paid claims with or without changes in claim reserves and with or without changes in active life reserves
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    • Calculation   claims / premiums * 100
  134. MACHINE HOUR RATE
    • Definition   The Machine Hour Rate is the cost per hour of running the company's production equipment. The rate includes specific charges to each machine, heating, lighting, building costs, and all other general and service costs. The total of all machine-related and prorated costs are then divided by the number of hours the machinery runs over the period in question.
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    • Calculation   (Machine Related Expenses + Heating, Light, Plant + Overhead)/Annual Machine Hours
  135. MARKET PORTFOLIO DIVERSIFICATION
    • Definition   Investment in different securities/financial instruments/countries in order to reduce overall risk by taking the underlying correlations into account
  136. MARKET SHARE
    • Definition   A company revenue divided by all the revenue of competitors within the same market.
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    • Calculation   Companies Revenue / Total Category Revenue * 100
  137. MARKET SHARE INDEX
    • Definition   The regional market share expressed as a percentage of the national market share.
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    • Calculation   Regional market share / National market share *100
  138. MARKET SUCCESS FACTOR
    • Definition   Profitability as Net Income divided by Revenue.
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    • Calculation   Profitability * Market share Index
  139. Market Value Added
    • Definition The Market Value Added is equal to the present value of all future EVA. Sum = Sum over all i periods, EVA(i) = EVA in the ith period, n(i) interest rate from now to the ith period, 1/n(i) = discount factor for the ith period.
  140. MATERIAL AND OTHER DIRECT COSTS TO COST OF GOODS SOLD RATIO
    • Definition   To monitor cost elements, each type of expense may be expressed as a percentage of overall Cost of Goods Sold. While the overall ratio of Cost of Goods Sold To Sales may remain in line with the historical average, an individual cost element may increase disproportionately.
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    • Calculation   Material And Other Direct Costs/Cost of Goods Sold * 100
  141. NOPAT - FINANCING METHOD
    • Definition   NOPAT is calculated in order to understand the operating profitability attributable to all fund providers i.e. both debt and equity. This therefore excludes the costs of financing (interest payments and dividends and the tax effect of that financing). NOPAT = Net Income Before Interest After Taxes. The difference to the Net Income is that no financing revenues or expenses are included in NOPAT. It can be calculated as Net Income After Tax plus Total Adjustments minus the Tax Savings on Adjustments. NOPAT is equal to NOPLAT (Net Operating Profit Less Adjusted Taxes).
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    • Calculation   Retained Earnings - Non operational gain + Non operational losses + interest expenses after ta
  142. NOPAT - OPERATING METHOD
    • Definition   NOPAT is calculated in order to understand the operating profitability attributable to all fund providers i.e. both debt and equity. This therefore excludes the costs of financing (interest payments and dividends and the tax effect of that financing). NOPAT = Net Income Before Interest After Taxes. The difference to the Net Income is that no financing revenues or expenses are included in NOPAT. It can be calculated as Operating Revenue minus Operating Expenses minus Tax. NOPAT is equal to NOPLAT (Net Operating Profit Less Adjusted Taxes).
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    • Calculation   Sales- COGS - Operating Expenses - Tax
  143. NET ASSET VALUE
    • Definition   Book Value is the value of a stock based only on the issuing corporation's equity. It tells an investor what the common stock (issued and outstanding) would be worth if the company were to liquidate all its assets, pay off all its liabilities, and go out of business. This figure gauges the value of the company's assets per share. It is called &quot;Net&quot; because Liabilities are deducted.
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    • Calculation   Stockholders' Equity/Number of Common Stock
  144. NET INCOME
    • Definition   Net Income is the amount left after adding income from other (nonoperational) sources and deducting all expenses and taxes from Sales. It is also known as Net Income. Net Income is the income after accounting for all corporate actions: Income from Continuing Operations + Income from Discontinued Operations + Income from Extraordinary Items + Income from Accumulative Effect of Accounting Changes + Income from Tax Loss Carryforward + Income from Other Gains/Losses.
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    • Calculation   Revenue - [All Expenses + Tax]
  145. NET INCOME BEFORE TAXES
    • Net Income Before Taxes is the profit left after deducting all expenses from operating and nonoperating income, but before providing for taxes. To obtain this value add other miscellaneous income (such as sales discounts, gain on sale of fixed assets, interest income, etc. and reduce this amount by other deductions (such as interest expense, project abandonment, deferred development, and loss on the sale of fixed assets). It is also known as Pretax Profit.
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    • Calculation   [Operating Income + Nonoperating Income] - All expenses, including interest expense
  146. NET INCOME BEFORE TAXES TO SALES RATIO
    • Definition   This ratio is an organization's Net Income Before Taxes divided by Sales.
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    • Calculation   Net Income Before Taxes / Sales * 100
  147. NET INCOME TO CAPITAL RATIO
    • Definition   This ratio is derived by dividing Net Income (from the Income Statement) by Stockholders' Equity (from the Balance Sheet).
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    • Calculation   Net Income/Stockholders' Equity * 100
  148. NET INCOME TO CAPITAL RATIO (PREFERRED STOCK)
    • Definition   This ratio is derived by dividing Net Income by Stockholders' Equity. If a corporation has issued preferred stock, then the Dividends must be deducted from Net Income and the Par Value subtracted from Capital (or Net Worth).
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    • Calculation   [Net Income - Preferred Dividends]/[Stockholders' Equity - Preferred Stock Par Value] * 10
  149. NET INCOME TO EQUITY RATIO
    • Definition   This ratio compares Net Income to Equity. Note: Equity excludes borrowed capital. On the balance sheet it would be the sum of Preferred Stock, Common Stock, and Retained Earnings.
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    • Calculation   Net Income/Equity * 100
  150. NET OPERATING PROFIT LESS ADJUSTED TAXES
    • Definition   The Net Operating Profit After Tax is equal to Sales minus Operating Expenses and Taxes (NOPAT).
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    • Calculation   Sales - Operating Expenses - Operating Taxe
  151. NET VALUE ADDED RATIO
    • Definition   This ratio is Revenue minus Expense, divided by Total Salary. It measures profit generated per employee, after taking Salary into account. It is also known as Salary Profit Factor.
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    • Calculation   (Net Profit/Salary)*100
  152. NEW BUSINESS QUOTA
    • Definition   The value of new business during a year in comparison to the in-force at the beginning of the year
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    • Calculation   Premiums new business / premiums in-force * 100
  153. NONCURRENT ASSETS
    • Definition   Noncurrent Assets is the total amount of assets that have a life in excess of one year and more.
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    • Calculation   Noncurrent Assets
  154. NONOPERATING EXPENSES
    • Definition   Nonoperating Expenses is the combination of &quot;Other Taxes&quot; and &quot;Interest Expense.&quot; &quot;Other Taxes,&quot; also known as other operating expenses, for most companies includes taxes other than income taxes (except excise taxes, which the company does not actually pay, but only collects on behalf of the government). For financial companies, all expenses other than interest expense and income taxes are included in Other Taxes. &quot;Interest Expense&quot; is all fixed interest expenses net of capitalized interest. This category also includes dividends on preferred stock of unconsolidated subsidiaries.
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    • Calculation   Nonoperating Expenses
  155. NONOPERATING INCOME
    • Definition   Income, which is not operational income, e.g. interest (if the company is not a bank).
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    • Calculation   Nonoperating Income
  156. NUMBER OF RECALCULATED CONDITIONS FOR EACH AGREED CONDITION
    • Definition   Complex conditions are often not recalculated because of the amount of time and level of understanding required. The accuracy of all cedents’ accounts has to be checked. The KPI describes the grade of recalculation.
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    • Calculation   Number of recalculated conditions / number of all agreed conditions * 10
  157. OPERATING CASH FLOW
    • Definition   The expected or certain value of a future cash flow discounted to the present at an appropriate interest (discount) rate. It is equal to the earnings before depreciation minus taxes. This ratio measures the cash generated from operations, not counting capital spending or working capital requirements. Sum = Sum over all i periods, Cash Flow(i) = Cash Flow in the ith period, n(i) interest rate from now to the ith period, 1/n(i) = discount factor for the ith period.
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    • Calculation   Sum[ [Cash Flow[i]] * [1/n[i]]]
  158. OPERATING CASH FLOW DEMAND
    • Definition   The Operating Cash Flow Demand equals earnings before depreciation minus taxes. It measures the cash generated from operations, not counting capital spending or working capital requirements.
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    • Calculation   Earnings Before Depreciation - Taxe
  159. OPERATING EXPENSES
    • Definition   The day-to-day expenses incurred in running a business, such as sales and administration, as opposed to production.
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    • Calculation   Operating Expenses
  160. OPERATING INCOME
    • Definition   The Operating Income , or Operating Income, is equal to Sales less all related expenses applying to the normal business activities (Cost of Goods Sold, General and Administrative Expenses, Selling Expenses).
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    • Calculation   Sales - [Cost of Goods Sold + G&A Expenses + Selling Expenses]
  161. OPERATING INCOME TO SALES RATIO
    • Definition   Operating Income is divided by Sales. This ratio assists the manager in monitoring operations from period to period and in projecting Operating Income, given a Sales estimate. Moreover, it is a good indicator of an organization's ability to make a profit. Period-to-period fluctuations can trigger investigations into the possibility of rising costs or decreased Sales.
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    • Calculation   Operating Income/Sales * 100
  162. OPERATING LEVERAGE RATIO
    • Definition   The Operating Leverage Ratio assesses the effect of fluctuating Sales on Operating Profits. It is the leverage a company gains from Sales, it says that Operating Income changes &quot;so many times&quot; the percentage change of Sales. The factor is inversely proportional to Operating Income and changes with fluctuations in Sales and in Expenses. Note: Income risk is distinguished from financial risk, which is posed by the heavy use of debt support by creditors.
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    • Calculation   [Sales - Variable Costs]/Operating Income * 100
  163. OPERATING REVENUE MARGIN
    • Definition   Operating Revenue minus Operating Expenses divided by Operating Revenue. This ratio assists the manager in monitoring operations from period to period. Moreover, it is a good indicator of an organization's ability to make a profit. Period-to-period fluctuations can trigger investigations into the possibility of rising costs or decreased Sales. Operating Revenue equals Net Sales plus other regular income sources related to the normal business operations of the entity (e.g., lease income if a major activity).
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    • Calculation   (Revenue-Operating Expenses) / Revenue * 100
  164. OUTSTANDING RECEIVABLES QUOTA
    • Definition   Outstanding receivbles in comparison to all receivables
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    • Calculation   outstanding receivables / total receivables * 100
  165. OVERHEAD
    • Definition   Total of all costs of manufacturing except direct materials and direct labor. It includes such items as depreciation, fringe benefits, payroll taxes and insurance.
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    • Calculation   Overhead costs
  166. OVERHEAD TO COST OF GOODS SOLD RATIO
    • Definition   To monitor cost elements, each type of expense may be expressed as a percentage of overall Cost of Goods Sold. While the overall ratio of Cost of Goods Sold To Sales may remain in line with the historical average, an individual cost element may increase disproportionately.
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    • Calculation   Overhead/Cost of Goods Sold * 100
  167. OVERHEAD TO DIRECT LABOR HOURS RATIO
    • Definition   This ratio compares the Total Overhead Cost to Direct Labor Hours. With a historically validated ratio, the cost manager can determine whether overhead is increasing or merely keeping pace with direct labor hours, estimate product costs per direct labor hour, and develop a factory overhead budget.
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    • Calculation   Overhead/Direct Labor Hours
  168. OVERHEAD TO PRIME COST RATIO
    • Definition   This ratio compares Overhead with the sum of Direct Labor plus Material and Other Direct Costs. If this ratio can be validated as accurate, it can serve as a guideline in planning and as a tool in checking actual figures, once on hand.
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    • Calculation   Overhead/(Direct Labor Costs + Direct Materials & Other Direct Costs)
  169. OVERHEAD TO SALES RATIO
    • Definition   The Overhead-To-Sales-Ratio is equal to the Overhead divided by Sales. This ratio can be used to check the feasibility of sales projections and to estimate costs for upcoming periods.
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    • Calculation   Overhead/Sales * 100
  170. OVERHEAD AS % OF TOTAL COSTS
    • Definition   Total of all costs of manufacturing except direct materials and direct labor. It includes such items as depreciation, fringe benefits, payroll taxes and insurance.
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    • Calculation   (Overhead costs / Total costs) * 100%
  171. PERCENT REVENUE GROWTH – EXISTING CUSTOMERS
    • Definition   The revenues growth generated by existing customer in the period compared with the previous period expressed as a percentage.
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    • Calculation   (Revenues generated by existing customer in the period - Revenues generated by existing customer in previous period) / Revenues generated by existing customer in previous period * 100
  172. PERCENT OF NEW CUSTOMERS PER YEAR
    • Definition   Number of new customers per year divided by total customers. Total customers are the number of customers at the end of the period.
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    • Calculation   Number of new customers per year/ Total customers * 100
  173. PERCENTAGE OF INVOICES PAID IN TIME
    • Definition   Percentage of invoices paid on time for a certain period. The reference date is the document creation date. Only documents coming from invoices are taken into account (no dunning letters). 
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    • Calculation   # of invoices paid in time (<= due date) / all paid invoices
  174. PLANNED REVENUE PER RESERVATION
    • Definition   Demonstrates how efficient our reservation planning is at average.
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    • Calculation   Planned revenue per reservation / planned reservations
  175. PREFERRED STOCK
    • Definition   Class of capital stock that has preference over common stock in the event of corporate liquidation and in the distribution of earnings. Except in unusual instances, no voting right exist.
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    • Calculation   Preferred Stock
  176. PREMIUM GROWTH
    • Definition   The value of premium volume actual year in comparison to premium volume the year before
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    • Calculation   Premiums actual year / premiums last year * 100
  177. PRESENT VALUE
    • Definition   The current value of a future cash flow or series of cash flows discounted at an appropriate interest rate or rates.
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    • Calculation   Discounted Future Cash Flows
  178. PROFIT PER FULL-TIME EQUIVALENT EMPLOYEE
    • Definition   This is Revenue minus Expense, divided by total FTEs. The Profit Factor represents an average pre-tax profit per employee which is another way of viewing employee productivity. It indicates how much profit an organization makes from an average employee. This measure is largely industry driven and thus comparisons should be within a specific industry.
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    • Calculation   Net Profit/Headcount FTE
  179. PROFITABILITY INDEX
    • Definition   The present value of the future cash flows divided by the initial investment. Also called the benefit-cost ratio.
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    • Calculation   Discounted Value Of The Future Cash Flows/Initial Investment
  180. PROJECT PROFIT MARGIN
    • Definition   Contribution Margin of projects.
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    • Calculation   [Project Revenue - Project Costs] / Project Revenue * 100
  181. ROI
    • Definition   For a given use of money in an enterprise, the ROI (return on investment) is how much &quot;return,&quot; usually profit or cost saving, results. Income = Operating Profit, EBIT, NOPAT, Net Income; Capital = Total Assets, Total Assets less current liabilities, Stockholders' Equity, Operating Assets, Net Assets.
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    • Calculation   Income / Capital * 100
    • Definition   The amount of profit (return) based on the amount of resources (funds) used to produce it
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    • Calculation   #profit (return)/#resources (funds)
  182. RATE OF OPERATING RETURN ON CAPITAL
    • Definition   This rate is determined by multiplying the Capital-Employed-Ratio by Operating Income To Sales Ratio.
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    • Calculation   Operating Income / [Capital - Noncurrent Assets] * 100
  183. RATE OF RETURN ON CAPITAL
    • Definition   This rate is determined by multiplying the Capital-Employed-Ratio by Profitability.
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    • Calculation   Net Income / [Capital - Noncurrent Assets] * 100
  184. RATIO OF SALARY TO PROFIT
    • Definition   This ratio is cost of Total Salary divided by Net Profit. It is one measure of cost-effective management. An important point is to retain Salary levels as a major item in the HR reports to management. Highlighting developing trends makes management aware that HR are concerned with the organization's profitability and are monitoring key HR areas that impact on it.
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    • Calculation   (Salary/Net Profit)*100
  185. RATIO OF SALARY TO REVENUE
    • Definition   The Salary Revenue Factor is calculated by dividing the cost of Total Salary by Revenue. The Salary Factor measures how much was paid to employees versus how much revenues were generated. Over time this may indicate whether your organization is obtaining more or less return on its dollar investment in people. The key is to have revenues rising faster than Salary. It is the role of human resources to provide leadership in structuring pay as an incentive to improve performance as well as structuring the workforce levels relative to the revenue base of the organization.
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    • Calculation   (Salary/Revenue)*100
  186. RECEIVABLES TO SALES RATIO
    • Definition   The Receivables To Sales Ratio is calculated by dividing the average Receivables by Sales for a given period. If reflects the average age or level of customer accounts outstanding for the period. The quarterly Receivables should be compared with the annualized Sales amounts to avoid influences of the market fluctuation.
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    • Calculation   Average Receivables/Sales * 10
  187. RESIDUAL INCOME
    • Definition   The Residual Income is defined as the Income minus Capital Charge (Capital times Weighted Average Cost of Capital WACC).Income = Operating Profit, EBIT, NOPAT, Net Income.
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    • Calculation   Income - [Capital * WACC]
  188. RETAINED EARNINGS
    • Definition   Accumulated earnings of a corporation since inception less dividends.
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    • Calculation   Retained Earnings
  189. RETAINED EARNINGS TO CAPITAL RATIO
    • Definition   The ratio compares the Retained Earnings to Stockholder's Equity. High percentages mean that management is generating profitability through its efforts, not relying on heavy capitalization.
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    • Calculation   Retained Earnings/Stockholder's Equity * 100
  190. RETURN ON ASSETS
    • Definition   This ratio is an indicator of profitability. It is determined by dividing NOPAT for the past 12 months by total average assets. Result is shown as a percentage. ROA can be decomposed into return on sales (NOPAT/sales) multiplied by asset utilization (sales/assets).
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    • Calculation   NOPAT / Total Assets * 100
  191. RETURN ON CAPITAL EMPLOYED
    • Definition   The Return On Capital Employed is probably the most popular ratio for measuring general management performance in relation to the capital invested. It is calculated as NOPAT (Net Operating Profit After Taxes) divided by Capital Employed.
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    • Calculation   NOPAT/Capital Employed * 100
  192. RETURN ON EQUITY
    • Definition   The Return On Equity ratio is an indicator of profitability. it is determined by dividing net income for the past 12 months by common stockholder equity (adjusted for stock splits). Result is shown as a percentage. Investors use ROE as a measure of how a company is using its money. ROE may be decomposed into return on assets (ROA) multiplied by financial leverage (total assets/total equity).
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    • Calculation   Net Income/Common Stockholder Equity * 100
  193. RETURN ON NET ASSETS
    • Definition   The Return On Net Assets is a financial measure especially used at the business unit level. It is equal to NOPAT divided by Net Assets (Total Assets less Current Liabilities).
    •  
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    • Calculation   NOPAT / Net Assets * 100
  194. RETURN ON OPERATING ASSETS
    • Definition   This ratio is an indicator of profitability. It is determined by dividing Operating Profit for the past 12 months by Operating Assets.
    •  
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    • Calculation   Operating Profit / Operating Assets * 100
  195. RETURN ON SALES
    • Definition   The Return On Sales ratio measures the profit after taxes on the year's sales. The higher the ratio the better prepared the business is to handle downturns. It is also known as Profitability.
    •  
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    • Calculation   Net Income/Sales * 100
  196. REVENUE
    • Definition   Revenue is an increase in the assets of an organization or decrease in liabilities during an accounting period, primarily from the organization's operating activities. This may include sales of products, rendering of services, and earnings from interest, dividends, lease income, and royalties.
    •  
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    • Calculation   Revenue
  197. REVENUE PER FULL-TIME EQUIVALENT EMPLOYEE
    • Definition   The Revenue Factor is equal to Revenue divided by Total Fulltime Equivalent Employees. It provides the dollar revenue generated per employee and is a macro measure of employee productivity. Revenue per employee is used as a basic financial indicator and is useful to determine and set revenue growth targets. Revenue Factor is only applicable to comparisons within an industry since it varies greatly between different industry groups, particularly given different levels of capital investment.
    •  
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    • Calculation   Revenue/Headcount FTE
  198. REVENUE PER DAY
    • Definition   Calculates the average revenue of a guest stay on a daily basis.
    •  
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    • Calculation   Total revenue / Total number of days
  199. REVENUE PER PASSENGER
    • Definition   Revenue per passenger is calculated on the base of the existing bookings.
    •  
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    • Calculation   Revenue per Booking / Passenger-Count-Booking
  200. REVENUE PER STAY
    • Definition   Calculates the average revenue of a guest stay.
    •  
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    • Calculation   Total revenue / number of stays
  201. SALARY AS A PERCENT OF EXPENSE
    • Definition   This ratio is cost of Total Salary divided by Total Operating Expense. It is a measure which needs to be interpreted with great care since any changes to the operating expenses will naturally change the results. It is therefore important to interpret this factor in relation to trends over time within an industry.
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    • Calculation   (Salary/Expense)*100
  202. SALES
    • Definition   Sales is Total Sales less allowances for return and bad debt.
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    • Calculation   Total Sales - [Returns + Bad Debt]
  203. SALES VS YEAR AGO
    • Definition   Compare Sales vs. Sales a year ago expressed as a percentage.
    •  
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    • Calculation   Sales this year / Sales previous year * 100
  204. SAVINGS FROM USE OF EMPLOYEE SELF SERVICE
    • Definition   Savings from use of a Employee Self Service (ESS) system (lower transaction volume through HR).
    •  
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    • Calculation   All costs reduction according to the use of an ESS system
  205. SCHEDULED PERFORMANCE INDEX (SPI)
    • Definition   Budget cost of work performed divided by Budget cost of work scheduled
    •  
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    • Calculation   Budget cost of work performed / Budget cost of work scheduled * 100
  206. SELLING EXPENSES
    • Definition   Cost incurred to sell (e.g. advertising, salesperson commission) or distribute merchandise.
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    • Calculation   Selling Expenses
  207. SELLING EXPENSES TO SALES RATIO
    • Definition   The analysis of the ratio enables management to assess trends in the relationship between Selling Expenses and Sales. The ratio also establishes expense limitations and controls and is a guideline for planning a realistic selling expense budget.
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    • Calculation   Selling Expenses/Sales * 100
  208. SELLING G&A PER DIRECT LABOR HOUR RATE
    • Definition   The sum of Selling, General And Administrative Expenses divided by the total number of Direct Labor Hours performed within the period. If a combined G&A and selling expense &quot;rate&quot; can be historically validated, it can express what these expenses &quot;should&quot; be as a dollar rate per direct labor hour.
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    • Calculation   (Selling Expenses, G&A Expenses)/Direct Labor Hours
  209. SELLING G&A TO DIRECT LABOR COSTS RATIO
    • Definition   The sum of Selling, General And Administrative Expenses divided by the total Direct Labor Costs spent within a period. If the ratio can be accepted as a guideline, it enables the sales manager to insert an estimated dollar figure in expense projections.
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    • Calculation   (Selling Expenses, G&A Expenses)/Direct Labor Costs * 100
  210. SELLING G&A TO GROSS PROFIT RATIO
    • Definition   The sum of Selling, General, and Administrative Costs (G&A) is divided by the company's Gross Profit for the period. If the ratio proves valid over time, it can be applied to the profit for preliminary values until current or better data is available.
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    • Calculation   (Selling Expenses + G&A Expenses)/Gross Profit * 100
  211. SELLING G&A TO NET INCOME RATIO
    • Definition   The sum of Selling, General, and Administrative Costs (G&A) is divided by the company's Net Income for the period.
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    • Calculation   (Selling Expenses + G&A Expenses)/Net Income * 100
  212. SELLING G&A TO SALES RATIO
    • Definition   The sum of Selling, General, and Administrative Costs (G&A) is divided by the company's Sales for the period.
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    • Calculation   (Selling Expenses + G&A Expenses)/Sales * 100
  213. SELLING PRICE CALCULATION TIME
    • Definition   Time required to provide the customer with the price information
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    • Calculation   Time between inquiry intake and availability of price information
  214. SETTLED REINSTATEMENT PREMIUM IN RELATION TO THE TOTAL PREMIUM
    • Definition   Often the reinsurer does not charge a reinstatement premium. Automatic support allows to fill up a used reisurance contract
    •  
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    • Calculation   Reinstatement premium / total premium * 100
  215. SHORT TERM DEBT
    • Definition   Short Term Debt represents the amount of borrowings (principal and interest) that must be paid in the near future (usually within one year).
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    • Calculation   Short Term Debt
  216. STOCKHOLDERS' EQUITY
    • Definition   Stockholders' Equity is the difference between the value of a company's Assets and the total of its Liabilities. Capital represents the ownership interest of investors. It is also known as Net Worth, Shareholders' Equity or Owners' Equity.
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    • Calculation   Total Assets - Total Liabilities
  217. TIMES INTEREST EARNED RATIO
    • Definition   This ratio focuses on the number of times interest is covered by operating profits. The higher the ratio, the better the organization is able to meet its interest payments. Interest Expense refers to all expenses for interest.
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    • Calculation   Operating Income / Interest Expense * 100
  218. TIMES PREFERRED DIVIDEND RATIO
    • Definition   The ratio compares Net Income with its Preferred Dividend. Dividends may have a great effect on Earnings Per Share. For preferred shareholders, the Times-Preferred-Dividend-Ratio is a direct indication of how adequately the paying corporation can meet this obligation.
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    • Calculation   Net Income/Preferred Dividend * 100
  219. TOTAL ASSETS
    • Definition   The sum of Total Current Assets and Total Noncurrent Assets.
    •  
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    • Calculation   Total Current Assets + Total Noncurrent Assets
  220. TOTAL ASSETS TURNOVER RATIO
    • Definition   The Total Asset turnover compares a company's Sales to its Total Assets. It is usually expressed as a multiple. This ratio gauges how well an organization makes use of its Total Assets. The higher the multiple, the more efficient the company. With a Sales forecast, the organization can project its Total Assets position.
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    • Calculation   Sales/Total Assets * 100
  221. TOTAL COST PER UNIT
    • Definition   Along with Direct Cost per product unit, indirect costs per product provide projections of Total Cost and Operating Income. They can also be used in pricing and customer quotations.
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    • Calculation   Indirect Cost Per Unit + Direct Cost Per Unit
  222. TOTAL COSTS
    • Definition   All cost (direct and indirect) in the company during a period.
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    • Calculation   Direct Costs + Indirect Costs
  223. TOTAL DEBT
    • Definition   The sum of Long Term Debt and Short Term Debt.
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    • Calculation   Long Term Debt + Short Term Debt
  224. TOTAL IT COSTS
    • Definition   Total information technology costs including labor, hardware, software, network and communications, services, supplies, user training and other direct costs
    •  
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    • Calculation   Total Information Technology Costs
  225. TOTAL IT COSTS AS A % OF REVENUE
    • Definition   Total IT costs expressed as a percentage of revenue
    •  
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    • Calculation   Total IT Costs / Revenue * 100
  226. TOTAL OVERHEAD TO COST OF GOODS SOLD RATIO
    • Definition   This ratio weighs Overhead against the Cost of Goods Sold. Along with direct Labor, Direct Material, and Other Direct Costs, Overhead is an important element in the composition of Cost of Goods Sold. Variances from one period to the next can be the occasion for follow-up action.
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    • Calculation   Overhead/Cost of Goods Sold * 100
  227. TOTAL COSTS OF A CLINICAL TRIAL
    • Definition   Documentation of the To Be- and the As is-costs by type of costs
    •  
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    • Calculation   Sum of costs of processes involved in the clinical trial
  228. TOTAL DOLLARS IN UNBILLED STATUS
    • Definition   Unbilled revenue per grid:  - More than 3 months  - More than 6 months  - More than 12 months
    •  
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    • Calculation   Total amount unbilled by grid
  229. TRADING P&L
    • Definition   Profit and loss associated with trading activities
  230. VALUE ADDED EMPLOYEE PRODUCTIVITY
    • Definition   Value added per employee is calculated as total product revenue less total material purchases ÷ total employment (in full-time equivalents).
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    • Calculation   [Total product revenue - Total material purchases] / Headcount FTE
  231. VALUE PER ORDER ITEM
    • Definition   The net value of incoming orders expressed as a percentage of numbers of order items
    •  
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    • Calculation   Net value of incoming orders / Number of order items
  232. VARIABLE COSTS
    • Definition   A unit cost which depends on total volume.
    •  
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    • Calculation   Variable Cost
  233. WEIGHT OF DEBT
    • Definition   This measure is obtained by dividing the cumulated value of debt by the cumulated value of debt plus value of equity for the entire sector.
    •  
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    • Calculation   Debt/[Debt + Equity]
  234. WEIGHT OF EQUITY
    • Definition   This measures is obtained by dividing equity by the cumulated value of debt plus value of equity for the entire sector.
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    • Calculation   Equity/[Equity + Debt]
  235. WEIGHTED AVERAGE COST OF CAPITAL
    • Definition   The sum of the implied or required market returns of each component of a corporate capitalization, weighted by that component's share of the total capitalization.
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    • Calculation   WACC = WACC Equity + WACC Debt; WACC Equity = Cost of Equity * (1- Gearing); Gearing = Debt / (Market Cap. + Debt); WACC Debt = Cost of Debt * Gearing; Cost of Equity = Risk free Investment + Company Risk Premium; Company Risk Premium = Market Risk Premium * Beta Factor; Cost of Debt = Interest rate * (1 - tax rate)
  236. WORKING CAPITAL
    • Definition   Working Capital, sometimes known as Net Working Capital or Net Current Assets, is equal to the difference between Current Assets and Current Liabilities. The more Working Capital a company has, the greater is its liquidity.
    •  
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    • Calculation   Current Assets - Current Liabilities
  237. WORKING CAPITAL TO LONG TERM DEBT RATIO
    • Definition   To compute this ratio, average Working Capital is divided by the average value of Long Term Debt. This ratio answers the question as to whether an organization can liquidate its Long Term Debt from Working Capital. If the ratio is greater than 100%, the answer is yes; if less that 100%, no.
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    • Calculation   Working Capital/Long Term Debt * 100
  238. WORKING CAPITAL TURNOVER
    • Definition   Working Capital Turnover is a ratio of Sales to average Working Capital. It indicates how well management is using Working Capital to generate revenues - how many &quot;times&quot; it is turning capital over into sales revenues.
    •  
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    • Calculation   Sales/Working Capital * 100
  239. WRITE-OFF QUOTE
    • Definition   &quot;Amount written off / total amount by period.  Dunning or additional charges are not taken into account The period either belongs to the due date or the original posting date.&quot; 
    •  
    •  
    • Calculation   Amount written off / total amount by period. 
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Financial Key Performance Indicators

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