Financial Key Performance Indicators

Financial Key Performance Indicators (KPI)

% 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. Calculation # of invoiced billing docs / # of expected billing docs

Accounts Payable Turnover Ratio Definition This ratio indicates the number of times the Accounts Payable "turned over" - that is, were paid - in a period. Calculation Period Purchases/Accounts Payable, Ending Balance

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. Calculation [Quick Assets/Current Liabilities] * 100

Administration Costs Reductions Definition Administration costs reductions by automating transactions (reduction in redundant data entry) Calculation All costs reduction according to the use of an automating system

Age structure of open items Definition % of open items (value) that are overdue for more than 30 days, 60 days, 90 days. Calculation Sum of overdue open items (debits) by grid (query date - due date)

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. Calculation Sales/Average Inventory

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. Calculation Total Assets/[Long Term Debt + Total Equity] * 100

Available Liquidity Definition Funds available within a certain maturity band

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. Calculation Average Receivables/Sales * 365

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'. Calculation Total annual stock value / Number of days

Average Receivables Definition The Average Receivables is the sum of the beginning and the closing balance for a period divided by two. Calculation [Beginning Receivables + End Of Period Receivables]/2

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. Calculation [Beginning Working Capital + End Working Capital]/2

Average cost per incident Definition Total costs of incident handling (service desk in total, sales & marketing partly, other involved departments partly) / Number of incidents 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

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 "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)"

Average payment period for materials Definition This ratio indicates the number of times the Accounts Payable "turned over" - that is, were paid - in a period. Calculation Period Purchases/Accounts Payable, Ending Balance

Average payments per day Definition "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" Calculation Sum [Amount per payment x # of days per payment] / (# of days in total x # of payments)

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. Calculation Invoiced amount for each group of rates / total kWh invoiced within this rate group

Billing errors by reason Definition Finding the reasons why accounts are not billed, such as: - No meter reading or not plausible - Blocked contract - Outsorted Calculation # of billing errors by reason

Borrowed Capital To Equity Ratio Definition This ratio compares the Borrowed Capital to all owner's Equity - Common Stock, Preferred Stock, Retained Earnings, etc. Calculation Borrowed Capital/Equity

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. Calculation Fixed Costs/[1 - Variable Costs/Sales]

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. Calculation Total Assets - Total Liabilities

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. Calculation Sales/[Capital - Noncurrent Assets] * 100

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. Calculation Capital Stock

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. Calculation Common Stock/Capital * 100

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. Calculation Long Term Debt/Capital * 100

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. Calculation Preferred Stock/Capital * 100

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. Calculation Capital/Noncurrent Assets * 100

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. Calculation Capital/Total Liabilities * 100

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 Calculation Earnings Before Depreciation, Amortization, And Non Cash Charges

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. Calculation Gross Cash Flow/Gross Investment

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. Calculation Cash Flow / Headcount FTE

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. Calculation [Cash + Marketable Securities]/Current Liabilities * 100

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. Calculation Cash Receipts/Ending Receivables * 100

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. Calculation Sales/Cash

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. Calculation Cash / Sales * 100

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. Calculation Inventory days of supply + Days sales outstanding - Average payment period for materials

Channel Obsolescence Costs Definition Aging allowances paid to channel partners, provisions for buy-back agreements Calculation All costs related to channel obsolescence

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. Calculation All costs related to channel obsolescence / Inventory Carrying Costs * 100

Chargeback and Rebate Liabilities as a percentage of sales Definition Amount paid in Rebates and Chargebacks compared to the gross sales revenue Calculation (Amount of yearly paid rebates + amount of yearly paid chargebacks) / total sales revenue

Combined Ratio Definition A measure of the relationship between money spent for claims and expenses and premiums taken in Calculation claims + expenses / premiums

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. Calculation Common Stock

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. Calculation Capital/Common Stock

Company Growth vs. Market Growth Definition The company growth, based on the annual increase of Revenue, compared to the growth of the competitors. Calculation [Company growth - Market growth] / Market growth * 100

Contribution Margin Rate Definition Contribution Margin as a percentage of Sales Calculation (Sales – Cost of Goods Sold) / Sales

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. Calculation (Actual Cost - Initial Cost Estimate) / Actual Cost * 100

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. Calculation (Weight Of Debt * Costs of Debt) + (Weight Of Equity * Cost of Equity)

Cost Of Debt Definition The Cost Of Debt is the interest charged by a company's lender. Calculation Average Interest Rate * Average Debt

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. Calculation Direct Labor Costs/Cost of Goods Sold * 100

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. Calculation Direct Labor Costs/Sales * 100

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. Calculation Risk free Investment + (Market Risk Premium * Beta Factor)

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. Calculation Cost Of Labor/Sales * 100

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. Calculation (Cost Of Material + other Direct Costs)/Sales * 100

Cost Performance Index (CPI) Definition Budgeted cost of work performed divided by actual cost of work scheduled Calculation Budget cost of work performed / Actual cost of work scheduled * 100

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. Calculation Cost of Goods Sold

Cost of Goods Sold Per Direct Labor Hour Ratio Definition The ratio compares the Cost of Goods Sold to the Direct Labor Hours. Calculation Cost of Goods Sold/Direct Labor Hours

Cost of Goods Sold Per Unit Sold Definition This ratio compares the total Cost of Goods Sold to Units sold. Calculation Cost of Goods Sold/Units Sold

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. Calculation Cost of Goods Sold/Sales * 100

Cost ratio Definition Sum of all costs in comparison to gross premiums Calculation costs / gross premiums * 100

Costs of every submission Definition Time and efforts to adjust content and respond to enhancements Calculation Sum of costs of processes involved in the submission scenario

Costs of stability testing in percentage of the whole pharmaceutical development process Definition Measuring the own cost structure per product group against industry standards Calculation Costs of stability testing per product group / Total costs of whole pharmaceutical development process per product group * 100

Credit Portfolio Diversification Definition Origination of loans to different obligors/industry segments/countries in order to reduce overall risk

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. Calculation [Current Period Billings + Prior Period Billings]/Current Costs

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. Calculation Cash and Equivalents + Receivables + Inventories + Other Current Assets

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. Calculation Average Current Assets/Average Working Capital

Current Costs Definition Price of replacing an asset identical to an existing one. Calculation Current Costs

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. Calculation Accounts Payable + Short-Term Debt + Other Current Liabilities

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. Calculation Average Current Liabilities/Average Working Capital

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. Calculation Current Assets/Current Liabilities

Cycle Time: Declaration to Invoice

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. Calculation [Backlog / Sales]*Days In Period

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. Calculation [Disbursements/Period Purchases]*Days In Period

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. Calculation [Accounts Payable, ending balance/Period Purchases]*Days In Period

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. Calculation [Trades Payable/Period Purchases]*Days In Period

Days Sales Outstanding Definition The outstandings of a company expressed in their daily Sales Calculation Average Receivable / [Sales / 365]

Development costs for new/changed packaging variant Definition All costs involved in the developement process for one new package form. Calculation Sum of all costs deriving from the development for new/ changed packaging variant

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. Calculation Individual Direct Cost/Cost of Goods Sold * 100

Direct Costs Definition Expenses that can be directly identified with the costing object such as a product and department. Calculation Direct Costs

Direct Labor Costs Definition Costs for Direct Labor Hours. Calculation Direct Labor Costs

Direct Labor Hours Definition Hours of work directly involved in making a product. Calculation Direct Labor Hours

Disbursements Definition Payment by cash or by check. Calculation Disbursements

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. Calculation Disbursements/Accounts Payable

Dunning Quota Definition Number of receivables that are dunned in comparison to the total number of receivables Calculation #dunnes receivables / #receivables * 100

Dunning amount Definition Total amount to be requested. Average, maximum, and minimum. Calculation Debits in dunning

Dunning efficiency Definition Paid amounts after they have been dunned. Drill-down to dunning procedure. Calculation Amount paid after dunning (dunning status set)

DUNNING RATE Definition Percentage of annual turnover involved in dunning. Calculation Debits in dunning / total debit amount

EARNINGS BEFORE DEPRECIATION, INTEREST, AND TAX Definition This measure of cash flow is equal to pretax income and interest expense and depreciation. Calculation Sales - COGS - Operating Costs [excluding Depreciation]

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. Calculation Sales - COGS - Operating Costs - other gains & losses

EARNINGS BEFORE INTEREST TAX DEPRECIATION AMORTIZATION Definition Estimated by adding depreciation and amortization back to operating income (EBIT). Calculation Sales - COGS - Operating Costs [excluding Depreciation & Amortization]

EARNINGS BEFORE TAXES Definition A measure of a company's earning power from ongoing operations, equal to earnings before deduction income taxes. Calculation Sales - COGS - Operating Costs - other gains & losses - Interest

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 "added value". If there is "added value" 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. Calculation NOPAT - [WACC * Capital]

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 "added value". If there is "added value" 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. Calculation Capital * [[NOPAT/Capital] - Cost Of Capital]

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 "added value". If there is "added value" 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. Calculation NOPAT - [WACC * Capital]

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 "added value". If there is "added value" 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. Calculation Capital * [[NOPAT/Capital] - Cost Of Capital]

EQUITY Definition Total Equity equals Preferred Stock Equity + Common Stock Equity. Calculation Preferred Stock Equity + Common Stock Equity.

EXPECTED LOSS Definition Average future loss expected for a credit portfolio with risky items

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. Calculation (Expenses/Headcount FTE)*100

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. 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

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. Calculation Sales/Fixed Assets * 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. Calculation Fixed Assets

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. Calculation Fixed Assets/Long Term Debt * 100

FIXED ASSETS TO STOCKHOLDERS' EQUITY RATIO Definition This ratio indicates the percentage of an organization's Fixed Assets that are financed by Stockholders. Calculation Fixed Assets/Stockholders' Equity * 100

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. Calculation Fixed Assets/Total Assets * 100

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. Calculation Fixed Costs

FIXED COSTS PER UNIT Definition Fixed Costs Per Unit equals Total Fixed Costs for the period divided by units produced in the period. Calculation Fixed Costs / Units Produced

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. Calculation NOPAT - Necessary Investments

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. Calculation [Long Term Debt + Stockholders' Equity]/Fixed Assets * 100

GENERAL AND ADMINISTRATIVE EXPENSES Definition All expenses incurred in connection with performing general and administrative activities. Examples are executives' salaries and legal expenses. Calculation General and Administrative Expenses

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. Calculation Sales - Cost of Goods Sold

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. Calculation Gross Profit/Sales * 100

HR SERVICE COST PER EMPLOYEE Definition The cost for HR service per employee per year Calculation Average cost per HR transaction * Average number of transactions

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. Calculation Indirect Costs

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. Calculation Indirect Expenses/Units Produce

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. Calculation G&A Expenses + Selling Expenses + other Indirect Costs

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. Calculation Indirect Costs/CoGS * 100

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. Calculation Individual Overhead /Total Overhead * 100

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 Calculation Average Debt * Corporate Average Borrowing Rate

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. Calculation Interest Paid/Borrowed Capital * 100

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. Calculation 0 = -[Net Present Value] + Sum [ Cash Flow[t] / [[1+IRR]^t] ]

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). Calculation Avg. Inventory/Avg. Working Capital * 100

INVESTMENT INCOME/INTEREST RATE Definition The portion of a company´s income which is derived from its loans, including interest

INVESTMENT TURNOVER Definition Return earned on capital invested in a business. A higher ratio indicates good use of the funds placed into the business. Calculation Sales / [Stockholders' Equity + Long Term Liabilities] * 100

INVESTMENT INCOME Definition The portion of a company's income which is derived from its investments, including interest and dividends on stocks and bonds Calculation investment income / income * 100

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 Calculation investmet income / invested capital * 100

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. Calculation [# of reversed invoices during period A] x 100 / [Total # of invoices during period A

ISSUED STOCK Definition Authorized shares that have been issued for cash, services, or other property. Calculation Issued Stock

Liabilities Definition Amount payable in dollars or future services to be rendered (e.g. warranties payable). Calculation Total Current Liabilities + Total Noncurrent Liabilities

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. Calculation Liabilities/Capital * 100

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 "covered". Calculation Liabilities/Equity * 100

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. Calculation Liabilities / Total Assets * 100

LOAN MARGINS Definition Expressed as percentage points; the amount that a lender adds to an index to arrive at the final interest rate

LONG TERM DEBT Definition Long Term Debt represents the amount of borrowings due more than one year from the date of the balance sheet. Calculation Long Term Debt

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 Calculation claims / premiums * 100

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. Calculation (Machine Related Expenses + Heating, Light, Plant + Overhead)/Annual Machine Hours

MARKET PORTFOLIO DIVERSIFICATION Definition Investment in different securities/financial instruments/countries in order to reduce overall risk by taking the underlying correlations into account

MARKET SHARE Definition A company revenue divided by all the revenue of competitors within the same market. Calculation Companies Revenue / Total Category Revenue * 100

MARKET SHARE INDEX Definition The regional market share expressed as a percentage of the national market share. Calculation Regional market share / National market share *100

MARKET SUCCESS FACTOR Definition Profitability as Net Income divided by Revenue. Calculation Profitability * Market share Index

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.

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. Calculation Material And Other Direct Costs/Cost of Goods Sold * 100

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). Calculation Retained Earnings - Non operational gain + Non operational losses + interest expenses after ta

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). Calculation Sales- COGS - Operating Expenses - Tax

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 "Net" because Liabilities are deducted. Calculation Stockholders' Equity/Number of Common Stock

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. Calculation Revenue - [All Expenses + Tax]

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. Calculation [Operating Income + Nonoperating Income] - All expenses, including interest expense

NET INCOME BEFORE TAXES TO SALES RATIO Definition This ratio is an organization's Net Income Before Taxes divided by Sales. Calculation Net Income Before Taxes / Sales * 100

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). Calculation Net Income/Stockholders' Equity * 100

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). Calculation [Net Income - Preferred Dividends]/[Stockholders' Equity - Preferred Stock Par Value] * 10

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. Calculation Net Income/Equity * 100

NET OPERATING PROFIT LESS ADJUSTED TAXES Definition The Net Operating Profit After Tax is equal to Sales minus Operating Expenses and Taxes (NOPAT). Calculation Sales - Operating Expenses - Operating Taxe

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. Calculation (Net Profit/Salary)*100

NEW BUSINESS QUOTA Definition The value of new business during a year in comparison to the in-force at the beginning of the year Calculation Premiums new business / premiums in-force * 100

NONCURRENT ASSETS Definition Noncurrent Assets is the total amount of assets that have a life in excess of one year and more. Calculation Noncurrent Assets

NONOPERATING EXPENSES Definition Nonoperating Expenses is the combination of "Other Taxes" and "Interest Expense." "Other Taxes," 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. "Interest Expense" is all fixed interest expenses net of capitalized interest. This category also includes dividends on preferred stock of unconsolidated subsidiaries. Calculation Nonoperating Expenses

NONOPERATING INCOME Definition Income, which is not operational income, e.g. interest (if the company is not a bank). Calculation Nonoperating Income

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. Calculation Number of recalculated conditions / number of all agreed conditions * 10

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. Calculation Sum[ [Cash Flow[i]] * [1/n[i]]]

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. Calculation Earnings Before Depreciation - Taxe

OPERATING EXPENSES Definition The day-to-day expenses incurred in running a business, such as sales and administration, as opposed to production. Calculation Operating Expenses

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). Calculation Sales - [Cost of Goods Sold + G&A Expenses + Selling Expenses]

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. Calculation Operating Income/Sales * 100

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 "so many times" 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. Calculation [Sales - Variable Costs]/Operating Income * 100

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). Calculation (Revenue-Operating Expenses) / Revenue * 100

OUTSTANDING RECEIVABLES QUOTA Definition Outstanding receivbles in comparison to all receivables Calculation outstanding receivables / total receivables * 100

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. Calculation Overhead costs

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. Calculation Overhead/Cost of Goods Sold * 100

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. Calculation Overhead/Direct Labor Hours

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. Calculation Overhead/(Direct Labor Costs + Direct Materials & Other Direct Costs)

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. Calculation Overhead/Sales * 100

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. Calculation (Overhead costs / Total costs) * 100%

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. 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

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. Calculation Number of new customers per year/ Total customers * 100

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). Calculation # of invoices paid in time (<= due date) / all paid invoices

PLANNED REVENUE PER RESERVATION Definition Demonstrates how efficient our reservation planning is at average. Calculation Planned revenue per reservation / planned reservations

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. Calculation Preferred Stock

PREMIUM GROWTH Definition The value of premium volume actual year in comparison to premium volume the year before Calculation Premiums actual year / premiums last year * 100

PRESENT VALUE Definition The current value of a future cash flow or series of cash flows discounted at an appropriate interest rate or rates. Calculation Discounted Future Cash Flows

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. Calculation Net Profit/Headcount FTE

PROFITABILITY INDEX Definition The present value of the future cash flows divided by the initial investment. Also called the benefit-cost ratio. Calculation Discounted Value Of The Future Cash Flows/Initial Investment

PROJECT PROFIT MARGIN Definition Contribution Margin of projects. Calculation [Project Revenue - Project Costs] / Project Revenue * 100

ROI Definition For a given use of money in an enterprise, the ROI (return on investment) is how much "return," 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. Calculation Income / Capital * 100 Definition The amount of profit (return) based on the amount of resources (funds) used to produce it Calculation #profit (return)/#resources (funds)

RATE OF OPERATING RETURN ON CAPITAL Definition This rate is determined by multiplying the Capital-Employed-Ratio by Operating Income To Sales Ratio. Calculation Operating Income / [Capital - Noncurrent Assets] * 100

RATE OF RETURN ON CAPITAL Definition This rate is determined by multiplying the Capital-Employed-Ratio by Profitability. Calculation Net Income / [Capital - Noncurrent Assets] * 100

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. Calculation (Salary/Net Profit)*100

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. Calculation (Salary/Revenue)*100

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. Calculation Average Receivables/Sales * 10

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. Calculation Income - [Capital * WACC]

RETAINED EARNINGS Definition Accumulated earnings of a corporation since inception less dividends. Calculation Retained Earnings

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. Calculation Retained Earnings/Stockholder's Equity * 100

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). Calculation NOPAT / Total Assets * 100

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. Calculation NOPAT/Capital Employed * 100

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). Calculation Net Income/Common Stockholder Equity * 100

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). Calculation NOPAT / Net Assets * 100

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. Calculation Operating Profit / Operating Assets * 100

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. Calculation Net Income/Sales * 100

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. Calculation Revenue

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. Calculation Revenue/Headcount FTE

REVENUE PER DAY Definition Calculates the average revenue of a guest stay on a daily basis. Calculation Total revenue / Total number of days

REVENUE PER PASSENGER Definition Revenue per passenger is calculated on the base of the existing bookings. Calculation Revenue per Booking / Passenger-Count-Booking

REVENUE PER STAY Definition Calculates the average revenue of a guest stay. Calculation Total revenue / number of stays

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. Calculation (Salary/Expense)*100

SALES Definition Sales is Total Sales less allowances for return and bad debt. Calculation Total Sales - [Returns + Bad Debt]

SALES VS YEAR AGO Definition Compare Sales vs. Sales a year ago expressed as a percentage. Calculation Sales this year / Sales previous year * 100

SAVINGS FROM USE OF EMPLOYEE SELF SERVICE Definition Savings from use of a Employee Self Service (ESS) system (lower transaction volume through HR). Calculation All costs reduction according to the use of an ESS system

SCHEDULED PERFORMANCE INDEX (SPI) Definition Budget cost of work performed divided by Budget cost of work scheduled Calculation Budget cost of work performed / Budget cost of work scheduled * 100

SELLING EXPENSES Definition Cost incurred to sell (e.g. advertising, salesperson commission) or distribute merchandise. Calculation Selling Expenses

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. Calculation Selling Expenses/Sales * 100

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 "rate" can be historically validated, it can express what these expenses "should" be as a dollar rate per direct labor hour. Calculation (Selling Expenses, G&A Expenses)/Direct Labor Hours

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. Calculation (Selling Expenses, G&A Expenses)/Direct Labor Costs * 100

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. Calculation (Selling Expenses + G&A Expenses)/Gross Profit * 100

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. Calculation (Selling Expenses + G&A Expenses)/Net Income * 100

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. Calculation (Selling Expenses + G&A Expenses)/Sales * 100

SELLING PRICE CALCULATION TIME Definition Time required to provide the customer with the price information Calculation Time between inquiry intake and availability of price information

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 Calculation Reinstatement premium / total premium * 100

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). Calculation Short Term Debt

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. Calculation Total Assets - Total Liabilities

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. Calculation Operating Income / Interest Expense * 100

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. Calculation Net Income/Preferred Dividend * 100

TOTAL ASSETS Definition The sum of Total Current Assets and Total Noncurrent Assets. Calculation Total Current Assets + Total Noncurrent Assets

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. Calculation Sales/Total Assets * 100

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. Calculation Indirect Cost Per Unit + Direct Cost Per Unit

TOTAL COSTS Definition All cost (direct and indirect) in the company during a period. Calculation Direct Costs + Indirect Costs

TOTAL DEBT Definition The sum of Long Term Debt and Short Term Debt. Calculation Long Term Debt + Short Term Debt

TOTAL IT COSTS Definition Total information technology costs including labor, hardware, software, network and communications, services, supplies, user training and other direct costs Calculation Total Information Technology Costs

TOTAL IT COSTS AS A % OF REVENUE Definition Total IT costs expressed as a percentage of revenue Calculation Total IT Costs / Revenue * 100

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. Calculation Overhead/Cost of Goods Sold * 100

TOTAL COSTS OF A CLINICAL TRIAL Definition Documentation of the To Be- and the As is-costs by type of costs Calculation Sum of costs of processes involved in the clinical trial

TOTAL DOLLARS IN UNBILLED STATUS Definition Unbilled revenue per grid: - More than 3 months - More than 6 months - More than 12 months Calculation Total amount unbilled by grid

TRADING P&L Definition Profit and loss associated with trading activities

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). Calculation [Total product revenue - Total material purchases] / Headcount FTE

VALUE PER ORDER ITEM Definition The net value of incoming orders expressed as a percentage of numbers of order items Calculation Net value of incoming orders / Number of order items

VARIABLE COSTS Definition A unit cost which depends on total volume. Calculation Variable Cost

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. Calculation Debt/[Debt + Equity]

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. Calculation Equity/[Equity + Debt]

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. 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)

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. Calculation Current Assets - Current Liabilities

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. Calculation Working Capital/Long Term Debt * 100

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 "times" it is turning capital over into sales revenues. Calculation Sales/Working Capital * 100

WRITE-OFF QUOTE Definition "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." Calculation Amount written off / total amount by period.

Financial Key Performance Indicators

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