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(What they are and how to measure). Decisions Communication Comparison Priorities.

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Presentation on theme: "(What they are and how to measure). Decisions Communication Comparison Priorities."— Presentation transcript:

1 (What they are and how to measure)


3 Decisions Communication Comparison Priorities

4 Personnel Performance Management Public Company Stock Market Departments

5 Usage Predictive Forecasting


7 Management Other Companies IT Staff

8 Who should determine the appropriate KPI’s for a company?

9 Where to get KPIs Developed Given Participation Discovery Commitment Belief Full Adoption Longevity Quick Pre-defined IT can manage Save time and effort Some Adoption Short lived

10 Stakeholders Employees

11 Cash Flow Indicators Debt Asset Management Market Value

12 Asset Coverage Ratio Capitalization Ratio Debt Service Coverage Ratio DEBT Debt Ratio Debt-to- Equity Ratio

13 Debt-to- Income Ratio Debt/EBITDA Ratio Financial Leverage DEBT Equity Multiplier Fixed Assets to Net Worth

14 Fixed Charge Coverage Ratio Interest Coverage Ratio (ICR) DEBT Long Term Debt to Capitalization Ratio

15 Acid-Test Ratio Cash Ratio Net Working Capital LIQUIDITY Current Ratio Quick Ratio

16 Working Capital Working Capital Ratio LIQUIDITY

17 Cash Return on Capital Invested (CROCI) DuPont Formula EBIT (Earnings Before Interest and Taxes) FINANCIAL Earnings Before Interest After Taxes (EBIAT) EBITDA

18 EBITDARM EBT (Earnings Before Tax) Gross Profit Margin FINANCIAL Effective Rate of Return Net Profit Margin

19 NOPLAT (Net Operating Profit Less Adjusted Taxes) OIBDA Operating Margin FINANCIAL Operating Expense Ratio Overhead Ratio

20 Profit Analysis Profitability Index Return On Assets (ROA) FINANCIAL Relative Return Return on Average Assets (ROAA)

21 Return on Average Capital Employed (ROACE) Return on Average Equity (ROAE) Return on Debt (ROD) FINANCIAL Return On Capital Employed (ROCE) Return On Equity (ROE)

22 Return On Invested Capital (ROIC) Return on Investment (ROI) Return on Research Capital (RORC) FINANCIAL Return on Net Assets (RONA) Return on Retained Earnings (RORE)

23 Return on Revenue (ROR) Return On Sales (ROS) FINANCIAL Revenue per Employee

24 Accounts Payable Turnover Ratio Asset Turnover Days Payable Outstanding (DPO) ASSET MANAGEMENT Cash Conversion Cycle (Operating Cycle) Days Sales Outstanding (DSO)

25 Defensive Interval Ratio (DIR) Fixed Asset Turnover Receivable Turnover Ratio ASSET MANAGEMENT Inventory Turnover

26 Cash Flow Coverage Ratio Cash Flow Management Free Cash Flows / Operating Cash Flows Ratio CASH FLOW INDICATOR Cash Flow Return on Investment (CFROI) Price / Cash Flow Ratio

27 Business Valuation Dividend Payout Ratio Dividend Yield MARKET VALUE Dividend Policy Ratios Enterprise Value (EV)

28 Enterprise Value Multiple EV/EBITDA ratio Loan-to-Value Ratio (LTV) MARKET VALUE Gordon Growth Model Net Asset Value per Share (NAVPS)

29 PEG ratio Price to Earnings Ratio (P/E Ratio) Price/Book Value Ratio MARKET VALUE Price-to- Research Ratio

30 Pick the right ones for your business

31 Gartner /EBRC KPI Initiative AICPA KPMG, Deloitte, PWC




35 All are valid… Narrow the focus… 3 are important From Sales to Professional Services Approximately 30 Measures Found

36 Top 3 Take-Aways

37 questions? final thoughts?

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