Do you want to improve your performance in accounting?
Get a handle on your accounting performance with these 10 KPIs:
Get a handle on your accounting performance with these 10 KPIs:
1. Accounts Receivable Turnover
Description: Measures how quickly a company collects outstanding debts from customers.
Formula: Net Credit Sales / Average Accounts Receivable
Description: Measures how quickly a company collects outstanding debts from customers.
Formula: Net Credit Sales / Average Accounts Receivable
2. Accounts Payable Turnover
Description: Measures how quickly a company pays its suppliers
Formula: Total Supplier Purchases / Average Accounts Payable
Description: Measures how quickly a company pays its suppliers
Formula: Total Supplier Purchases / Average Accounts Payable
3. Working Capital Ratio
Description: Measures a company's ability to meet its short-term financial obligations
Formula: Current Assets / Current Liabilities
Description: Measures a company's ability to meet its short-term financial obligations
Formula: Current Assets / Current Liabilities
4. Debt-to-Equity Ratio
Description: Measures the proportion of a company's financing that comes from debt versus equity
Formula: Total Debt / Total Equity
Description: Measures the proportion of a company's financing that comes from debt versus equity
Formula: Total Debt / Total Equity
5. Gross Profit Margin
Description: Measures the percentage of revenue that is left over after deducting the cost of goods sold
Formula: (Revenue - Cost of Goods Sold) / Revenue
Description: Measures the percentage of revenue that is left over after deducting the cost of goods sold
Formula: (Revenue - Cost of Goods Sold) / Revenue
6. Net Profit Margin
Description: Measures the percentage of revenue that is left over after deducting all expenses, including taxes
Formula: Net Income / Revenue
Description: Measures the percentage of revenue that is left over after deducting all expenses, including taxes
Formula: Net Income / Revenue
7. Return on Assets (ROA)
Description: Measures how efficiently a company uses its assets to generate profits
Formula: Net Income / Total Assets
Description: Measures how efficiently a company uses its assets to generate profits
Formula: Net Income / Total Assets
8. Return on Equity (ROE)
Description: Measures how much profit a company generates with the money shareholders have invested
Formula: Net Income / Total Equity
Description: Measures how much profit a company generates with the money shareholders have invested
Formula: Net Income / Total Equity
9. Inventory Turnover
Description: Measures the number of times inventory is sold and replaced during a period
Formula: Cost of Goods Sold / Average Inventory
Description: Measures the number of times inventory is sold and replaced during a period
Formula: Cost of Goods Sold / Average Inventory
10. Fixed Asset Turnover
Description: Measures how effectively a company uses its fixed assets to generate sales
Formula: Revenue / Net Fixed Assets
Description: Measures how effectively a company uses its fixed assets to generate sales
Formula: Revenue / Net Fixed Assets
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