Imagine this: you are the CFO of a company and you come in every morning and want to see something happen. You open up your computer and what do you see? We asked the executive teams at all of our different partners about KPI reporting to understand what key KPIs they’re looking for on their dashboard. Here were some of their top answers!
Operating Cash Flow. A measure of the amount of money generated by your regular business operations is a vital KPI to watch. In order to gauge how much money is flowing into and out of your company and how much is left over after you pay all of your bills, operating cash flow is a priority for KPI reporting. Additionally, when measuring operating cash flow, make sure to compare it to your Total Capital Employed to determine if there will be enough cash to support all operational and capital expenditures.
Current Ratio KPI. Not only is it important to know how much money is left over, it is important to understand if that money will be enough to cover current debts. To find your current ratio KPI, you divide your current assets by your current liabilities. The ideal ratio is between 1.5 and 3 – this will indicate that your business is performing well financially. A ratio under 1 means that the chances of paying all debts at once would be unlikely.
Total Revenue per Finance Employee. Total revenue management is unlikely if you don’t know how many employees you need to process the amount of money that flows through your company. You reach this by taking the total revenue generated by your organization over a certain period of time and dividing it by the total number of finance employees.
Net Profit. Of course this made the list – your operating cash flow, current ratio KPI and total revenue per finance employee don’t really matter if you don’t know what your bottom line is. While it is often the most frustrating for CFOs, a KPI reporting metric that can often become an obsession, it is critical, especially when investors are involved.
These four KPI reporting metrics typically work in tandem. As the top 4 KPIs to measure, together they provide a very good overview and outlook of your company’s financial health.
When it comes to KPI reporting, be sure you have your finger on the button. Keeping these four KPIs on your dashboard makes that easy. True Sky can help. Find out more by visiting www.truesky.com.