Get to know the essential KPIs for your business
A KPI is a Key Performance Indicator, and have vital importance for companies as they measure process performance and by analyzing collected information it’s possible to work to improve future actions. There are numerous performance indicators in a company and its definition always depends on the area of activity. However, there are transverse factors to all activities and in this article we highlight the 10 most important.
It’s one of the most important values for any company. We’ve reached this amount after adding up the entire billing volume and deducting costs and expenses.
Net Profit Margin
The profit margin represents what the company plans to make in return for what it invested. In addition to calculating net income to obtain the net profit margin, companies must stipulate an amount that is in accordance with what the market is willing to pay for their product. If the expectation of profits is well above normal there may be problems with future planning.
EBITDA means for Earning Before Interest, Taxes Depreciation and Amortization and it’s a way of calculating how much a company generates of resources only with its operation, that is to say, before subtracting the value of the taxes. The formula for achieving EBITDA is Net Operating Income + Depreciation + Amortization. This is a very important value for companies that are looking for investors and serves as a comparative point with other companies in the same industry.
ROI means return on investment and it’s the return on made investment. This value is the result acquired with the investment made.
Market share means the participation of a company in the market in which it’s located. This value can be found through billing measurement, quantity of customers, among others.
Cost Per Lead
This is a value widely used in the digital world, which is gaining importance in the business world. The cost per lead is composed of the sum of the expenses with marketing actions divided by the leads generated through these actions.
Customer Lifetime Value
This metric seeks to define the profit that a company may have. CLV represents the total value obtained with a given customer within a given period and for how long it can still be a customer.
Liquidity is the ability to turn an asset into cash. The faster the conversion is, the more liquid an asset is. This indicator assesses the ability of the company to pay employees and suppliers.
Index of compliance
Controlling accounts is crucial so that the company can balance its accounts payable. This indicator evaluates what the company has to receive and how much of that amount is late or has not been paid.
Employee satisfaction index
It’s very important to analyze the satisfaction status of a company employees. This indicator should identify the main GAPs of management and to guide actions to improve organizational culture.
Knowing the state of the company at every moment is vital for managing the business effectively and objectively. Multipeers enables real-time analysis of the state of the business and provides key metrics for the successful pursuit of objectives.