Visualizing Your Financial KPIs

The ultimate purpose of any business is to make money, right? Even if you’re a non-profit, you need to know you’re spending every penny that comes your way in the best, most efficient and productive way you can. This means your financial KPIs are the fundamental driving force of your organization. You need visibility over all aspects of cashflow, profit and loss and other financial considerations, you need them fast, and presented in a clear, easy-to-digest format.

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Which KPIs Should I Choose?

Put simply, you need to know how much money is coming in to the company compared to how much is flowing out of it, as well as how much it’s costing you to make each sale or onboard each new customer. There are various ways to answer these questions, all of which give you a different, nuanced viewpoint. To get you started, we’ll guide you through the following example financial KPIs, explaining why each one is so important, when you would use it and which calculations you would use.

Opex to Sales Ratio

“Opex” stands for “operational expenses”; the Opex-to-Sales ratio stacks up how much it actually costs to run your business against how much you bring in from sales.

Profit and Loss (P&L)

Here, your Profit / Loss is made up of two parts: Gross Profit and Gross Profit Margin. Gross Profit is the amount of money you have left over after you’ve tallied up the cost of goods sold (COGS), or the service that’s been provided, while your Gross Profit Margin is the amount left presented as a percentage of your gross income.

Net Income (Net Profit) & Net Profit Margin

Like gross profit / gross profit margin, your net income (also called net profit) and your net profit margin show you how much is left after you subtract your expenses from your revenue. The difference is that, while gross profit only takes into account direct costs, net income includes all other costs, including interest, taxes, depreciation and so on.

Relative Income per Customer Type

This is an KPI used in Retail Banking to identify which types of customers bring in the most money to the organization. Like revenue per customer, or customer profitability, the idea is to figure out which category of customer is most valuable to the bank.

Investment Portfolio Performance

The Performance Measures KPI for investment portfolios is a way to track how the value of your investments is responding to changes in the market, and how the value of your investments changes over time.