Finance Metrics

The most important Finance metrics and KPIs. Learn about what metrics and KPIs are best for you, vote, and contribute your own.

Metric
Description

Won Opportunities is the count of sales opportunities that are closed won. It is a measure of success of the Sales and Marketing teams.

Advertising Costs is a broad expense category, which typically includes online, broadcast, print, outdoor, and direct mail efforts. Advertising can be used at various stages of the customer journey, from brand awareness and brand shaping, to highly…

Cost Per Hire is a fundamental recruiting metric, that helps Human Resource professionals budget, calculate a return on their effort, and understand how effective their employee brand is when recruiting talent. Cost Per Hire is defined as the…

Inventory Turnover measures how many times in a given time-period your organization is able to sell its entire inventory. Inventory Turnover is an important efficiency metric and helpful in analyzing pricing, product demand, and of-course inventory…

The Quick Ratio measures the ability of your organization to meet any short-term financial obligations with assets that can be quickly converted into cash. It considers the ability for Current Assets, less inventory, to cover Current Liabilities.

The Return On Marketing Investment metric measures how much revenue a marketing campaign is generating compared to the cost of running that campaign. Effective marketers are driven to connect their time, energy and advertising spend with results…

An often overlooked metric by early stage entrepreneurs and investors is the SaaS Quick Ratio, used to measure the growth efficiency of a company. Another way to think of it is as a health measure of company growth.

Gross Profit is the amount left over from total revenues after Cost of Goods Sold (COGS) has been deducted. COGS will typically include the cost of making and selling the product or the cost of services provided by the company.

Net Financial Debt is a company’s non-operational debt that considers cash and short-term securities against financial debt.

Financial Debt is a company's non-operational debt. With low interest rates and a supply of lenders, debt in non-financial corporations has steadily risen in the past 15 years, benefitting some companies, but putting others at risk.

The Lifetime Value to Cost of Acquisition (LTV/CAC) Ratio tells you if the theoretical lifetime revenue you get from a customer is higher or lower than the sales and marketing costs needed to acquire that customer.

Churn is the enemy of any subscription company. Logo Churn, also called Customer Churn or Attrition, counts the number of customers who cancel or don't renew their subscription. This metric is often expressed as a percentage that describes the…

Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) is one of a few profit metrics. At its simplest, EBITDA focuses only on operational profitability, ignoring non-cash expenses by adding them back to Net Income.

Gross Margin is the difference between Revenue and Cost Of Goods Sold (COGS). Typically, it is calculated as the selling price of an item, minus the cost of material and labour used to produce the item.

A company's Gross Burn is the total cash spent on operations. These costs typically include all salaries, rent, and other overhead as well as interest and taxes. This metric is often confused with Net Burn, which is a measure of negative…

Net Burn is the amount a company is losing per month as they burn through their cash reserves. It occurs when a company’s operating costs are higher than their revenue. A company that is profitable and generating cash has a "negative Net Burn…

Payroll to Revenue Ratio is a productivity metric that measures how effective a business is at utilizing its labour costs to produce revenue. As with any ratio, it's always important to understand both the numerator and the denominator and how…

Gross Monthly Recurring Revenue Churn Rate (Gross MRR Churn Rate) is the percentage of recurring revenue lost due to both cancellation and downgrades. Note that it is common to express this metric as a monthly rate, though it can also be expressed…

Out of Cash Date gives you a rough estimate of when you will be out of cash. This metric is most often expressed as the number of months before Cash Out. This is a useful metric for CEOs and CFOs who are managing companies that are not profitable…

Full-Time Equivalents (FTE) is a calculated metric that adds all of the true full-time employees to the fractional values for all part-time employees, contractors, students and interns. From a financial point of view, knowing what your FTE number is…

Full-Time Employees generally work more than 4 days or 30 hours a week and are permanently employed, as opposed to being temporary or seasonal. In many countries, a Full-Time Employee is also entitled to health-care benefits and vacation pay among…

Net Income is an accounting term that refers to the total revenue minus the total expenses for any given period. Net Income is one of the best ways to determine a business' profitability and is often referred to as the bottom line. For Net…

Revenue is the income generated through a business' primary operations, such as the sale of products or services, or proceeds from rent or interest, less any discounts or returns. Unlike related metrics, such as Net Revenue, Gross Margin, or…

The Debt to Equity Ratio measures how your organization is funding its growth and how effectively you are using shareholder investments. A high debt to equity ratio is evidence of an organization that’s fuelling growth by accumulating debt. This is…

Current Ratio measures the ability of your organization to pay all of your financial obligations in one year. This ratio accounts for your current assets, such as accounts receivable, and your current liabilities, such as accounts payable, to help…

The Cost Of Goods Sold (COGS) is the measure of costs incurred by a company to manufacture or resell a product. Costs typically include raw material and direct labour, but this varies from business to business, depending on the products or services…

Average Selling Price (ASP) is the average price a given product is sold for. This metric can be applied narrowly to a product or service or, more broadly, to an entire market. It's a common metric, often used to compare businesses or channels…

The Subscribers metric counts the number of paid or non-paid users who have periodic access to a product or service. Most often, this metric refers to a subscription-based business model, for example, newspapers, magazines, phone, internet service,…

Net Profit is the value that remains after all operating expenses are subtracted from a company’s revenue. Net Profit is one of the best ways to determine a business' profitability and is often referred to as the bottom line. For Net Income…

Annual Recurring Revenue (ARR) is the sum of all subscription revenue expressed as an annual value. For most companies, ARR is the sum of all new business subscriptions and upgrades (sometimes called expansion), minus downgrades (or contractions)…

Monthly Recurring Revenue (MRR) Growth Rate is the velocity at which MRR is being added to the business, expressed as a percentage. MRR Growth Rate is often cited as a monthly rate, but it's also possible to express it using an annual timeframe…

Average Revenue Per Account (ARPA) is the average revenue generated per account per year or month. It is used as an indication of revenue generation capability and the ability to meet targets. Executives and investors use this metric as an…

Average Revenue Per User (ARPU) is a company’s generated revenue that is averaged across all users and reported as a monthly or yearly value. ARPU is a top-level metric, that can easily be normalized and is often cited as a comparative measure…

Monthly Recurring Revenue (MRR) is the sum of all subscription revenue expressed as a monthly value. For most companies, MRR is the sum of all new business subscriptions and upgrades (sometimes called expansion), minus downgrades (or contractions)…

The Customer Lifetime Value (LTV) metric indicates the total revenue a business can reasonably expect from a single customer account. It considers a customer's revenue value and compares that number to the company's predicted customer…

Customer Acquisition Cost (CAC) is the cost a business incurs to acquire a new customer. This includes the fully loaded costs associated with sales and marketing to attract a potential customer and to convince them to purchase.

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