Financial KPIs (Key Performance Indicators)

Financial KPIs (Key Performance Indicators) are measurable metrics used to assess a company’s financial health and progress toward key goals such as profitability, liquidity, efficiency, and overall strategic performance. They turn financial activity into trackable numbers (e.g., ratios, percentages, monetary values) that support data-driven decision-making and resource allocation by showing how effectively a business generates profit, manages cash and debt, and uses its assets. Financial KPIs are goal-oriented and actionable, helping identify strengths and areas for improvement, and they are commonly grouped into categories such as profitability (e.g., net profit margin, gross margin), liquidity (e.g., current ratio, quick ratio), efficiency (e.g., accounts receivable turnover, inventory turnover), leverage/solvency (e.g., debt-to-equity, return on equity), and valuation (e.g., earnings per share, price-to-earnings ratio).