The financial services sector has evolved significantly in recent years, driven by technological advancements and global socio-economic events. Recognizing the importance of staying ahead in this dynamic environment, The KPI Institute (TKI) is dedicated to providing leaders, professionals, and the broader business community with essential knowledge and resources.

Every month, TKI curates a collection of diverse learning materials and opportunities in strategy and performance management and adjacent fields. Some of these resources, while released years ago, remain highly relevant due to their timeless principles and adaptability to changing business dynamics, providing enduring value and insights for today’s challenges.

This month, TKI is pleased to present comprehensive, research-based resources focusing on finance.

Top 10 Finance Key Performance Indicators (FREE): Part of the Top 10 KPIs Series, this collection of posters provides an overview of how key performance indicators (KPIs) are measured in practice today, specifically in finance. Some of the KPIs profiled in this poster are % Capital acquisition ratio, #Labor multiplier, and $ Debt-adjusted cash flow.

Articles (FREE): Find practical insights related to the financial services industry from a variety of articles published on Performance Magazine, written by subject matter experts and research analysts.

• Millennials and banks: surmounting the digital divide
• Fraud in the travel industry: Is digital footprinting the solution?
• Banking conundrums: customer focus or operational performance?
• Managing bank performance with the Balanced Scorecard

The Finance KPI Dictionary: This dictionary provides valuable information on over 190 KPIs not only by defining them but also by presenting the calculation formula for each and every one of them. It is an innovative tool, essential for assessing and optimizing a company’s performance in the five main functions of a finance division within an organization: asset/portfolio management, financial stability, forecast and valuation, liquidity, and profitability.

The Top 25 Finance KPIs – 2020 Edition: This report features the most popular KPIs used in the finance sector. It offers a comprehensive practical learning opportunity with KPIs by including not just detailed documentation for each KPI but also engaging articles discussing optimal practices for selecting and documenting KPIs.

Certified Data Analysis: Professionals in the finance sector can benefit from attending this course because it equips them with essential skills in data analysis, allowing them to create accurate financial models, optimize investment strategies based on comprehensive market analysis, make informed decisions, and mitigate risks effectively. 

Certified KPI Professional and Practitioner: Professionals within the finance sector can gain considerable advantages from enrolling in this course. It is packed with indispensable knowledge and competencies needed for accurately measuring, assessing, and articulating financial performance metrics. With these skills, finance professionals can lead strategic initiatives, make informed decisions, and significantly contribute to improving the overall success and financial stability of their organizations.

Finance KPIs help companies monitor their progress, determine where there are more financial benefits, identify areas in the organization that need more attention, and establish growth targets.

The KPI Institute’s The Top 25 Finance KPIs report unveils the most popular 25 KPIs used by global finance divisions throughout 2012 and 2020. Here is an excerpt from the report:

A strategically focused organization ensures that financial indicators track not only performance, but they also reveal trends, raise awareness to risk, and highlight business opportunities. Most of traditional financial metrics such as $ Earnings before interest and taxes (EBIDT), % Return on equity (ROE) and % Net profit margin are lagging KPIs and provide little leverage for a proactive management.

… The methodology used to advance this report consisted of ranking the KPI examples documented and published on smartKPIs.com, based on the number of views acquired in the period mentioned. The hundreds of thousands of visits to smartKPIs.com and the thousands
of KPIs visited, bookmarked and rated by members of the online community provided a rich data set, which combined with further analysis from The KPI Institute’s editorial team, formed a basis for the hereby presented research reports.

One of the most important benefits that this report brings is an international perspective on the most popular finance KPIs. They provide quantifiable measurement of the main components that lead to a successful finance strategy implementation. The documentation of KPIs compiles both academic insights and practitioner experience in working with these performance management tools.

Furthermore, Top 25 Finance KPIs – 2020 Edition provides a complete hands-on experience in working with KPIs as it contains not only 2 pages of detailed documentation for each KPI, but also interesting articles on best practices in terms of KPI selection and documentation.”

Based on the report, below are the Top 25 finance KPIs according to five subdivisions:

Asset / Portfolio Management KPIs

• $ Loans and investments
• % Management expense ratio (MER)

Financial Stability KPIs

• % Capital acquisition ratio
• % Bad debt write-offs from gross revenue
• $ Debt-adjusted cash flow (DACF)
• # Defensive interval ratio (DIR)
• # Altman Z-Score (for privately held non-manufacturing companies)
• # Altman Z-Score

Forecast and Valuation KPIs

• $ Shareholders funds per employee
• $ Economic value added (EVA)
• % Capital reinvestment ratio
• % Accurate forecasts of planned expenditure
• % Cash flow return on investment (CFROI)

Liquidity KPIs

• # Cash flow adequacy ratio
• # Debt-service coverage ratio (DSCR)

Profitability KPIs

• # Basic earning power ratio (BEP)
• # Labor multiplier
• % Return on funds employed (ROFE)
• # Capital expenditure to sales ratio
• % Return on net assets (RONA)
• % Return on capital employed (ROCE)
• $ Contribution margin
• % Return on fixed assets
• $ Net present value (NPV)
• % Net profit margin

You can access the comprehensive profile of each KPI as well as exclusive in-practice recommendations by downloading the report here.

May 22, 2013, Melbourne, Australia – The KPI Institute, the global authority on Key Performance Indicators (KPIs) research and education announces the launch of a new report in its 2011-2012 edition of its popular Top 25 series of reports. The series is based on research conducted through www.smartKPIs.com, which contains over 20,000 Key Performance Indicator examples, making it the world’s largest source of thoroughly documented KPIs.

Finances deal with sourcing, budgeting, lending and spending money while also managing their time value and risk attached with the aim of generating high returns. As time passed, finances have turned into a complex science, in order to be able to best respond to the needs of the present business environment. Therefore, the technological progress, the market volatility and the regulatory environment have led to a great change in the traditional instruments used in this field before, shaping thus its evolution. (more…)