KPIs HANDBOOK

STEP 1 STEP 2 STEP 3 STEP 4 STEP 5 STEP 6 STEP 7 STEP 8

Understand the Apply formula Result Compare with Industry Risk assessment
Set KPIs Goals Gather the data
meaning of the for calculation interpretation last period and comparison and action plan
and objectices
ratio budget

PROFITABILITY KPIs EFICIENCY KPIs

Provides insights into a company's ability to generate operating Average account
EBITDA MARGIN EBITDA / DAYS SALES Measures of how long it takes for a company to collect its
profits from its core operations, excluding the impact of accounts receivable (sales made on credit) from customers. receivables /
financing decisions, tax regulations, and non-cash expenses. Revenues OUTSTANDING Revenues * 365
Measures the profitability of core operations by examining the Evaluates the average number of days it takes for a company to sell Average
GROSS PROFIT Gross profit / DAYS INVENTORY its entire inventory. It is also known as "Days Sales of Inventory"
proportion of revenue remaining after deducting the direct
(DSI). DIO is essential for assessing how efficiently a company inventories / COGS
MARGIN costs associated with producing or delivering goods or services. Revenues OUTSTANDING * 365
manages its inventory.

Measures a company's overall operations by examining the Metric used to measure the average number of days it takes a Average account
NET PROFIT Net profit / DAYS PAYABLE company to pay its accounts payable (the amount the company
proportion of revenue remaining after deducting all expenses, payables / COGS *
MARGIN including COGS and indirect costs (operating expenses, taxes, etc.) Revenues OUTSTANDING owes to its suppliers and vendors for goods and services purchased
on credit) 365
Measures the profitability and efficiency of a company in Measure the time it takes for a company to convert its
RETURN ON Net profit / CCC DAYS investments into cash inflows from sales. It helps assess the DSO+DIO-DPO
generating profits from its shareholders' equity. It indicates the
EQUITY return earned by shareholders on their investment in the company Equity efficiency of a company's working capital.

RETURN ON Measures the profitability and efficiency of a company in Net profit / (Equity + ASSETS Measures a company's efficiency in generating sales revenue Revenues /
generating returns from both its equity and debt capital. relative to its total assets. It helps investors and analysts assess
CAPITAL EMPLOYED Long term debt) TURNOVER how effectively a company utilizes its assets to generate sales. Average assets

FIXED ASSETS Revenues /

RETURN ON Measures the profitability and efficiency of a company in Net profit / Total Measures the same as asset turnover just related to fixed assets.
generating profits from its total assets. It indicates how TURNOVER Average fixed
ASSETS effectively a company utilizes its assets to generate earnings. assets assets
A higher revenue per employee indicates that employees are EBITDA TO Assess a company's ability to cover its interest expenses with
EBITDA / Interest
REVENUE PER Revenues / EBITDA. It helps investors, creditors, and analysts evaluate a
generating more revenue for the company, which suggests INTEREST company's financial health and its capacity to meet its interest expenses
EMPLOYEE higher efficiency and effectiveness in utilizing human resources. Employee number COVERAGE obligations.
Indicates how effectively the company's employees contribute to TOTAL COST PER Measures the average cost incurred by a company for each of its
EBITDA PER generating operating profits before accounting for financing
EBITDA / Employee employees over a specific period. It provides valuable insights into
Total costs /
EMPLOYEE decisions, tax regulations, and non-cash expenses number EMPLOYEE the company's workforce management and operational efficiency. Employee number
Measures the average overhead expenses incurred by a company
NET PROFIT PER Net profit per employee reflects the efficiency and productivity Net profit/ OVERHEAD COSTS for each of its employees. Overhead costs are indirect costs that Overhead costs /
of a company's workforce in generating profits. PER EMPLOYEE are not directly attributable to a specific product but are necessary Employee number
EMPLOYEE Employee number
for the overall functioning of the business.

LIQUIDITY KPIs FINANCIAL STRUCTURE KPIs

It represents the amount of capital available to fund a company's Account receivable Equity ratio compares the company's total equity to its total
NET WORKING day-to-day operations. A positive NWC indicates that a company
+ Inventories – EQUITY RATIO assets, expressing the proportion of assets funded by equity and Equity / (Total Equity
CAPITAL has sufficient current to cover its short-term obligations. indicating the company's financial leverage and stability. and Liabilities)
Account payable
CURRENT ASSETS – Measures the absolute amount of surplus of liquid assets that Debt ratio assesses the proportion of a company's total debt
Current assets - DEBT RATIO Debt / (Total Equity
CURRENT can be used for payment of coming liabilities. Still high amount relative to its total assets, providing insight into the company's
LIABILITIES means the company does not apply right investment policy. current liabilities financial risk and dependency on debt financing. and Liabilities)

The current ratio measures a company's ability to cover its short- Current assets / INTEREST EXPENSE Measures the cost of borrowing funds from lenders or financial Interest expense /
CURRENT RATIO term liabilities with its short-term assets. Benchmark: 1 up to 3. institutions. It represents the interest that a borrower pays on
current liabilities IN LOANS the principal amount of a loan over a specific period. Loan amount

The quick ratio (also known as the acid-test ratio) evaluates a (Current assets – Measures structure of gross profit. Higher share of COGS in
QUICK RATIO company's ability to meet short-term obligations using its most TOTAL COGS IN COGS / Revenue
inventories) / Revenue means the gross profit is lower.
liquid assets. Benchmark: at least 1 REVENUE
current liabilities
Measures how much current liabilities can be paid by cash at the Cash / current Measures structure of gross profit. Higher share of variable
CASH RATIO VARIABLE COGS COGS in Revenue means the gross profit is lower, but breakeven Variable COGS /
moment of consideration, without need to convert receivables
or inventories to cash firstly. liabilities IN REVENUE point is lower too. Revenue x 100

WORKING Measures the relationship between a company's net working (Current assets – Measures structure of gross profit. Higher fixed costs indicate
FIXED COGS IN Fixed COGS /
CAPITAL capital and its total assets. current liabilities) / higher breakeven point.
REVENUE Revenue x 100
TURNOVER Total assets

CASH KPIs INVESTOR / VALUATION KPIs

Market price per
OPERATING CASH Cash generated/spent in company's core business activities, (Net Income + D&A – PRICE-TO- Measures the relationship between a company’s stock price and
share / Earnings
excluding financing and investing activities. its earnings per share (EPS)
FLOW NWC increase EARNINGS (P/E) per share
Market capitalization
FREE CASH Cash you can use for new investments, dividends or debt PRICE-TO-SALES Measure the relationship between a company’s value and its
repayments. To be more precise, this is cash available after FCF = OCF + CFI revenues or Valuation / Total
FLOW operating expenses and investments are covered (P/S) RATIO revenue
CASH Average number of days between moment of paying for PRICE-TO-BOOK
liabilities and moment of collecting receivables
Measure the relationship between a company’s stock price and Market capitalization
CONVERSION DSO + DIO + DPO (P/B) RATIO its book value per share
/ Book value
CYCLE

FREE CASH FLOW Percentage of sales available for new investments, dividend or ENTERPRISE Measure the relationship between a company’s enterprise value EV/EBITDA ratio =
debt repayments, after covering operating expenses and FCF/Sales and its EBITDA.
RATE VALUE-TO-EBITDA Enterprise value /
investments.
EBITDA
FREE CASH FLOW Ratio which shows you how well you are capable of converting PRICE-TO-CASH It is a measure of how much investors are willing to pay for each Market capitalization
profit into cash flow FCF/Net Income dollar of cash flow generated by the company. / Cash flow from
REALIZATION FLOW (P/CF) RATIO
operations
CASH RATIO With how many dollars of cash you cover each dollar of Cash/Total Dividend yield is a financial ratio that represents the percentage Annual dividend per
liabilities? DIVIDEND YIELD of a company’s stock price that is paid out in the form of
liabilities dividends. share / Stock price

Bojan Radojicic Bojanfin.com Repost

Repost
 50 SALES PER SQUARE
FOOT
RETAIL
Efficiency of the retail space
in generating revenue,
indicating how well the retail
space is utilized
SOFTWARE
MONTHLY RECURRING
REVENUE
SAAS
Tracks the total predictable
revenue generated by the
business every month
MANUFAC-
OVERALL EQUIPMENT
EFFECTIVENESS
TURE
Effectiveness of manufacturing
equipment by combining
metrics for availability,
performance, and capacity
CONSULTING
BILLABLE UTILIZATION
RATE
Measures the percentage
of time consultants spend
on billable work versus
non-billable activities,
OCCUPANCY RATE
ESTATE
REAL
Measures the percentage of
properties or units that are
rented out versus the total
available
CREATORS HEALTHCARE
PATIENT
SATISFACTION SCORES
Level of satisfaction reported
by patients, reflecting the
quality of care and patient
experience
AUDIENCE GROWTH
RATE
Rate at which the creator's
follower base is growing
on various platforms
AUTOMOTIVE
PRODUCTION VOLUME
Measures the total
number of vehicles
produced within a specific
period
DAYS SALES
AGRICULTURE WHOLESALE
OUTSTANDING
Average number of days it
takes for a company to
collect payment after a
sale
YIELD PER ACRE
Measures the amount of crop
produced per acre of farmland
Bojan Radojicic
KPIs FOR 10
INDUSTRIES
INVENTORY
TURNOVER
Tracks how quickly inventory
is sold and replaced over a
specific period
CHURN RATE
Measures the rate at which
customers cancel their
subscriptions,
CYCLE TIME
Tracks the time required
to complete a production
process from start to finish
CLIENT RETENTION
RATE
Tracks the percentage of
clients who remain with the
firm over a given period
AVERAGE RENT PER
SQUARE FOOT
Calculates the average
rental income received per property by comparing the net
square foot
property's current market value.
AVERAGE LENGTH OF
STAY
Calculates the average
duration of a patient's stay
in the hospital
ENGAGEMENT RATE
Calculates the level of
audience interaction with
the creator's content
VEHICLE DEFECT RATE
Calculates the percentage
of vehicles with defects or
requiring recalls
DAYS PAYABLE
OUTSTANDING
Average number of days a
company takes to pay its
bills and invoices
CROP PROFITABILITY
Calculates the profit
generated from each type of
crop
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GROSS MARGIN ON
INVESTMENT
Assesses the profit return
on the money invested in
inventory
CUSTOMER
ACQUISITION COST
Calculates the average
cost incurred to acquire a
new customer
SCRAP RATE
Measures the percentage of
materials wasted or scrapped
during the manufacturing
process
AVERAGE REVENUE
PER CLIENT
Calculates the average
revenue generated from
each client
CAPITALIZATION RATE
Return on investment for a
operating income to the
STAFF-TO-PATIENT
RATIO
Measures the number of
healthcare staff members
available per patient
CONTENT REACH
Tracks the number of
unique viewers or readers
that the content reaches
CUSTOMER
SATISFACTION INDEX
Assesses buyer satisfaction
with their vehicle and the
purchasing experience
INVENTORY
TURNOVER
Tracks how frequently
inventory is sold and replaced
over a specific period
NET PROFIT MARGIN
Assesses the percentage of
revenue that remains as
profit after deducting all
costs and expenses
RETURN ON EQUITY
Return on investment for the
shareholders, indicating how
effectively the company uses equity
investments to generate profit
CUSTOMER LIFETIME
VALUE
Estimates the total revenue a
business can expect from a
single customer account
throughout their relationship
ON-TIME DELIVERY
Tracks the percentage of
products delivered to
customers on time
PROJECT MARGIN
Assesses the profitability of
individual projects by
comparing revenue generated
to the costs incurred
GROSS RENT
MULTIPLIER
Evaluates the value of a
property in relation to its
gross rental income
MEDICAL ERROR
RATES
Track the frequency of
errors in medical
treatment or medication
CONVERSION RATE
Measures the percentage of
audience members who
take a desired action
AVERAGE TIME TO
MARKET
Measures the average
duration from vehicle
design to launch
GROSS MARGIN
Percentage of total sales revenue
that the company retains after
incurring the direct costs associated
with producing the goods it sells
SOIL HEALTH
Assesses the condition and
fertility of soil
BY BOJAN RADOJICIC
CONVERSION RATE
Percentage of visitors to a
store or website who make a
purchase
LEAD-TO-CUSTOMER
CR
Efficiency of the sales funnel by
tracking the percentage of leads
that become paying customers
GROSS PROFIT
Measures how much profit
stays after substracing cost
of produced goods from
revenue from sales
EMPLOYEE TURNOVER
RATE
Measures the rate at which
employees leave the firm
CASH ON CASH
RETURN
Measures the cash income
earned on the cash
invested in a property
READMISSION RATES
Track the percentage of
patients who are readmitted
to the hospital within a
specific period after discharge
REVENUE PER
CONTENT PIECE
Calculates the earnings
generated per content
item
EBITDA
Measures a company’s
operating performance by
calculating its revenue
minus expenses
FREE CASH FLOW
The amount a cash that
company make after
capital exepnitures
FARM LABOR
PRODUCTIVITY
Measures the output per
labor hour or employee
Repost
21 PRICE-TO-EARNINGS RATIO
INVESTMENT
INDICATOR
EARNINGS PER SHARE RETURN ON EQUITY

A measure of a company's current share The portion of a company's profit allocated Measures a corporation's profitability by
price relative to its per-share earnings, to each outstanding share of common revealing how much profit a company
indicating how much investors are willing to stock, indicating profitability on a per-share generates with the money shareholders
pay per dollar of earnings. basis. have invested.

DIVIDEND YIELD BETA MARKET CAPITALIZATION

A financial ratio that shows how much a Measures the volatility of an investment The total market value of a company's
company pays out in dividends each year relative to the market, with a beta above 1 outstanding shares of stock, used to
relative to its stock price, indicating the indicating more volatility than the market determine the company's size.
income generated from an investment. and below 1 indicating less.

DEBT-TO-EQUITY RATIO PRICE-TO-BOOK RATIO OPERATING MARGIN

Indicates the relative proportion of

Compares a company's market value A margin ratio used to measure a
shareholders' equity and debt used to
to its book value, indicating if a stock company's pricing strategy and
finance a company's assets, assessing
is undervalued or overvalued. operating efficiency.
financial leverage.

FREE CASH FLOW QUICK RATIO ASSET TURNOVER RATIO

A measure of financial performance
calculated as operating cash flow minus Measures a company’s ability to meet its The ratio of the value of a company’s sales
capital expenditures, indicating the cash a short-term obligations with its most liquid or revenues generated relative to the value
assets. of its assets.
company generates after accounting for
cash outflows.

GROSS PROFIT MARGIN INTEREST COVERAGE RATIO ROA

The proportion of money left over from An indicator of how profitable a company is
A measure of a company's ability to meet its relative to its total assets, measuring how
revenues after accounting for the cost of
interest payments. efficient management is at using its assets to
goods sold.
generate earnings.

VOLATILITY ALPHA PRICE-TO-SALES RATIO

Indicates the price variability of an asset A measure of an investment's performance

on a risk-adjusted basis relative to a A valuation ratio that compares a
over time, with higher volatility indicating
benchmark index company’s stock price to its revenues.
greater risk.

CASH FLOW PER SHARE BOOK VALUE PER SHARE PEG RATIO

The amount of cash a company generates The equity available to common A stock's P/E ratio divided by the growth
and distributes to shareholders on a per- shareholders divided by the number of rate of its earnings, providing a more
share basis. outstanding shares. complete picture than the P/E ratio alone.

Bojan Radojicic Bojanfin.com Repost

 EBITDA
VS
MARGIN
WHAT DOES EACH RATIO MEASURES?
Provides insights into a company's
ability to generate operating
profits from its core operations,
excluding the impact of financing
decisions, tax regulations, and non-
cash expenses.
EBITDA
X 100
REVENUES FROM SALES
Get a sense of a company's
operational profitability
without the impact of
financing, taxes, and non-cash
items.
Provides a way to compare the
operational profitability of
companies across different tax
jurisdictions and capital
structures.
By ignoring interest, taxes,
depreciation, it can paint an
overly optimistic picture,
especially for capital-intensive
businesses.
Companies with a lot of debt
or significant capital
expenditures might appear
healthier than they really are.
Bojan Radojicic
NET
PROFIT
VS
MARGIN
Measures a company's overall
operations by examining the
proportion of revenue remaining after
deducting all expenses, including
COGS and indirect costs (operating
expenses, taxes, interest, etc.)
FORMULAS
NET INCOME
X 100
REVENUES FROM SALES
PROS
Incorporates all expenses,
including operational,
financial, and tax-related costs
Give a complete picture of
profitability.
Widely used profitability
metrics.
CONS
Items like one-off gains or
losses, changes in tax laws, or
restructuring costs can distort
the net profit margin.
Different financing structures
and tax jurisdictions can make
comparisons between
companies trickier.
Bojanfin.com
FREE CASH
FLOW
MARGIN
Shows the percentage of free cash
flow (FCF) relative to sales
(revenue). It indicates how
efficiently a company converts its
sales to free cash after accounting
for all operating expenses and
capital expenditures.
FREE CASH FLOW
X 100
REVENUES FROM SALES
Measures how effectively a
company converts its sales
into actual free cash.
Insight into its cash generating
ability.
Indicates the cash available for
dividends, debt repayment,
and reinvestment.
Can be significantly affected
by capital expenditure
decisions, which can vary
greatly year-to-year.
Requires a deeper
understanding of the
company’s cash flow
statement, especially
discerning between
operational cash flows and
capital expenditures.
Repost
ROCE VS ROE VS ROA VS ROIC
BY BOJAN RADOJICIC

WHAT DOES EACH RATIO MEASURES?

Measures the profitability Measures the profitability Measures the profitability

and efficiency of a and efficiency of a
company in generating company in generating
returns from both its profits from its
equity and debt capital. shareholders' equity. It
indicates the return earned
by shareholders on their
investment in the company
and efficiency of a
company in generating
profits from its total assets.
It indicates how effectively
a company utilizes its
assets to generate
earnings.

FORMULAS

NET OPERATING PROFIT

(SALES – COGS) CON NET INCOME AFTER TAX
X 100

SALES SALES SALES EQUITY + LONG TERM DEBT

- CASH

WHEN IS EACH SUITABLE FOR APPLY?

Most suitable when

comparing the
performance of companies
in capital-intensive sectors,
like manufacturing or
utilities, where large
investments in assets are
common and where
investments are finance
from loans.
Best used for companies
where equity financing is
dominant, making it ideal
for sectors like services,
finance or IT.
Most useful for comparing
companies in the same
industry. Different
industries use assets
differently. Good for use
when compare the results
vs. last year or vs. budget.
Good for real estate
companies.

WHO USES THESE RATIOS MOST?

Used by investors and Preferred by shareholders Widely used by

analysts when assessing
companies in sectors
where the capital
employed is a key
determinant of success.
and equity analysts to see management teams and
how well their investments operations analysts to
are performing in terms of determine if the
net income generation. company's assets are
being deployed efficiently.

Bojan Radojicic Bojanfin.com Repost

 FINANCIAL BY BOJAN RADOJICIC

HEALTH SCORECARD
CAPITAL EFFICIENCY
Total Score Re t u rn on Invested Capital 10%
< 8%

69%
8 % t o 1 2% 2
> 12%

Re t u rn on Assets 7%
< 5% 1
5% to 9%
> 9%
Re t u rn on Equ ity 15%
OPERATIONAL MARGINS < 12%
1 2 % t o 1 7%
EFFICIENCY > 17% 3
M A R GINS B E NCHMARK SC O RE
O PE RATIONAL EFFICEINCY B E NCHMARK SC O RE Re t u rn on Capital Employed 12%
Gross P rofit Margin 45% < 10%
Da ys Sales O utstanding 60 < 40% 1 0 % t o 1 4% 2
< 50 4 0 % t o 5 0% > 14%
5 0 t o 70 2 > 50% 3
> 70

Da ys P ayables Ou tstan ding 40

E BITDA Margin 20% SOLVENCY
< 17%
< 35 1 F I N ANCI AL HEALTH B E NCHMARK SC O RE
3 5 t o 45 1 7 % t o 2 3%
> 45 > 23% 3
De bt Rat io 45%
> 55%
Da ys In ventory Ou tstan ding 50 O pe rating Margin 15% 3 5 % t o 5 5% 2
< 40 1 < 13% < 35%
4 0 t o 60 1 3 % t o 1 7%
> 60 > 17% 3 A s sets t o Equity 5
> 6.5
A s set T urnover 2 P re -Tax P rofit Margin 12% 3 . 5 t o 6.5 2
< 1.7 < 10% < 3.5
1 . 7 t o 2.3 2 1 0 % t o 1 4% 2
> 2.3 > 14% Lon g-term Debt t o Assets 25%
> 30% 1
Fixe d Asset Turnover 4 2 0 % t o 3 0%
N e t Profit Margin 10%
< 2.5 < 20%
< 8%
2 . 5 t o 5.5 2
8 % t o 1 2% 2
> 5.5 In t an gibles t o T otal Assets 15%
> 12%
> 20%
C a pEx t o OCF 15% 1 0 % t o 2 0% 2
> 18% Fre e Cash Flow M argin 9%
< 10%
1 2 % t o 1 8% 2 < 7%
< 12 % 7 % t o 1 1% Goodwill / A ssets 10%
> 11% 3 > 15%
C a pEx t o Reven ue 10% 5 % t o 1 5% 2
> 12% O C F / Sales 14% < 5%
8 % t o 1 2% < 10%
<8% 3 1 0 % t o 1 6% 2 De bt / Equity 100%
> 14% > 120%
LIQUIDITY 8 0 % t o 1 20% 2
O C F / Net Income 150% < 80%
C u rrent Ratio 2
< 120%
< 1.5 Lon g-Term Debt / Equity 30%
1 2 0 % t o 1 80%
1 . 5 t o 2.5 2 > 40%
> 180% 3
> 1.5 2 0 % t o 4 0% 2
< 40%
Q u ick Rat io 1 FC F / Net Income 120%
< 0.8 1 < 100%
N e t Debt / EBITDA 120%
0 . 8 t o 1.2 1 0 0 % t o 1 40% 2
> 140%
> 1.2 > 140%
1 0 0 % t o 1 40% 2
< 100%
C a sh Ratio 0.25 FC F / EBIT 130%
< 0.2 1 < 110% E BITDA / Interest Expense 10
0 . 2 t o 0.3 1 1 0 % t o 1 40% 2 <5 1
> 0.3 > 140% 5 to 15
> 15

Bojan Radojicic Bojanfin.com Repost


EBITDA VS
A measure of a company's overall financial
performance and is used as an alternative to
simple earnings or net income. The purpose
is to provide a clear view of the operational
profitability of a company, excluding the
effects of financial and accounting decisions
NET INCOME + DEPRECIATION + NET INCOME
AMORTIZATION + INTEREST + AMORTIZATION
TAX
EBITDA margin -insights into a company's
ability to generate operating profits from its
core operations, excluding the impact of
financing decisions, tax regulations, and
non-cash expenses.
Useful for comparing companies within
the same industry and for companies with
significant debts or tax structures.
Get a sense of a company's
operational profitability without the
impact of financing, taxes, and non-
cash items.
Provides a way to compare the
operational profitability of companies
across different tax jurisdictions and
capital structures.
By ignoring interest, taxes, depreciation,
it can paint an overly optimistic picture,
especially for capital-intensive
businesses.
Companies with a lot of debt or
significant capital expenditures might
appear healthier than they really are.
Not under GAAP so it can be subject of
speculations
Bojan Radojicic
NET
INCOME
VS
DEFINITION & PURPOSE
The total profit of a company after all expenses,
including taxes and interest, have been
deducted from revenue. The purpose is to
gauge the overall profitability of a company,
including all its expenses.
CALCULATION
TOTAL REVENUES - TOTAL EXPENSES
KEY RATIOS
Net margin - Measures a company's overall operations
by examining the proportion of revenue remaining
after deducting all expenses, including COGS and
indirect costs
Return on Equity - Measures the profitability and
efficiency of a company in generating profits from its
shareholders' equity
APPLICABILITY
Applicable for overall profitability analysis
and is crucial for investors and stakeholders.
ADVENTAGES
Incorporates all expenses, including
operational, financial, and tax-related
costs
Give a complete picture of
profitability, Widely used in earnings
reports and is a key determinant of a
company’s share price.
DISADVENTAGES
Items like one-off gains or losses,
changes in tax laws, or restructuring
costs can distort the net profit margin.
Different financing structures and tax
jurisdictions can make comparisons
between companies trickier.
May not accurately reflect the cash
position of a company.
WINNER
FREE CASH FLOW
Bojanfin.com
FREE CASH
FLOW
The cash a company generates after accounting
for cash outflows to support operations and
maintain capital assets. The purpose is to To
understand how much cash is available for
reinvestment in the business, debt reduction,
dividend payments, or other uses.
+ DEPRECIATION +
-
+/- CHANGES IN NWC
CAPEX
FCF rate - Percentage of sales available for new
investments, dividend or debt repayments, after
covering operating expenses and investments.
FCF Realization - shows you how well you are
capable of converting profit into cash flow
Vital for assessing the liquidity and financial
flexibility of a company, especially for
investors and creditors.
Measures how effectively a company
converts its sales into actual free cash.
Helpful in evaluating a company's
ability to generate cash and manage its
capital structure.
Indicates the cash available for
dividends, debt repayment, and
reinvestment.
Can be significantly affected by
capital expenditure decisions, which
can vary greatly year-to-year.
Requires a deeper understanding of
the company’s cash flow statement,
especially discerning between
operational cash flows and capital
expenditures.
Repost
 VERTICAL HORIZONTAL
ANALYSIS VS ANALYSIS

By Bojan Radojicic

Use in single period DEFINITIONS Used in mulitple periods

Involves expressing each item on a particular financial Evaluates changes in financial statement numbers
statement as a percentage of a base figure. across multiple periods or budget.

For example, on an income statement, each line item (like It looks at the amount and percentage change from
Cost of Goods Sold or Operating Expenses) can be one period to the next.
presented as a percentage of total revenue.

Salaries share in Revenue EXAMPLES Revenue growth vs LY

Vertical analysis 2024 2025 2026 2027 2028 Horizontal analysis 2024 2025 2026 2027 2028
$ $

Revenues 100% 100% 100% 100% 100% Revenues 8% 11% 11% 11% 11%
COGS variable 60% 60% 60% 60% 60% COGS variable 8% 11% 11% 11% 11%
COGS fixed 2% 2% 2% 2% 2% COGS fixed 8% 11% 11% 11% 11%
COGS 62% 62% 62% 62% 62% COGS 8% 11% 11% 11% 11%

Gross profit 38% 38% 38% 38% 38% Gross profit 8% 11% 11% 11% 11%

Overhead - variable 9% 12% 12% 12% 12% Overhead - variable -2% 41% 13% 13% 10%
Overhead - fixed 10% 10% 10% 10% 10% Overhead - fixed 9% 14% 10% 10% 10%
Overhead costs 19% 22% 22% 22% 22% Overhead costs 4% 26% 12% 11% 10%

EBITDA / Operating profit 18% 15% 14% 15% 16% EBITDA / Operating profit 16% -8% 5% 20% 15%

Depreciation and amortization 2% 3% 3% 3% 3% Depreciation and amortization 95% 92% 11% 12% 6%
Interest and financial expenses 0% 0% 0% 0% 0% Interest and financial expenses -21% 18% 15% 13% 12%
Financial income 0% 0% 0% 0% 0% Financial income -50% 0% 0% 0% 0%
EBT 16% 12% 11% 12% 13% EBT 12% -19% 4% 22% 18%

Tax 2% 2% 2% 2% 2% Tax -8% -19% 4% 22% 18%

Net income 14% 10% 9% 10% 11% Net income 16% -19% 4% 22% 18%

More control PURPOSE Trends

Provides insights into the structure of assets, liabilities,
and equity OR the composition of revenues and expenses.
Helps in understanding the relative proportion of each
component.
Based on results it helps management to make business
decisions based on share one category into main
category. For example, business policy is to keep costs of
rent at at the level of 5% of revenues as maximum.
Helps to identify trends over time, by comparing histriocal
of future results in a row.
Aids in determining if certain financial metrics are
improving or deteriorating over the periods. For examples
it can measure revenue growth rate, or salary growth rate
in past of projected period. Aslo it could be useful to
dompare actual with budgeted or forecasted figures.

UTILITY

Useful for comparing companies of different sizes. Since Useful for analyzing a company's growth and predicting
percentages are used, it standardizes figures and makes future performance. By spotting trends, management and
comparative analysis more meaningful analysts can make informed decisions.

Bojan Radojicic Bojanfin.com Repost

 HOW TO CREATE SIMPLE
MANAGEMENT REPORT
Align data if needed,
Create management Lookup TB data with Create graphs, and
report layout (tables, Upgrade your CoA – Management
Export trial balance calculate KPIs based
lines, graphs, KPIS, more simplicity and reports, so GL data to
of GL with defined on pre-defined
adding functional
actual, FCST, cost/revenue centers be imported in formulas, and ull PPT
budget...) cost/revenue centers reports
presentation

Bojan Radojicic Bojanfin.com Repost

STARTUP & SAAS
METRICS IN EXCEL BOJAN RADOJICIC

TRAFFIC Month 3 Month 4 Month 5

Show total unique visitors Sdflj adsfl jdf
at website Total Traffic 13,033 14,015 12,460

Organic 9,797 9,103 9,674

Direct 2,087 1,723 1,356

Referred 180 180 180

Show structure of visitors ,
in this case - organic Paid 755 2,709 1,000 Sdflj adsfl jdf
LEADS AND CLIENTS Month 3 Month 4 Month 5
visitors.
New Leads (sign ups) 138 152 138

Existing Leads 3,826 3,964 4,116

Total Leads 3,964 4,116 4,254

Sdflj adsfl jdf New Customers 24 12 25

Sdflj adsfl jdf
Existing Customers 53 75 86

Churn 2 1 3

Total Customers 75 86 108

Sdflj adsfl jdf ARPU 46 42 35 Sdflj adsfl jdf

REVENUES AND MARGINS Month 3 Month 4 Month 5

New MRR 566 194 197

Existing MRR 2,932 3,458 3,587

Churn MRR 40 65 31

Sdflj adsfl jdf Total MRR 3,458 3,587 3,753 Sdflj adsfl jdf
CAC 3,816 3,816 3,816
Gross Margin (358) (229) (63)

RATIOS AND RATES Month 3 Month 4 Month 5

Traffic Growth Rate 11% 8% -11%
Organic traffic growht rate 6% -7% 6%

Sdflj adsfl jdf Revenue Growth Rate MoM 18% 3.7% 5%

Sdflj adsfl jdf
Gros Maring Rate -10% -6% -2%
CARG Revenue MTD 17% 12% 10%
Customer Acquisition Cost (CAC) 159 318 153
Lead Acquisitoin Cost (LAC) 28 25 28

CONVERSION FLOW Month 3 Month 4 Month 5

Sdflj adsfl jdf Logged-in leads 126 140 126 Sdflj adsfl jdf
1 task created 69 65 55

10 tasks created 37 28 100

2 users created 16 75 120

5 users created 1 2 1
Sdflj adsfl jdf Sdflj adsfl jdf
Qualified leads (2u+10t or 20t) 48 49 50
New customers 24 12 25

CONVERSION RATES Month 3 Month 4 Month 5

Leads/ Trafic 1.06% 1.08% 1.11%
Logged-in leads / New leads 91% 92% 91%
Qualified leads / Logged-in 38% 35% 40%
Sdflj adsfl jdf New customers / Logged-in leads 19.05% 8.57% 19.84% Sdflj adsfl jdf
New customers / Qualified leads 50% 24% 50%
Customers / Leads 19.05% 8.57% 19.84%

DEMOs Month 3 Month 4 Month 5

DEMOs 8 5 9
DEMOs/Traffic 0.06% 0.04% 0.07%
Sdflj adsfl jdf Sdflj adsfl jdf
DEMO customers 3 1 1
DEMO customer conversion rate 38% 20% 11%
DEMO customers / Total New Customers 13% 8% 4%

CHURN Month 3 Month 4 Month 5

Churn Rate 3.75% 1.33% 3.48%
Churn revenue 1.36% 1.88% 0.86%
Sdflj adsfl jdf Sdflj adsfl jdf
LTV Month 3 Month 4 Month 5
Lifetime Value (LTV) -349 -141 -67
LTV : CAC -2.19 -0.44 -0.44

Bojan Radojicic Bojanfin.com Repost

CUSTOMER LIFETIME VALUE
EXPLAINED
WHAT IS CLV
Understanding CLV can guide businesses in
CLV is a metric used to estimate the total revenue a deciding how much they should invest in
business can expect from a single customer account retaining existing customers and acquiring
throughout the business relationship. The concept of CLV is new ones.
significant because it helps businesses focus on long-term
customer engagement, rather than short-term sales.

FORMULA OR

Average number of sales Average sales per customer

X (ARPU)
CLV = Number of repeat transactions CLV =
X
Average retention time Churn rate

EXAMPLE
Assume the following for a subscription-based service:
Let's assume the following for a hypothetical coffee Average Monthly Revenue per User (ARPU): $20
shop: Churn Rate: 5% per month (0.05 as a decimal)
Average Value of a Sale: $5 per order Using the formula:
Number of Repeat Transactions: 2 orders per week CLV=$200.05CLV=0.05$20
(approximately 8 per month) CLV=$400CLV=$400
Average Retention Time: 3 years In this example, the CLV of a customer for this subscription-
Using the basic formula: based service would be $400. This means that, on average, each
CLV=$5×8×12×3CLV=$5×8×12×3 customer is expected to contribute $400 in revenue before they
CLV=$5×96×3CLV=$5×96×3 churn.
CLV=$1,440CLV=$1,440

1. Sensitivity to Churn Rate: This formula demonstrates how sensitive CLV is to

the churn rate. A higher churn rate significantly reduces CLV.
2. Long-Term Focus: Businesses use this calculation to emphasize the importance
KEY POINTS of reducing customer churn for long-term profitability.
3. Applicability: This method is particularly useful for subscription-based
businesses or industries where churn rates are a critical metric, such as
telecom, SaaS, or streaming services.

Bojan Radojicic Bojanfin.com Repost