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Examples of KPIsExamples of KPIs
for Finance Departmentfor Finance Department
The KPI Examples ReviewThe KPI Examples Review
Copyright 2017 The KPI Examples Review.
http://kpi-examples.blogspot.com/.
Introduction
In this report we define the key performance indicators for finance
department based on web search data in 2015. For some of the key
performance indicators were defined their formulas and calculation
examples. In all our calculations we used the official financial
statements of Siemens AG.
1. List of the 5 KPIs for Finance Department
Based on the web search data in 2015, we define the 5 financial KPIs
used to measure a company's performance:
1). Net income (net profit, net earnings);
2). Earnings before interest and taxes (EBIT)/ operating income
(operating profit);
3). Gross profit;
4). Current ratio (working capital ratio);
5). Return on investment (ROI).[1]
Source: "List of the 12 Most Important Financial Metrics and KPIs" (PDF),
http://kpi-examples.blogspot.com/2017/06/key-financial-metrics-financial-kpi-financial-kpis.html.
All financial KPIs were divided by the three categories.
The first category of financial KPIs – profit measures:
– net income (net profit, net earnings);
– earnings before interest and taxes (EBIT)/ operating income
(operating profit);
– gross profit.
The second category of financial KPIs – profitability ratios:
– return on investment (ROI).
The third category of financial KPIs – liquidity ratios:
– current ratio (working capital ratio).[1]
2. Examples of Financial KPIs
Net income (net profit, net earnings)
The formula for calculating net income is:
Net income = TR – TE , (2.1)
where
TR – Total Revenue;
TE – Total Expenses.[1]
Example of calculating. Based on the consolidated statements of
income (D.1)[2]
for the fiscal years ended september 30, 2014 and 2013,
we can calculate the net income for the company Siemens AG (Table
2.1).
Table 2.1. The calculation of net income for the company Siemens AG
on the basis of the consolidated statements of income in 2013-2014
(in millions of €) 2014 2013
Revenue 71,920 73,445
Cost of sales (51,165) (53,309)
Research and development expenses (4,065) (4,048)
Selling and general administrative expenses (10,424) (10,869)
Other operating income 656 500
Other operating expenses (194) (424)
Income from investments accounted for using the
equity method, net
582 510
Interest income 1,058 947
Interest expenses (764) (784)
Other financial income (expenses), net (177) (154)
Income tax expenses (2,028) (1,634)
Income from discontinued operations, net of
income taxes
108 231
Net income 5,507 4,409
Net income = 71920000 – 51165000 – 4065000 – 10424000 + 656000 –
194000 + 582000 + 1058000 – 764000 – 177000 – 2028000 + 108000 =
€5,507 million.[1]
Source: "List of the 12 Most Important Financial Metrics and KPIs" (PDF),
http://kpi-examples.blogspot.com/2017/06/key-financial-metrics-financial-kpi-financial-kpis.html.
Return on Investment (ROI)
The formula for calculating return on investment is:
ROI = (GFI – CFI) / CFI , (2.2)
where
GFI – Gain from Investment;
CFI – Cost from Investment.[3]
The return on investment may also be calculated by dividing net
income by long-term investments (2.3) or average long-term
investments (2.4):
ROI = NI / LTI = NI / (LTD + TSE) , (2.3)
where
NI – Net income;
LTI – Long-term investments;
LTD – Long-term debt;
TSE – Total shareholder equity.
ROI = NI / ALTI = NI / ((LTDBP + LTDEP) / 2 + (SEBP +SEEP) / 2)) , (2.4)
where
NI – Net income;
ALTI – Average long-term investments;
LTDBP – Long-term debt at the beginning of a period;
LTDEP – Long-term debt at the end of a period;
SEBP – Shareholder equity at the beginning of a period;
SEEP – Shareholder equity at the end of a period.[3]
Source: "Financial KPI: Examples of Profitability Ratios",
http://kpi-examples.blogspot.com/2016/01/financial-kpi-examples-of-profitability-ratios-.html.
Current Ratio (Working Capital Ratio)
The formula for calculating current ratio is:
Current ratio = TCA / TCL , (2.5)
where
TCA – Total current assets;
TCL – Total current liabilities.[3]
Source: "Financial KPI: Examples of Liquidity Ratios",
http://kpi-examples.blogspot.com/2016/01/financial-kpi-examples-of-liquidity-ratios.html.
References
1. The KPI Examples Review, "List of the 12 Most Important Financial Metrics and KPIs",
http://kpi-examples.blogspot.com/2017/06/key-financial-metrics-financial-kpi-financial-kpis.html.
2. Siemens AG, "Siemens Annual Report 2014, Consolidated Financial Statements",
https://www.siemens.com/annual/14/en/download/pdf/Siemens_AR2014_ConsolidatedFinanci
alStatements.pdf.
3. The KPI Examples Review, "List of KPIs for Finance Department: KPI of Finance
Department, What is Financial Metrics and Financial KPI, Formulas of KPI, Finance, Examples
of Financial KPIs, List, Finance, KPIs, Examples",
http://kpi-examples.blogspot.com/2017/06/kpis-for-finance-department-kpi.html.
"List of the 12 Most Important Financial Metrics and
KPIs" (eBook)
In this report we define the 12 most important financial metrics
and KPIs based on web search data in 2015. All financial KPIs were
divided by the six categories of indicators: profit measures, cash
flow measures, profitability ratios, liquidity ratios, solvency ratios
and capital market ratios (Chapter 1).
For each of the key financial metrics were defined their
popularity in different countries, their formulas and calculation
examples (Chapter 2). In all our calculations we used the official
financial statements of Siemens AG for the fiscal years ended
september 30, 2014 and 2013, namely the consolidated statements
of income (D.1), financial position (D.3), cash flows (D.4), changes
in equity (D.5), notes to consolidated financial statements (D.6).
"List of the 12 Most Important Financial Metrics and KPIs" (PDF) presented on the web
page:
http://kpi-examples.blogspot.com/2017/06/kpis-for-finance-department-kpi.html.

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Examples of KPIs for Finance Department: KPI of Finance Department, What is Financial Metrics and Financial KPI, Formulas of KPI, Finance, Examples of Financial KPIs, List, Finance, KPIs, Examples

  • 1. Examples of KPIsExamples of KPIs for Finance Departmentfor Finance Department The KPI Examples ReviewThe KPI Examples Review Copyright 2017 The KPI Examples Review. http://kpi-examples.blogspot.com/.
  • 2. Introduction In this report we define the key performance indicators for finance department based on web search data in 2015. For some of the key performance indicators were defined their formulas and calculation examples. In all our calculations we used the official financial statements of Siemens AG.
  • 3. 1. List of the 5 KPIs for Finance Department Based on the web search data in 2015, we define the 5 financial KPIs used to measure a company's performance: 1). Net income (net profit, net earnings); 2). Earnings before interest and taxes (EBIT)/ operating income (operating profit); 3). Gross profit; 4). Current ratio (working capital ratio); 5). Return on investment (ROI).[1] Source: "List of the 12 Most Important Financial Metrics and KPIs" (PDF), http://kpi-examples.blogspot.com/2017/06/key-financial-metrics-financial-kpi-financial-kpis.html.
  • 4. All financial KPIs were divided by the three categories. The first category of financial KPIs – profit measures: – net income (net profit, net earnings); – earnings before interest and taxes (EBIT)/ operating income (operating profit); – gross profit. The second category of financial KPIs – profitability ratios: – return on investment (ROI). The third category of financial KPIs – liquidity ratios: – current ratio (working capital ratio).[1]
  • 5. 2. Examples of Financial KPIs Net income (net profit, net earnings) The formula for calculating net income is: Net income = TR – TE , (2.1) where TR – Total Revenue; TE – Total Expenses.[1] Example of calculating. Based on the consolidated statements of income (D.1)[2] for the fiscal years ended september 30, 2014 and 2013, we can calculate the net income for the company Siemens AG (Table 2.1).
  • 6. Table 2.1. The calculation of net income for the company Siemens AG on the basis of the consolidated statements of income in 2013-2014 (in millions of €) 2014 2013 Revenue 71,920 73,445 Cost of sales (51,165) (53,309) Research and development expenses (4,065) (4,048) Selling and general administrative expenses (10,424) (10,869) Other operating income 656 500 Other operating expenses (194) (424) Income from investments accounted for using the equity method, net 582 510 Interest income 1,058 947 Interest expenses (764) (784) Other financial income (expenses), net (177) (154) Income tax expenses (2,028) (1,634) Income from discontinued operations, net of income taxes 108 231 Net income 5,507 4,409
  • 7. Net income = 71920000 – 51165000 – 4065000 – 10424000 + 656000 – 194000 + 582000 + 1058000 – 764000 – 177000 – 2028000 + 108000 = €5,507 million.[1] Source: "List of the 12 Most Important Financial Metrics and KPIs" (PDF), http://kpi-examples.blogspot.com/2017/06/key-financial-metrics-financial-kpi-financial-kpis.html.
  • 8. Return on Investment (ROI) The formula for calculating return on investment is: ROI = (GFI – CFI) / CFI , (2.2) where GFI – Gain from Investment; CFI – Cost from Investment.[3] The return on investment may also be calculated by dividing net income by long-term investments (2.3) or average long-term investments (2.4): ROI = NI / LTI = NI / (LTD + TSE) , (2.3) where
  • 9. NI – Net income; LTI – Long-term investments; LTD – Long-term debt; TSE – Total shareholder equity. ROI = NI / ALTI = NI / ((LTDBP + LTDEP) / 2 + (SEBP +SEEP) / 2)) , (2.4) where NI – Net income; ALTI – Average long-term investments; LTDBP – Long-term debt at the beginning of a period; LTDEP – Long-term debt at the end of a period; SEBP – Shareholder equity at the beginning of a period; SEEP – Shareholder equity at the end of a period.[3] Source: "Financial KPI: Examples of Profitability Ratios", http://kpi-examples.blogspot.com/2016/01/financial-kpi-examples-of-profitability-ratios-.html.
  • 10. Current Ratio (Working Capital Ratio) The formula for calculating current ratio is: Current ratio = TCA / TCL , (2.5) where TCA – Total current assets; TCL – Total current liabilities.[3] Source: "Financial KPI: Examples of Liquidity Ratios", http://kpi-examples.blogspot.com/2016/01/financial-kpi-examples-of-liquidity-ratios.html.
  • 11. References 1. The KPI Examples Review, "List of the 12 Most Important Financial Metrics and KPIs", http://kpi-examples.blogspot.com/2017/06/key-financial-metrics-financial-kpi-financial-kpis.html. 2. Siemens AG, "Siemens Annual Report 2014, Consolidated Financial Statements", https://www.siemens.com/annual/14/en/download/pdf/Siemens_AR2014_ConsolidatedFinanci alStatements.pdf. 3. The KPI Examples Review, "List of KPIs for Finance Department: KPI of Finance Department, What is Financial Metrics and Financial KPI, Formulas of KPI, Finance, Examples of Financial KPIs, List, Finance, KPIs, Examples", http://kpi-examples.blogspot.com/2017/06/kpis-for-finance-department-kpi.html.
  • 12. "List of the 12 Most Important Financial Metrics and KPIs" (eBook) In this report we define the 12 most important financial metrics and KPIs based on web search data in 2015. All financial KPIs were divided by the six categories of indicators: profit measures, cash flow measures, profitability ratios, liquidity ratios, solvency ratios and capital market ratios (Chapter 1). For each of the key financial metrics were defined their popularity in different countries, their formulas and calculation examples (Chapter 2). In all our calculations we used the official financial statements of Siemens AG for the fiscal years ended september 30, 2014 and 2013, namely the consolidated statements of income (D.1), financial position (D.3), cash flows (D.4), changes in equity (D.5), notes to consolidated financial statements (D.6). "List of the 12 Most Important Financial Metrics and KPIs" (PDF) presented on the web page: http://kpi-examples.blogspot.com/2017/06/kpis-for-finance-department-kpi.html.