The 8 Key Performance Indicators Investors Should Track
KPIs, or key performance indicators, are metrics that businesses use to measure their success and progress towards their goals. These metrics can be used to track everything from sales and revenue to customer satisfaction and employee performance.
When it comes to investors, there are a few KPIs that are particularly important to pay attention to. These include:
- Revenue growth: This KPI measures the increase in a company's revenue over a period of time. Investors want to see that a company is growing and generating more money.
- Net income: This KPI measures a company's profitability, taking into account all expenses and taxes. Investors want to see that a company is profitable and able to generate income for shareholders.
- Return on equity (ROE): This KPI measures the amount of profit a company generates in relation to the amount of money shareholders have invested. Investors want to see that a company is using their money effectively and generating a good return on their investment.
- Earnings per share (EPS): This KPI measures the amount of profit a company generates per share of stock. Investors want to see that a company is generating a good return for each share of stock they own.
- Debt-to-equity ratio: This KPI measures the amount of debt a company has in relation to the amount of equity (i.e. the amount of money shareholders have invested). Investors want to see that a company is not taking on too much debt and that they are able to pay it back.
- Customer satisfaction: This KPI measures the level of satisfaction that customers have with a company's products or services. Investors want to see that a company is providing value to their customers and that they are happy with the company's offerings.
- Market share: This KPI measures the percentage of a market that a company controls. Investors want to see that a company is competitive in their industry and has a strong position in the market.
- Employee retention: This KPI measures the rate at which employees stay with a company. Investors want to see that a company is able to retain its talented workforce and that they are creating a positive work environment.
By keeping an eye on these KPIs, investors can get a better sense of a company's overall health and potential for growth. By having a better understanding of company's KPI's, investors can make more informed decisions about where to invest their money.
In conclusion, KPIs are an important tool for businesses to measure their performance and progress towards their goals, while investors can use them to evaluate the health and growth potential of a company. By understanding which KPIs are most important for investors to pay attention to, you can gain a better understanding of a company's financial health and make more informed investment decisions.