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Finance Metrics
The most important Finance metrics and KPIs. Learn about what metrics and KPIs are best for you, vote, and contribute your own.
Cost Per Hire
Cost Per Hire is a fundamental recruiting metric, that helps Human Resource professionals budget, calculate a return on their effort, and understand how effective their employee brand is when recruiting talent. Cost Per Hire is defined as the internal and external costs required to hire a new employee.
Cost Per Lead
Cost per Lead (CPL) is the average amount spent on acquiring a new lead, inclusive of all marketing channels such as paid advertising, social media campaigns, and content marketing. Cost per Lead (CPL) is a crucial metric that helps businesses measure their marketing campaigns' effectiveness in generating leads. CPL is calculated by dividing the total cost of acquiring new leads by the number of leads generated. This metric is particularly valuable for businesses that want to optimize their marketing spend to maximize return on investment (ROI). Marketing teams can segment CPL by channel. For instance, they may focus on paid advertising and consider only the inputs relating to paid ad costs and leads generated. It's important to always include the right costs in your equation, especially if salaries, creatives, or equipment are the main drivers.
Current Assets
Current assets reflect a company’s assets on the Balance Sheet or Statement of Financial Position and are easily liquidated or converted to cash within one year. Companies often use current assets in conjunction with current liabilities to calculate different liquidity ratios. Some common accounts that fall under current assets are cash and cash equivalents, accounts receivable, prepaid expenses, trade receivable, and many others depending on industry.
Current Liabilities
Current liabilities reflect a company’s short term debt on the Balance Sheet or Statement of Financial Position. This debt is short term and must be paid within a year. It's important for a company to identify current liabilities in order to understand their financial solvency, often this is done in conjunction with current assets. Some common accounts that fall under current liabilities are accounts payable, deferred revenue, interest payable, short-term debt, dividend payable, and many others depending on industry.
Current Ratio
Current Ratio measures the ability of your organization to pay all of their financial obligations in the short term, which is generally one year. This ratio accounts for your current assets, such as accounts receivable, and your current liabilities, such as accounts payable, to help you understand the solvency of your business.
Customer Acquisition Cost
Customer Acquisition Cost (CAC) is the cost a business incurs to acquire a new customer. This includes the fully loaded costs associated with sales and marketing to attract a potential customer and to convince them to purchase, divided across all new customers.
Customer Acquisition Cost Ratio
CAC Ratio is a measure of sales and marketing efficiency.
Customer Concentration
Customer Concentration is the percentage of your revenue that comes from a single client.
Customer Lifetime Value
The Customer Lifetime Value (LTV) metric indicates the total revenue a business can reasonably expect from a single customer account. It considers a customer's revenue value and compares that number to the company's predicted customer lifespan. Businesses use this metric to identify their most valuable customer segments.
DAU Growth Rate
DAU Growth Rate is the increase in Daily Active Users over a period of time, typically represented in a percentage. It can be a good indicator of successful sales and marketing efforts, as well as an indicator of good product-market fit.
Debt to Equity Ratio
The Debt to Equity Ratio measures how your organization is funding its growth and how effectively you are using shareholder investments. A high Debt to Equity Ratio is evidence of an organization that’s fuelling growth by accumulating debt. This is a common practice, as outside investment can greatly increase your ability to generate profits and accelerate business growth. Reaching too far, however, can backfire and leave the company bankrupt. As such, a high Debt to Equity Ratio is often interpreted as a sign of risk.
Deviation from Target Churn Rate
Deviation from Target Churn measures how close or far away you are from hitting your ideal target churn rate in a specific time period. It is calculated by finding the difference between the forecasted churn rate and the target churn rate.