KPI
Key Performance Indicator - a measurable value of business performance.
Key Performance Indicators are quantifiable metrics that reflect how effectively a business is achieving its objectives. Good KPIs are specific, measurable, achievable, relevant, and time-bound (SMART). Financial KPIs include revenue growth rate, profit margin, and cash conversion cycle. Operational KPIs include customer acquisition cost, customer lifetime value, and employee productivity.
Example
A SaaS company tracks five core KPIs: monthly recurring revenue ($85,000), churn rate (3.2%), customer acquisition cost ($450), average revenue per user ($170), and net promoter score (42).
Why It Matters for Your Business
What gets measured gets managed—tracking the right KPIs focuses your team on what matters most and provides early warning when performance slips.
Practical Tips
- •Limit your core KPI dashboard to 5–7 metrics to maintain focus.
- •Review KPIs weekly with your team to drive accountability and quick course corrections.
More Business Terms
Accounts Reconciliation
Ensuring account balances match between different records.
Break-Even Point
The sales volume at which revenue equals costs.
Budget
A financial plan estimating income and expenses.
Financial Forecast
A prediction of future financial performance.
Capital Expenditure
Funds used to acquire or upgrade physical assets.
Related Financial Guides & Resources
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