How To - Use Key Performance Indicators (KPI)



KPI stands for Key Performance Indicators.

They are statistics of a business which are measured against other stats. They permit the performance of the business to be compared to the performance of other businesses thereby highlighting where the business is weak or where it is strong.

KPI’s allow comparisons which show the business owners the areas that present opportunities to be explored or procedures that need improvement in order to increase efficiencies or profitability.

KPI’s is measure or benchmark that sets up your business performance or your systems against those of other businesses. This comparison results in finding out how your business lines up with others in order to indicate where you are strong or where it is weak and what to do about the assessment results.

One of the areas that contribute to your business review involves your business’s ratios. These ratios show easily defined figures and percentages that tell a story in a financial language and that can be converted to data requiring some action.

 


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