Financial Performance


DEFINITION of 'Financial Performance'

A subjective measure of how well a firm can use assets from its primary mode of business and generate revenues. This term is also used as a general measure of a firm's overall financial health over a given period of time, and can be used to compare similar firms across the same industry or to compare industries or sectors in aggregation.


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BREAKING DOWN 'Financial Performance'

There are many different ways to measure financial performance, but all measures should be taken in aggregation. Line items such as revenue from operations, operating income or cash flow from operations can be used, as well as total unit sales. Furthermore, the analyst or investor may wish to look deeper into financial statements and seek out margin growth rates or any declining debt.

  1. Operating Margin

    A ratio used to measure a company's pricing strategy and operating ...
  2. Cash Flow

    The net amount of cash and cash-equivalents moving into and out ...
  3. Performance Budget

    A budget that reflects the input of resources and the output ...
  4. Operating Income

    The amount of profit realized from a business's operations after ...
  5. Operating Cash Flow - OCF

    Operating Cash Flow (or OCF) is a measure of the amount of cash ...
  6. Net Income - NI

    1. A company's total earnings (or profit). Net income is calculated ...
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