Key Performance Indicators - KPI

AAA

DEFINITION of 'Key Performance Indicators - KPI'

A set of quantifiable measures that a company or industry uses to gauge or compare performance in terms of meeting their strategic and operational goals. KPIs vary between companies and industries, depending on their priorities or performance criteria. Also referred to as "key success indicators (KSI)".

INVESTOPEDIA EXPLAINS 'Key Performance Indicators - KPI'

A company must establish its strategic and operational goals and then choose the KPIs which best reflect those goals. For example, if a software company's goal is to have the fastest growth in its industry, its main performance indicator may be the measure of revenue growth year-on-year. A company's KPIs will be stated in its annual report. Also, KPIs will often be industry-wide standards, like "same store sales", in the retail sector.

RELATED TERMS
  1. Earnings Per Share - EPS

    The portion of a company's profit allocated to each outstanding ...
  2. Operating Income

    The amount of profit realized from a business's operations after ...
  3. Sales Per Share

    A ratio that computes the total revenue earned per share over ...
  4. Same-Store Sales

    A statistic used in retail industry analysis that compares the ...
  5. Revenue

    The amount of money that a company actually receives during a ...
  6. Profit Margin

    A ratio of profitability calculated as net income divided by ...
Related Articles
  1. Industry Handbook
    Investing Basics

    Industry Handbook

  2. Introduction To Fundamental Analysis
    Markets

    Introduction To Fundamental Analysis

  3. Capital Structure
    Investing

    Capital Structure

  4. Variable Costs
    Investing

    Variable Costs

comments powered by Disqus
Hot Definitions
  1. Repurchase Agreement - Repo

    A form of short-term borrowing for dealers in government securities.
  2. Correlation

    In the world of finance, a statistical measure of how two securities move in relation to each other. Correlations are used ...
  3. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  4. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  5. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  6. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
Trading Center