10 Financial Performance Measures for 2025

Here’s the situation: the job of a CFO continues to evolve alongside technology. Regardless of any innovation in automation and artificial intelligence, there are critical financial performance measures that will remain of constant concern for financial operations, such as cash flow, current ratio and the like. 

However, how these key performance indicators (KPIs) are tracked have been made more accessible, thanks to big data and automation. This is allowing CFOs and financial leaders to spend more time doing what they do best - using analysis to make better decisions and help organisations optimise their strategies. 

Despite the advents in automation software that can manage repetitive day-to-day tasks and track KPIs, a survey by PwC found that 56% of respondents are still using manual processes and spreadsheets to keep track of performance indicators. 

But, as organisations incorporate automation solutions, they quickly realise the benefits of doing so. As such, adoption rates are climbing, and financial teams are maximising their performance. 

Coming Up

1. What Are Financial Performance Measures?

2. What is Financial Statement Analysis?

3. What Are the Types of Financial Statements?

4. Which KPIs are the Best to Measure?

5. Automation Solutions: Taking KPIs to the Next Level

6. The Bottom Line

What Are Financial Performance Measures?

It won’t come as news to you that financial performance is a way to measure your company’s overall health. Understanding essential financial performance was the first step that led you to where you are. 

But now, there are ways that technology can take everything you need and deliver it to you seamlessly. 

First, we will review some of the primary key performance indicators (KPIs) that you should be tracking. Then, we will see how automation software can change how you review, measure and track these indicators. 

KPIs for Business Success

1. Operating Cash Flow: Knowing how much cash you have on hand lets you know that you can pay for operating expenses and incoming inventory. Beyond how your business is functioning today, you can use operating cash flow in comparison to capital investments to see how you can move your business forward. 

2. Current Ratio: This is the ratio between your assets over your liabilities. It allows you to understand solvency and ensure that you have a good enough credit rating to expand. 

3. Debt to Equity Ratio: Your business has likely relied on investors and shareholders with a stake in your overall financial health. To make sure that you can protect their investment, you want to regularly check in with your total liabilities against your shareholder’s equity. To remain transparent and be held accountable, it’s a KPI that your shareholders will want to stay abreast of. Automation technology makes it easy to share reports with all those who need to see them automatically.

4. Days Sales Outstanding: DSO defines the average sales collection period. This KPI is not only useful to you as CFO, but your whole team can also use it to understand how to incentivise people to pay faster. Your marketing and sales team should be aware of this KPI always, especially when introducing new campaigns. This is why it’s essential to have accessible dashboards, so every team member can pull insights they need for their own decisions that will affect the business’ bottom line. 

5. Working Capital: If you subtract your current liabilities from your existing assets, you have your working capital. This will let you know if you have what you need to take care of short-term liabilities. 

6. Accounts Payable Turnover: Your cash flow is affected by when and how many times you pay vendors. This is known as your accounts payable turnover. 

7. Accounts Receivable Turnover: Going hand-in-hand with accounts payable turnover is accounts receivable turnover, or how often you collect money that is owed. It may be the case that you are running into issues raising money, and that will affect your cash flow. To better understand if your business process is right or if you may need business process improvement, you should regularly monitor this situation with the help of automated means. 

8. Inventory Turnover: By dividing your current average sales by your current average inventory in the same period, you get an idea of your inventory turnover. You don’t want to hold too much inventory as a liability, nor do you want to be short to satiate consumer demand. 

9. Return on Equity: Comparing your net income to each unit of shareholder equity lets you understand whether or not your net income is appropriate for your business’ size. Not only does it inform you about profitability, but it also gives insight into how efficient you’re financially managing the business. When you improve your ROE, you are signalling that you’re making the right decisions with shareholders’ capital. 

10. Customer Satisfaction: Although this is not a direct financial measure, the KPI of customer satisfaction can be gleaned by calculating customer responses from surveys. This can be done by quantifying satisfaction on a numerical scale and using the Net Promoter Score (NPS). High satisfaction is indicative of retention. And, as you know, it costs more to acquire a new customer than it does to retain an existing one. 

11. Gross Profit Margin: This ratio measures the percentage of revenue remaining after the cost of goods sold (COGS) has been subtracted, providing a snapshot of profitability. A high gross profit margin indicates strong pricing power and cost control, making it easier to cover operating expenses and generate net profits.

12. Net Profit Margin: Net profit margin takes the analysis a step further by showing the percentage of revenue left after all expenses, taxes, and interest have been deducted. It highlights the efficiency of a company in managing both its operating and non-operating costs, revealing its true profitability.

13. Quick Ratio: Often referred to as the "acid-test" ratio, the quick ratio gauges a company's ability to meet short-term liabilities using its most liquid assets (excluding inventory). A high quick ratio signifies strong liquidity, indicating that the company can cover its immediate obligations without depending on inventory sales.

14. Leverage: Leverage assesses the extent to which a company uses debt to finance its assets. High leverage can amplify returns during profitable periods but also increases risk during downturns. It is a crucial indicator of financial risk, showing the balance between debt and equity in a company's capital structure.

15. Total Asset Turnover Ratio: This ratio measures how efficiently a company uses its assets to generate sales. A high total asset turnover ratio indicates effective asset management, as the company is maximizing the revenue generated per dollar of assets owned.

16. Return on Assets (ROA): ROA provides insight into how effectively a company is utilizing its assets to produce profit. Calculated by dividing net income by total assets, this metric reveals how well management is using the company’s resources to drive profitability.

17. Seasonality: Seasonality assesses fluctuations in financial performance due to recurring seasonal factors, such as holiday sales spikes. Understanding seasonality helps companies adjust their financial strategies, inventory management, and cash flow planning to meet demand cycles and maintain stable performance year-round.

What is Financial Statement Analysis?

Financial statement analysis is the systematic review of your company’s financial documents—such as the income statement, balance sheet, and cash flow statement—to assess financial performance and stability. By examining key metrics like profitability, liquidity, and leverage, you can identify trends, evaluate efficiency, and uncover risks. 

Financial statement analysis aids your company in strategic decision-making, helping your finance team, stakeholders and investors understand financial strengths and weaknesses, optimize performance, and anticipate future needs. Regular analysis is crucial for achieving sustainable growth and maintaining competitive advantage.

What Are the Types of Financial Statements?

Financial statements are critical documents that provide a snapshot of a company's financial health, guiding informed business and investment decisions. Key types include:

1. Balance Sheet Statement: The balance sheet presents your company’s assets, liabilities, and shareholder equity at a specific point in time. It highlights your company’s net worth by showing what it owns versus what it owes, offering insights into financial stability and leverage.

2. Income Statement: Often referred to as the profit and loss statement, the income statement tracks revenue, expenses, and net income over a given period. This statement reveals your company’s profitability and helps assess operational efficiency by showing how your revenue translates into net profit.

3. Cash Flow Statement: The cash flow statement reports on cash inflows and outflows across operating, investing, and financing activities. It shows how effectively your company generates and uses cash, helping stakeholders understand liquidity and cash management.

4. Annual Report: An annual report is a comprehensive document that includes financial statements, management insights, and operational highlights. It serves as a detailed review of your company’s financial performance, strategies, and market position over the past year, offering a holistic view to your shareholders and investors.

Which KPIs are the Best to Measure?

Not all KPIs are created equally. Determining the best ones for your business relies on aligning what you measure to your business goals. 

To determine this, you should consider where your business currently stands and its future strategy (i.e. have you created products yet? Are you expanding? Downsizing? etc.). Then, you’ll want to make sure that you have both leading and lagging indicators to measure performance. 

Lagging inputs look back at your history and past data, such as sales per month. Leading indicators help measure where you are headed, such as conversion rates — this type of information benefits alongside predictive analytics. ‍

Using big data, your business can automate its usage of KPIs to predict the future before you make big decisions. 

Automation Solutions: Taking KPIs to the Next Level 

With the adoption of automation technology, you can alleviate the burden of disparate spreadsheets and manual reporting. It can connect with all your legacy systems and current data systems to consolidate, clean, and map data in one easy to use the tool. 

In most instances, your entire team needs to be highly communicative and share information properly to produce accurate KPIs. But, what happens when there’s a bottleneck, a breakdown in communication, or when a key team member is out of office? 

From human error to siloed data, your business can suffer at the hands of avoidable mistakes. By implementing automation software, everyone who needs access to data can have a secure set up where they can access whatever they need, whenever they need it. 

The first benefit is that automation software is it can store all your data in a centralised location. Therefore, the more information you have, the better your reporting can be. Furthermore, it promotes accessibility and an internal system of checks and balances that help alleviate risk compliance. Software solutions like SolveXia offer you with real-time analytics and dashboards that effortlessly combine data sources to produce KPI dashboards. 

Imagine having everything you need including all your financial performance measures in an easy-to-use dashboard that updates itself.

The Bottom Line 

Your business’ longevity comes down to the decisions you make today. These decisions should be based on hard facts, that is, numbers and data. By ensuring you have accurate and complete data (with automation software), you can take the process further by automating reports. You can leverage real-time dashboards to monitor KPIs and see how decisions immediately affect your bottom line. 

Tools like SolveXia can make sure that you are correctly accessing and managing all your KPIs 24/7, with minimal effort, and with real-time data.