Financial performance evaluation index refers to some indicators used to measure and evaluate the financial performance of enterprises, including inventory turnover, quick ratio, current ratio, cost ratio and so on.

Financial performance indicators can comprehensively express the enterprise in the effect of cost control, the effect of asset utilization and management, the effect of the deployment of sources of funds and the composition of the rate of return on shareholders' equity. Specifically include: financial leverage; quick ratio; accounts receivable turnover, inventory turnover, operating income growth rate; cost ratio, sales expense ratio, financial expense ratio, net interest rate, return on total assets and return on shareholders' equity.

Role:

Measurement of the operating ability of the enterprise, to facilitate the enterprise according to the situation of the indicators to summarize and analyze and rational planning, for the continuous operation of the enterprise to provide the basis for financial management.

Expanded Information

Specific aspects of financial performance indicators to measure the operational capacity of enterprises:

(1) Profitability. The assessment is based on the economic value added (EVA) and sales (profit) growth rate. With EVA instead of previous indicators such as return on equity, return on total assets, earnings per share, etc., the evaluation of corporate profitability better reflects the status of net capital gains and capital appreciation, is the development trend of the improvement of corporate performance evaluation indicators. The sales revenue (profit) growth rate indicator is used to measure corporate growth.

(2) Operating capacity. It can promote the enterprise to strengthen the asset management, improve the efficiency of asset utilization, and enhance the profitability. The main evaluation indicators are: inventory turnover, accounts receivable turnover and fixed asset turnover.

(3) Solvency. Its strength is the main embodiment of the enterprise's economic strength and financial position, but also an important measure of the soundness of business operations. The main indicators are gearing ratio, current ratio and quick ratio.

(4) anti-risk ability. It refers to the ability of the enterprise to resist the adverse effects of various uncertainties in the operation, and can be set from the anti-operational risk and anti-financial risk indicators.

Baidu Encyclopedia-Financial Performance

Baidu Encyclopedia-Financial Performance Management