Efficiency KPIs measure how effectively a business uses its assets and resources to generate sales or returns. These indicators highlight operational productivity and asset utilisation across the group.
| KPI Name | Formula | Description / Interpretation |
|---|---|---|
| Asset Turnover | Revenue ÷ Average Total Assets | Measures how efficiently total assets generate sales. Higher ratios indicate stronger utilisation. |
| Inventory Turnover | Cost of Goods Sold ÷ Average Inventory | Shows how often inventory is sold and replaced during a period. A higher ratio implies better inventory management. |
| Receivables Turnover | Revenue ÷ Average Trade Receivables | Indicates how quickly receivables are collected. Low turnover may suggest collection issues. |
| Payables Turnover | Cost of Goods Sold ÷ Average Trade Payables | Reflects how quickly the company pays its suppliers. Lower ratios indicate longer payment terms. |
| Working Capital Turnover | Revenue ÷ Working Capital | Measures efficiency in using working capital to support sales. |
| Fixed Asset Turnover | Revenue ÷ Average Fixed Assets | Evaluates how well fixed assets are used to generate revenue. |
Notes
- Average balances are calculated from opening and closing figures.
- Efficiency KPIs are most meaningful when compared across periods or business units.
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