What is Key performance indicators (KPI)?

A key performance indicator is a measure of a company's performance that is considered to be critical to its success.

Key performance indicators are tools used to assess a company’s financial performance. It is commonly used to compare two or more businesses or the market, as well as to make managerial decisions.

Gross profit, net profit, and turnover are essential KPIs for any company. It is also used to establish the goal for future accounting periods. It is typically calculated using financial and reporting tools such as ROI, NPV, ratio analysis, and so on.

KPIs are a tool for making strategic business decisions. It can be useful in determining how to reduce overheads, increase sales, HR decisions, and marketing policies at all levels. It is a kind of business health check. With the help of KPIs, you can create a solid plan for business growth and determine which strategies are not working for your company. Process focus or customer-oriented KPIs can also be used to calculate performance at different levels.

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