March 1st, 2021
Assignment: KPI’s-Key Performance Indicators
Date Due: March 22,2021-Submitted to profhier@gmail.com
Your assignment is the following:
1) Explain the definition of a Key Performance Indicator (KPI). What makes a useful KPI?
2) List 9 specific key performance indicators that a CFO might use to evaluate the past results or use to evaluate estimated future performances.
a. A minimum of 4 of the KPIs must not use only financial data but must include some operational data. For example, the numerator and denominator can be the following:
1. Both financial data (max 5)
2. One can be non-financial and the other financial
3. Both can be non-financial
4. One KPI does not have to have a numerator or denominator (# of lost customers or EBITDA)
b. Make sure for each KPI you explain briefly what the KPI measures and why you feel as CFO that this can be a key performance indicator.
Example: HOSPITAL ROOM UTILIZATION KPI
Patient days/available patient days or 80 beds used on average for the year =29,200 patient days divided by 100 beds available or 36,500 available days = 80% utilization.
This measures the % of patient rooms being used during a given period (mth). A decrease in the utilization means a lower return on assets and less operating profit. Assune that the operating profit breakeven point is 70% utilization.
c. Make sure you list the industry that you are using for your KPIs.
(An idea is to use the company you work for or had worked for and assume that you are the CFO of that company Assume that you are creating KPIs for your actual company.
You do not have to tell me the company name but only the industry so I can make sense of your KPIs and make sure it is relevant to that industry.)
3) Make sure you list references as usual.
There are NO minimum words-you will be graded based you following the above 3 listed requirements and the overall quality of your work.
Professor R. Hierbaum
