Table of Contents
Preface VII
Introduction 1
1 Basic Indicators 5
1.1 Technical Productivity 5
1.2 Efficiency 7
1.3 Economic Efficiency 9
1.4 Profitability 10
1.5 Turnover Rate 12
1.6 Elasticity 14
1.7 Compound Annual Growth Rate (CAGR) 16
2 Financial Perspective 21
2.1 Profit Indicators 21
2.1.1 Earnings before Taxes (EBT) 21
2.1.2 Earnings before Interest and Taxes (EBIT) 23
2.1.3 Earnings before Interest, Taxes and Amortization (EBITA) 25
2.1.4 Result from Continued Operations 28
2.1.5 Result from Discontinued Operations 30
2.1.6 Non-periodic income 31
2.1.7 Net Operating Profit After Taxes (NOPAT) 33
2.2 Profitability indicators 34
2.2.1 EBIT-Turnover-Yield 34
2.2.2 Return On Sates (ROS) 36
2.2.3 Return On Equity (ROE) 38
2.2.4 Return On Assets (ROA) 40
2.2.5 Earnings Per Share (EPS) 41
2.2.6 Return On Investment (ROI) 43
2.2.7 Return On Invested Capital (ROIC) 46
2.2.8 Return On Capital Employed (ROCE) 48
2.2.9 Return On Net Assets (RONA) 50
2.2.10 Risk Adjusted Return On Capital (RAROC) 52
2.2.11 Cost-Income Ratio (CIR) 53
2.3 Liquidity Indicators 54
2.3.1 Cash Ratio 54
2.3.2 Quick Ratio 56
2.3.3 Current Ratio 57
2.3.4 Working Capital 58
2.3.5 Cash-burn Rate 59
2.4 Tests of Solvency 60
2.4.1 Debt-to-Equity Ratio 60
2.4.2 Debt-to-Cash Ratio 62
2.4.3 Interest Coverage Ratio 64
2.4.4 Debt Service Coverage Ratio (DSCR) 66
2.4.5 Bankruptcy Prediction Score 68
2.5 Cash Flow Measures 71
2.5.1 Cash Flow 71
2.5.2 Gross or Net Cash Flow 74
2.5.3 Free Cash Flow (FCF) 76
2.5.4 Operating Cash Flow (OCF) 77
2.5.5 Cash Flow at Risk (CFaR) 79
2.5.6 Earnings before interest, Taxes, Depreciation and Amortization (EBITDA) 81
2.6 Cash Flow Ratios 84
2.6.1 Cash Flow Margin 84
2.6.2 Cash Flow Return On Investment (CFROI) 85
2.6.3 Cash Flow Return On Equity (CFROE) 87
2.6.4 EBITDA-Turnover-Yield 88
2.7 Financial Structure Indicators 90
2.7.1 Equity-To-Fixed-Assets Ratio (Level I) 90
2.7.2 Equity-To-Fixed-Assets Ratio (Level II) 92
2.7.3 Equity-To-Fixed-Assets Ratio (Level III) 93
2.7.4 Equity Ratio 95
2.7.5 Financial Leverage Index 97
2.7.6 Cost and Revenue Structure related Ratios 99
2.7.7 Provisions Rate 101
2.8 Efficiency Ratios 104
2.8.1 Average Collection Period 104
2.8.2 Average Payment Period 106
2.8.3 Cash-to-Cash Cycle 108
2.8.4 Asset Turnove Ratio 109
2.8.5 Asset Coverage Period 111
2.8.6 Accumulated Depreciation to Fixed Assets Ratio 112
2.9 Value Based Management (VBM) 114
2.9.1 Cash Value Added (CVA) 114
2.9.2 Economic Profit (EP) 116
2.9.3 Economic Value Added (EVA) 117
2.9.4 Weighted Average Cost of Capital (WACC) 119
2.9.5 Value at Risk (VaR) 121
2.10 Capital Market Tests 123
2.10.1 Market-to-Book Ratio 123
2.10.2 Stock Yield 125
2.10.3 Dividend Yield 126
2.10.4 Price-Earnings Ratio (P/E Ratio) 128
2.10.5 Price-To-Cash Flow Ratio 129
2.10.6 Cash Flow per Share 131
2.11 Capital Budgeting Tests 133
2.11.1 Payback Period 133
2.11.2 Time Adjusted or Discounted Payback Period 134
2.11.3 Net Present Value 136
2.11.4 Profitability Index 138
2.12 Finance-related Ecological Indicators 140
2.12.1 Resource Efficiency 140
2.12.2 Sustainable Value 142
2.12.3 Disposal Costs Ratio 146
3 Customer Perspective 149
3.1 Customer Relationship Management (CRM) 149
3.1.1 Customer Acquisition Rate 149
3.1.2 Customer Churn Rate 150
3.1.3 Customer Retention Period 152
3.1.4 Customer Significance Level 154
3.1.5 Cross-Selling Ratio 155
3.1.6 Customer Lifetime Value (CLV) 156
3.1.7 Customer Satisfaction Index 158
3.1.8 Customer Complaint Ratio 161
3.1.9 Flop Rate 163
3.2 Marketing Communication Indicators 165
3.2.1 Media Coverage Level 165
3.2.2 Click Through Rate (CTR) 166
3.2.3 Conversion Rate 167
3.2.4 Usage Intensity of Internet-based Media 169
3.2.5 Cost per Thousand 171
3.2.6 Brand Awareness Level 173
3.3 Product Pricing 174
3.3.1 Profit Margin 174
3.3.2 Gross Margin 176
3.3.3 Absolute Contribution Margin 178
3.3.4 Percentage Contribution Margin 180
3.3.5 Price Reduction Rate 182
3.3.6 Price Elasticity of Demand (PEoD) 183
3.4 Cost-Profit-Volume Analysis 185
3.4.1 Breakeven Point (BEP) 185
3.4.2 Margin of Safety 186
3.4.3 Margin of Safety Factor 188
3.4.4 Cash Point 189
3.5 Market Coverage Indicators 191
3.5.1 Internationalization Level 191
3.5.2 Distribution Coverage Level 194
3.5.3 Customer Coverage Ratio 195
3.5.4 Market Saturation Level 197
3.6 Market Position Indicators 198
3.6.1 Absolute Market Share 198
3.6.2 Relative Market Share 200
3.6.3 Bid Acceptance Rate 201
3.7 Sales Efficiency Indicators 203
3.7.1 Sales per Reference Parameter 203
3.7.2 Contribution Margin per Reference Parameter 205
3.7.3 Sales Space Productivity 207
3.7.4 Capacity Coverage Ratio 209
3.7.5 Book-to-Bill Ratio 210
3.7.6 Finished Goods Turnover Period 211
3.8 Customer-related Ecological Indicators 213
3.8.1 Product Carbon Footprint 213
3.8.2 Emission Volume of Usage-related Pollutants 216
3.8.3 Product-related Recyclability Rate 218
4 Process Perspective 221
4.1 Project Controlling 221
4.1.1 Schedule Performance Index (SPI) 221
4.1.2 Cost Performance index (CPI) 222
4.1.3 Time Estimation at Completion (TEAC) 224
4.1.4 Estimate at Completion (EAC) 225
4.1.5 To-Complete-Performance Index (TCPI) 227
4.1.6 Process Acceleration Costs 228
4.2 Quality Controlling 230
4.2.1 Quality Rate 230
4.2.2 Rejection Rate 231
4.2.3 Follow-up Costs Ratio 233
4.2.4 Conformity Costs Ratio 234
4.2.5 Non-Conformity Costs Ratio 236
4.3 Supply Chain Management 238
4.3.1 Procurement Efficiency Ratio 238
4.3.2 Supplier-Audit Ratio 240
4.3.3 Supply Chain Cycle Time 242
4.3.4 Faulty Incoming Delivery Rate 244
4.3.5 Faulty Outgoing Delivery Rate 245
4.3.6 Vertical Integration Level 247
4.3.7 Supplier's Service Level 249
4.3.8 Cooperation Index 250
4.4 Production Capacity Management 252
4.4.1 Plant Availability 252
4.4.2 Plant Downtime Rate 253
4.4.3 Maintenance Cost Intensity 255
4.4.4 Capacity Utilization Level 256
4.4.5 Contribution Margin per Unit of the Constrained Resource 258
4.5 Process Controlling 260
4.5.1 Throughput Time (TPT) 260
4.5.2 Days Inventory Outstanding (DIO) 262
4.5.3 Inventory Turnover Ratio 265
4.5.4 Material Coverage Period 268
4.5.5 Process Cost Rate 271
4.5.6 Expected Process-based Loss 272
4.5.7 Machine Hour Rate 274
4.5.8 Bottleneck-induced Incremental Costs 276
4.5.9 Cost Effectiveness of Risk Management 278
4.6 Process-related Ecological Indicators 280
4.6.1 Internally Generated C02e Emissions (Scope 1) 280
4.6.2 Indirect CO2e Emissions caused by Energy Usage (Scope 2) 283
4.6.3 Emission Volume of Production-related Pollutants 286
4.6.4 Recycling Ratio 289
5 Human Resource and Innovation Perspective 291
5.1 Personnel Cost Management 291
5.1.1 Personnel Costs Ratio 291
5.1.2 Supplementary Personnel Costs Ratio 292
5.1.3 Personnel Costs per Employee 295
5.1.4 Unit Labour Cost 296
5.2 Human Resource Controlling 298
5.2.1 Labour Productivity 298
5.2.2 Overtime Quota 300
5.2.3 Workforce Composition Ratios 302
5.2.4 Internally-staffed Executive Positions Ratio 304
5.2.5 Staff Recruitment Period 305
5.3 Human Resource Development indicators 308
5.3.1 Professional Development Training Time per Employee 308
5.3.2 Professional Development Training Costs Ratio 309
5.3.3 Human Resource Internationality Index 310
5.3.4 Ratio of Employees with Risk-aligned Remuneration Packages 313
5.3.5 Compliance Training Hours per Employee 316
5.4 Organisational Behaviour Indicators 318
5.4.1 Labour Turnover Rate 318
5.4.2 Employee Satisfaction Index 320
5.4.3 Sickness-Absenteeism Rate 323
5.4.4 Accident Occurrence Rate 324
5.4.5 Participation Rate in Ideas Management 326
5.5 Innovativeness 327
5.5.1 Innovation Rate 327
5.5.2 Research and Development Intensity (R&D Intensity) 329
5.5.3 Research and Development Costs Ratio (R&D Costs Ratio) 331
5.5.4 Breakeven Time 333
5.6 Resource-related Ecological Indicators 335
5.6.1 Resource Consumption Level 335
5.6.2 Resource Consumption Reduction Rate 338
5.6.3 Energy Source Ratio 341
Appendix I Systematic Analysis of Possible Changes in Relative Ratios 345
Appendix II DuPont Ratio System 351
Appendix III Alphabetical Overview of Key Performance Indicators 353
Appendix IV Smart Key Performance Indicators at a Glance 359
Selected Bibliography (For Balanced Scorecard Approach) 363
Index 367
