Business key figure

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Financial ratio is an indicator that the assessment of companies used and from corporate data is obtained. They are used in the context of key figure systems.


As with any key figure in general, business key figures in a company should also measure a reproducible quantity, a repetitive state or process that is of business importance. Key figures refer to quantitatively measurable, important entrepreneurial facts , which are explained, illustrated and reproduced in concentrated form with the help of the key figures. They are used to identify problems, determine operational strengths and weaknesses , obtain information , control ( target / actual comparison ), document and / or coordinate important issues and relationships in the company. Key figures provide condensed information. Business key figures and key figure systems are particularly developed in trading companies , but also in industry and at credit institutions . Business indicators are partly published by the companies themselves or can be determined externally from the annual financial statements or other company data. Many key figures depend on accounting regulations , which differ internationally. A comparison of companies from different countries is therefore only possible to a limited extent.


Key figures have the task of filtering out the essentials from the flood of operational information. For optimal decisions, decision-makers need an instrument that provides them with clear and concentrated information relevant to decision-making about the most important operational issues. Business indicators must therefore perform several tasks at the same time in order to be useful for decisions.

  • Representativeness : In a company, the key figure must reflect a certain, company-typical sub-aspect and thus allow statements to be made about a population ;
  • Meaningfulness : The key figure must contain an economically meaningful statement about facts and processes in the company;
  • Goal orientation : The key figure must be able to serve a specific decision goal ;
  • Profitability : key figures must be economical and therefore be determinable without any special effort;
  • Reversibility : Key figures must be reversible, i.e. they must also be able to reflect the opposite relationship;
  • Propensity for purpose : KPIs must be suitable for solving a given task.


Depending on the number of arithmetic operations , from a methodological and statistical point of view, a rough distinction is made between absolute and relative key figures :

Absolute key figures can be analyzed over time. Developments (trends) and changes can be read off. In the analysis, it is particularly interesting to see how much the absolute key figures fluctuate or how stable they turn out to be in times of crisis. However, absolute successes do not enable company or branch comparisons. For this purpose, ratios must be formed. Meaningful relationships can be identified both in the creation and in the use of the successes. The figure opposite gives an overview of various relative key figures. Successes arise in the company's performance process. The process begins with capital (equity, debt) being collected from the capital providers. The success of the company results from the capital employed after all operational and financial activities. The resulting successes (capital gains) can be distributed to the investors. The lenders must be served primarily. Ratios of successes in relation to the payment obligations to creditors (interest and principal payments) make it clear to what extent a company is able to service its debt capital. The distribution of successes to the owners shows in which form the remaining asset growth can be distributed (distributions, share buybacks, creation of retained earnings).

Function of key figures

  • Decision-making function : Key figures form the basis for business decisions. Decision makers need information about the impact of the decisions they have made. The information should also enable the identification of risks and opportunities . In addition, key figures are kept clear. However, when aggregating the data, it should be noted that detailed information can be lost as a result. The type and presentation of the key figures are important for correct perception and interpretation by the decision-maker. These are supported in problem recognition and pattern recognition through conciseness and clarity.
  • Control function : Key figures serve to control ex ante planned and ex post achieved results. In the target / actual comparison , a planned key figure is compared with the one actually achieved. If the two do not match, the cause of the undesirable development must be determined from the deviation ( deviation analysis ).
  • Coordination function : Key figures help in the implementation of decisions, in the coordination of different business areas and their harmonization and in the documentation of facts.
  • Behavior control function : Especially in larger companies, key figures are used to induce employees to adopt certain behaviors that are desirable for the company ( piecework wages ). It should be noted that if the employee is paid based on a key figure, the main interest is increasing this number (see also performance measurement for performance-based remuneration ). An incorrectly selected key figure can lead to incorrect management (example: diseases).
  • Vision and strategy : Key figure systems for the implementation of vision or strategy form the basis of a balanced scorecard .

Outline of key figures

Key figures can be broken down into performance indicators, liquidity indicators, profitability indicators and indicators on the asset structure (balance sheet indicators) and on the turnover rate.

Success metrics

Performance indicators serve to determine the company's success. Relative performance indicators are based either on profit or company value . The latter emerged from the shareholder value approach and the frequent criticism of profit-oriented key figures such as the ROI . A decisive advantage of the company value-oriented indicators is that they take the cost of capital into account .

Success metrics are among others

Liquidity ratios

Liquidity ratios are intended to make statements about the operational solvency and therefore include in particular a company's cash holdings:

Profitability metrics

Profitability is one of the most important corporate goals , so several metrics deal with it and represent partial aspects of profitability.

Key figures on the capital structure (balance sheet figures)

The capital structure , which is measured as the horizontal and vertical capital structure and reflects the ratio of fixed assets to current assets or equity to debt capital ( vertical capital structure ) and the asset coverage ( horizontal capital structure ), is also of importance.

Debt ratios

Debt ratios relate a debtor's liabilities to other debt-related quantities in order to determine the sustainability of debt.

Key figures on the turnover rate

KPI systems

Several key figures that are related to one another can be combined into key figure systems. Key figure system describes an ordered set of business key figures that are related to each other. Key figure systems give the company management information about whether the standards of rational economic activity are being met or not. They are meaningful if they disclose the company's development over time with regard to these standards. The goal of a metrics system is to provide complete information about an issue (such as profitability ) using appropriate tools such as a dashboard. In companies, key figure systems are used on the one hand to obtain faster and more condensed information about the performance of a company. On the other hand, they can support planning, control and management tasks in a company. In contrast to performance measurement systems , a key figure system only considers monetary, precisely quantifiable key figures.

In practice there are two types of key figure systems:

  • Classification systems : assign key figures to certain areas of a company ( production ); this allows statements to be made, for example, about the profitability of an area;
  • Computing systems : break down key figures mathematically and thus have the shape of a pyramid with a top key figure at the top.

Metrics can be related in three ways:

  • logical relationships : the relationship between the key figures is based on mathematical-logical relationships; on the one hand based on definitions (e.g. ), on the other hand through mathematical transformations.
  • Empirical relationships : Relationships between the key figures are derived from empirical observations (e.g. higher advertising expenditure leads to higher sales figures).
  • Hierarchical relationships : related key figures can be ranked.

Well-known index systems are the DuPont index system introduced in 1919 , the ZVEI index system and the RL index system . Across companies, individual companies can be compared with each other by means of economic key figures as part of the company comparison ( company sizes and market shares of competitors). Through aggregation can be industry data determine for the purpose of industry comparison. Key figures in so-called benchmarking are also important. The key figure of the “ industry leader ” represents the benchmark (also known as “best practice”) which other companies can use for orientation. Pure external analysis of company key figures is carried out in particular in the balance sheet analysis by banks and rating agencies to determine credit risk and rating .

Significance, criticism, possible errors and risks

The general criticism of key performance indicators of one-sided focus, misinterpretation and promotion of undesirable behavior also applies to business performance indicators. The danger of one-sided focus can be countered by the simultaneous assessment of several key figures, embedded in a key figure hierarchy. Misinterpretations of key figures can be avoided if the basis for determining and calculating the key figures is transparent. The business key figure of “chicken efficiency” is a striking example of one-sided focus, misinterpretation and promotion of undesirable behavior. In 1996, Mark Graham Brown discovered that a chicken fast food chain was using “chicken efficiency” to determine a particularly preferred key figure that was known to all staff. The number of chicken parts sold is compared with the discarded parts. The discarded parts depend on the legally permissible storage period for chicken meat. To improve the key figure, chicken should only be grilled when the customer is in the shop. But then he has to wait 20 minutes, which causes some customers to leave the store prematurely and leads to a decline in sales. The intended increase in efficiency therefore leads to losses in customers and sales. High “chicken efficiency” can therefore possibly also contribute to lower customer satisfaction and counteract the intended efficiency target.

See also


  • Hans-Otto Schenk: Market economics of trade . Wiesbaden 1991, ISBN 3-409-13379-8 . There is an overview of the most important market and performance factor-related key figures for trading companies (pp. 268–272).
  • Willy Schneider, Alexander Hennig: Key figures for marketing and sales . MI-Verlag, Landsberg am Lech 2001, ISBN 978-3-478-37440-8 .
  • Dorothee Böttges-Papendorf: Industry figures 2011/2012 . Deubner Verlag GmbH & Co KG, 11. added and revised. Edition, Cologne 2011, ISBN 978-3-88606-785-5 . A collection of current work aids, checklists and statistical data from trade, craft, industry and the liberal professions for consulting practice. Appears every 2 years.
  • Bert Erlen, Andrew Jay Isaak: Business Administration Key Figures German-English. Business ratios German-English . Wiley-VCH, Weinheim 2014, ISBN 978-3-527507573 .

Individual evidence

  1. Peter R. Preißler: Business Key Figures , 2008, p. 3.
  2. Karl-Willi Schlemmer, article key figures , in: Wolfgang Lück, Lexikon der Betriebswirtschaft , 1983, p. 623 ff.
  3. Peter R. Preißler: Business Key Figures , 2008, p. 12.
  4. Peter R. Preißler: Business indicators , 2008, p. 13.
  5. ^ Karl-Willi Schlemmer, article key figures , in: Wolfgang Lück, Lexikon der Betriebswirtschaft , 1983, p. 625.
  6. Mark Graham Brown: Get it, Set it, Move it, Prove it: 60 Ways to Get Real Results in your Organization , 2004, pp. 52-54.
  7. Marvin T. Howell: Acationable Performance Management , 2006, p 72nd