Key Performance Indicators KPI and Ratios in a Business Plan

The Enloop online business plan software provides you with a breakdown of 25 financial ratios, also known as Key Performance Indicators (or KPI) for your company, based on how you forecast your financial performance. We also compare your company's financial ratios against your industry's median for 17 of those ratios.


How KPI and Financial Ratios Help Your Business Plan

We provide a detailed analysis of your financial ratios and compare your forecasts with your industry's averages. We provide tips and guidance on how to improve yours. Viewing and understanding ratios is an important part of knowing how your company might perform. We show these to you so you'll understand how your company stacks up against the rest of your industry. You can use this really helpful feature to continually refine your financial forecasts until you're in-line with your industry's averages. This is particularly helpful if you're a new business, as it helps you make more realistic projections.

Your goal is to work to improve your plan so you pass as many of the ratios as you can. You should also try to understand why you're failing any ratios. In the Enloop Business Plan Scoring system you need to pass the three common ratios to receive a passing score on your business plan's report card. If you find that you're failing in a ratio but have a good explanation, include the explanation in the text portion of the Ratio section. If you're seeking funding, this should help you explain the poor ratio to a loan underwriter or investor, who will likely ask. Here are the three critical Ratios you need to pass in the Enloop Business Plan Scoring system:

  • Current Ratio
  • % Profit Before Taxes/Tangible Net Worth Ratio
  • Debt/Worth Ratio


Understanding and Improving Your Financial Ratios

Clicking on each ratio brings up a detailed view of how your company is projected to perform compared to its industry average. We include a complete explanation of the ratio, including the actual math for how the ratio is determined, and tips on how to improve your ratio if you're under- or over-performing your industry's average.

If your financial forecasts are not in-line with your industry's averages, you might be over- or under-projecting your company's performance. Knowing how the rest of your industry performs can be very helpful in modeling your forecasts. You should at least forecast to perform within industry averages, and this feature provides a nice way to think about your expectations.

The feature offers you the opportunity to identify and avert a cash flow problem for your business by alerting you if you're under-projecting or over-projecting your forecasts

If your company has been in business for a while and you can substantiate your projections, that's great. But if you're a new business and your forecasts are above industry averages, you might have an unrealistic expectation of how your company might perform. It's common for new business owners to think they'll perform better than they actually do, which leads to a cash crunch and a failed company. Enloop attempts to help you avoid that scenario. 

Think of it as a helpful red flag that allows you to correct your expectations before you get into actual trouble with real money. It's better to be conservative when you're forecasting revenue and costs for a new business ... which is a tricky task. Comparing your forecasts to how others in your industry actually perform can be very sobering and helpful, forcing you to really think about whether you're wearing rose colored glasses. That's a super helpful feature to take advantage of in Enloop.


Financial Ratio Pass/Fail Grades

We provide a 'Pass/Fail' for each ratio by evaluating your performance on a quartile scale. Ratios are analyzed based on your company's third year of financial projections. We do this because it's not usually until a company's third year that a stable financial forecast is achieved. New companies are failed for exceeding industry averages because there's no evidence yet to support your forecasts and most companies that go out of business do so because they could not achieve their overly optimistic revenue forecasts. Existing companies may exceed industry averages, as we assume they have existing financial data to support their forecasts and have a good idea of how they'll likely perform based on historical evidence.


List of Key Performance Ratios in Enloop Business Plan Software

Three critical financial ratios are available at the Detailed subscription level:

  • Current Ratio
  • % Profit Before Taxes/Tangible Net Worth Ratio
  • Debt/Worth Ratio


All twenty-five financial ratios are available at the Performance subscription level:

  • Current Ratio
  • % Profit Before Taxes/Tangible Net Worth Ratio
  • Debt/Worth Ratio
  • Quick Ratio
  • Sales/Receivables Ratio
  • Day's Receivables Ratio
  • Cost of Sales/Inventory Ratio
  • Day's Inventory Ratio
  • Day's Payables Ratio
  • Sales/Working Capital Ratio
  • Profit Before Taxes/Total Assets Ratio
  • Sales/Net Fixed Assets Ratio
  • Sales/Total Assets Ratio
  • Sales Growth Ratio
  • Profit Before Interest and Taxes
  • Net Profit Margin
  • Gross Margin
  • % Depreciation, Depletion, Amortization/Sales Ratio
  • Selling General and Administrative Ratio
  • Advertising Expense
  • EBIT/Interest Ratio
  • Net Profit plus Depreciation Ratio
  • Fixed/Worth Ratio
  • Debt/Worth Ratio
  • Total Liabilities Ratio