Financial Reporting
KPI (Key Performance Indicator)
A measurable metric used to evaluate business performance against strategic objectives.
What is a KPI?
A Key Performance Indicator is a measurable value that demonstrates how effectively your business is achieving its key objectives. Good KPIs are specific, measurable, and directly tied to business goals.
Essential E-Commerce KPIs
- Revenue KPIs: Revenue, AOV, conversion rate
- Profitability KPIs: Gross margin, net margin, contribution margin
- Customer KPIs: CAC, LTV, repeat purchase rate, churn rate
- Marketing KPIs: ROAS, CPA, MER
- Operations KPIs: Return rate, fulfillment cost, inventory turnover
KPI Best Practices
Focus on 5-10 KPIs maximum. Too many metrics create analysis paralysis. Choose KPIs that are actionable — metrics you can actually influence.
Example
A DTC brand tracks 6 core KPIs: net margin (15%), AOV ($65), conversion rate (3.2%), LTV:CAC (4:1), return rate (12%), MER (5x).
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