Economic and Financial Indicators Concept

The expression Economic and Financial Indicators designates all kind of indicators based in economic and financial data of certain entity and can be shown in absolute monetary values, relative values or variation rates, time, among others. Even though all indicators should looked at in an integrated manner, is common to separate them into economic indicators and into financial indicators. In the case of economic indicators, these seek to evaluate the company’s capacity in creating value as a way to adequately pay all who in it participate, namely its shareholders, employees, among others. Some examples of economic indicators are the several profitability, efficiency and productivity indicators. Regarding the financial indicators, these seek to evaluate the company’s capacity to honor its commitments in time with the third parties and include, on a long term perspective, the financial and solvability structure indicators and, on a short term perspective, the liquidity indicators.

Examples of Economic Indicators:

- Return on Equity

- Sales Profitability

- Borrowed Capital Cost

- Employees Productivity

- Costs Management Efficiency

Examples of Financial Indicators:

- Liquidity (several levels)

- Debt Level

- Financial Strength

- Fixed Assets Coverage Level

Efficiency Indicators Examples

- Stocks Rotation

- Receipts Average Time

- Payments Average Time

 

 

Translated from Portuguese by Susana Saraiva, Portuguese-English and English-Portuguese translation specialist. Contact: spams@sapo.pt.