FINANCIAL INDICATORS
Financial Indicators
Financial statement data is used to calculate financial indicators that describe a company’s operations and financial position. These indicators are metrics derived from financial statement figures; they can be used by the company itself and by external parties to assess the company’s condition. Financial indicators also help in evaluating the company’s future prospects.
Financial indicators condense the essential numerical information from financial statements into a readable and easily comparable format. Corporate accounting produces an annual report in the form of financial statements, comprising the income statement and the balance sheet. Underlying these statements are the general ledgers, journals, and supporting documentation that record the transactions of the financial year.
Typical Use Cases of Financial Indicators
The need for financial indicators varies depending on the specific use case, the company, and the industry. For instance, when analyzing a rapidly growing company, liquidity indicators are likely more important than when evaluating the business of a company that has already established its operations.
Comparing financial indicators yields indicative results. Such comparisons are most effective when made between companies operating in the same industry and of a similar size.
Financial indicators are generally categorized into indicators of profitability, solvency, and liquidity. In addition to these, key figures measuring the scope and efficiency of operations are also provided.
Categories
Profitability
Solvency
Liquidity
Scale of Operations
Efficiency
Profitability
A company’s profitability is generally considered the most important condition for a company to operate. A company’s business is profitable when its income is greater than its costs. Often, a company that is starting out or is growing rapidly may be at least temporarily unprofitable because the costs have been incurred well before the income. In general, good profitability is built over time.
Common profitability ratios
Gross margin percentage
EBITDA margin percentage
Operating profit margin percentage
Financial result margin percentage
Net profit margin percentage
Total result margin percentage
Return on equity (RoE)
Return on invested capital
Return on total capital
Solvency
Solvency is a key factor in a company’s operating conditions, describing the ratio of equity to liabilities. The higher the ratio of equity to liabilities, the more solvent the company is. Solvency ratios indicate a company’s capacity to meet its financial obligations in the long term. In practice, they measure, among other things, the company’s ability to absorb losses and its potential to raise long-term debt.
Common solvency ratios
Equity ratio
Net gearing ratio
Relative indebtedness ratio
Net financial expense ratio
Net financial expenses / EBITDA
Debt repayment period
Liquidity
A company’s liquidity reflects its ability to meet payment obligations as they fall due. Even if a company is highly profitable, this does not necessarily mean it has good liquidity.
Common liquidity indicators
Quick Ratio
Current Ratio
Financial result
Scale of operations
Net sales is the most common key figure describing the scale of a company’s operations. By comparing a company’s net sales to the industry average, one can assess the company’s position within the sector. If a company’s net sales have grown faster than the industry average, it has succeeded in increasing its market share.
The amount of capital tied up in the company’s operations—and changes therein—also reflect the scale of its activities. To increase net sales, a company may invest in—or acquire—fixed assets; this often necessitates a simultaneous increase in financial assets and inventories. Ideally, the growth of these other asset categories should be significantly lower, in relative terms, than the growth of net sales.
Common key figures describing the scale of operations
Net sales
Value added
Invoicing
Net sales growth rate
Value-added percentage
Balance sheet total
Number of personnel
Efficiency
Business efficiency indicators describe how effectively a company’s capital is utilized and the amount of capital and operating finance required for the company to remain operational.
Common business efficiency indicators
Net sales
Value added
Invoicing
Net sales growth rate
Value-added percentage
Balance sheet total
Number of personnel
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Frequently asked questions
Who typically uses Navigora?
Navigora is used by teams that work with company data every day — including sales, marketing, RevOps, customer success, account management, credit & risk, business development, consultants, recruiters and public sector organizations.
How can salespeople use Navigora to qualify leads and prepare for meetings?
Sales teams can review a company’s financial development, key figures, payment behavior, credit rating, decision-makers and company connections before reaching out. This helps teams prioritize the right prospects and prepare better conversations.
Can Navigora support recruitment and HR use cases?
Yes. Recruiters and employment-focused teams can use Navigora to identify companies with hiring potential, map decision-makers, compare salary data and discover hidden job opportunities based on company growth and business signals.
What industries benefit most from Navigora?
Navigora is useful for B2B companies that sell to, partner with or evaluate other companies — especially in SaaS, consulting, finance, recruitment, professional services, manufacturing, logistics, marketing, and public sector development.
How can public sector and regional organizations use Navigora?
Municipalities and regional organizations can use Navigora to analyze local business landscapes, follow company development, identify growth companies, track disruptions and support employment and regional economic development.
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