Feature number
A key number, also known as a financial ratio, is a quantitative measurement. It is used to assess a company's financial health, performance, or other characteristics. It is calculated by comparing two relevant numerical values from business records. Key figures are primarily used in financial analysis to evaluate companies on aspects such as liquidity, solvency, profitability, and operational efficiency. They help investors, analysts and management make informed decisions.
Role and application of prefix
The role of a key number is to translate complex financial data into easy-to-understand measurements. These measurements can be used to benchmark performance, analyze trends, and monitor a company's financial health. They are an important part of annual reports, investment analysis, and business strategy development. Key figures are important for assessing the effectiveness of business activities and strategies. They also play an important role in supporting financial decision-making and promoting transparency in business operations.
Example:
An example of a key figure is the current ratio, which shows the ratio of current assets (e.g., cash) to current liabilities. Suppose a company has €100,000 in current assets and €50,000 in current liabilities. The current ratio would then be 2 (€100,000 / €50,000), indicating that the company has twice as many current assets as it does current liabilities. This ratio shows how easy it is for a company to pay its bills in the short term.
