Indicator financial research-A complete guide

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This article describes the key indicators which are used in financial research of any business. Check additional information about indicator financial research.

Key indicator for financial research are set of key performance indicators (KPIs) which are used by most of the business houses to get an insight view of the state of their business health and to predict the financial position of their business in the future. Different types of business have different set of key performance indicators. Since Key indicators differ from one business to other. For instance for a school key indicator for measuring financial performance can be failure rate of` students whereas for a Bank it can be net income it earned in a year. So it is very important for an organisation to identify the relevant performance indicators which can correctly measure the financial performance and provide the other information related to financial research.

Key performance indicators can be grouped into number of categories. Some of the common categories of indicators are as:

Quantitative indicators: These are the indicators which can be presented as a number. Such indicators are used by Banks, Financial corporations, government agencies, income tax departments and others. This type of indicator directly states the financial health of a business. All this information is very informative.

Directional indicators: Theses are set of indicators which depict the direction in which the business is moving on ie whether it is moving upward or downward. It gives an idea of the improvement or that business has made from the previous quarter specifying whether an organization is getting better or not.

Practical indicators: These are class of indicator which measure the performance of the various processes used by the organisation. Since quality of processes directly impacts the growth of the business such indicator show what are current situation of process and what can be done to improve them. These type of indicators are used where business house want to measure performance of their inherent process.

Actionable indicators: As the name suggests theses indicators are used to indicate what are the required actions that needs to be taken to improve the performance of the business.

Some of the factors that need to be taken into consideration while selecting set of indicator for financial research are as:

Business Cycle Analysis and business process Requirements.

Business Requirements

Customer Identification and Profiling

Customer requirement and needs

Financial Analysis

Fund allocation

Growth scope

Opportunity Analysis

Mergers & Acquisitions study

Investment Idea Generation

Technology related trends.

Value Chain Analysis

Requirements and goal of the Businesses: One needs to take care of business requirements and its goals while selecting set of indicator so that main focus of the performance variable should be in line with the long term goal of the business. This ensures that result of such a financial research will focus on only relevant areas which are in cohesion with the goals of the organisation. Financial research is very typical task and it requires professionals to do this type of research and most of time such a research is done by the research team which have relevant knowledge and experience in the field. One can take help of professional consultant to decide about the key indicators as this is utmost important to select right key indicators.

If you are interested in indicator financial research, check this link to find out more about metric finance refind. Also, you can check other articles in BSC Guides category.


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