Human Resources
Cost per Hire – the total expenses associated with recruiting and hiring a new employee. It includes costs such as advertising, agency fees, recruitment staff salaries, and training expenses. This metric helps organizations assess the efficiency of their hiring processes and budget for recruitment.
Employee Absence Rate – the proportion of employees who are absent from work during a specific period. It is calculated by dividing the total number of absent days by the total number of available workdays, then multiplying by 100 to get a percentage. A higher absence rate may indicate issues with employee engagement, health, or workplace culture.
Employee Turnover – the rate at which employees leave a company and are replaced by new hires. It is typically measured as a percentage, calculated by dividing the number of employees who leave during a specific period by the average number of employees during that time. High turnover can indicate issues with workplace culture or employee satisfaction.
Retirement Risk – the financial uncertainty and potential shortfall that individuals or organizations face in ensuring adequate funds for retirement. This risk can arise from factors such as market volatility, insufficient savings, longevity, and rising healthcare costs. Managing retirement risk is crucial for ensuring financial security in later years.
Tenure – the length of time an employee has been with an organization or in a particular position. It can indicate an employee’s experience and loyalty to the company. Longer tenure may correlate with higher employee satisfaction and retention, while short tenure may suggest high turnover or job dissatisfaction.
Inventory
Economic Order Quantity (EOQ) – is a inventory management formula that determines the optimal order quantity a company should purchase to minimize total inventory costs, including ordering and holding costs. It helps businesses balance the costs associated with ordering inventory and the costs of storing it, ultimately improving efficiency and reducing waste.
GMROI (Gross Margin Return on Investment) – the profitability of a retailer’s inventory by comparing the gross margin generated from sales to the cost of the inventory. It is calculated by dividing gross margin by the average inventory cost. A higher GMROI indicates better efficiency in generating profit from inventory investments.
Inventory Turnover – how quickly a company sells and replaces its inventory over a specific period. It is calculated by dividing the cost of goods sold (COGS) by average inventory. A higher inventory turnover indicates efficient inventory management and strong sales, while a lower turnover may suggest overstocking or weak demand.
Safety Stock – a reserve of inventory held to protect against stockouts caused by demand variability or supply chain disruptions. It acts as a buffer to ensure that a company can continue to meet customer demand even when unexpected events occur. Properly managing safety stock helps maintain service levels while minimizing holding costs.
Sell through rate – the percentage of inventory sold within a specific period compared to the amount of inventory available for sale. It is calculated by dividing the number of units sold by the number of units available, then multiplying by 100. A higher sell-through rate indicates strong sales performance and effective inventory management.
Shrinkage – the loss of inventory due to factors such as theft, damage, or administrative errors. It is typically expressed as a percentage of total inventory. Managing shrinkage is crucial for retailers, as it directly impacts profitability and operational efficiency.
Sales & Marketing
Breakeven – the point at which total revenue equals total costs, resulting in neither profit nor loss. It is a critical metric for businesses, indicating the minimum sales volume needed to cover fixed and variable costs. Understanding the breakeven point helps companies set sales targets and evaluate pricing strategies.
Commission – The amount paid to the person or company selling the item.
Contribution Margin – the difference between total sales revenue and total variable costs. It represents the amount available to cover fixed costs and generate profit. A higher contribution margin indicates greater efficiency in covering fixed costs and contributes to overall profitability.
CPC (Cost per click) – a digital marketing metric that measures the amount an advertiser pays each time a user clicks on their ad. It helps assess the effectiveness of online advertising campaigns, with lower CPC indicating more efficient spending and higher return on investment.
CPM (Cost per thousand) – a marketing metric that represents the cost of acquiring 1,000 impressions of an advertisement. It is commonly used in online advertising to gauge the cost-effectiveness of ad placements. A lower CPM indicates more efficient ad spending and better value for reaching a large audience.
Discount – a reduction in the price of a product or service, often offered to encourage sales, reward customer loyalty, or clear inventory. Discounts can be expressed as a percentage off the original price or as a fixed amount. They are commonly used in promotional strategies to attract customers and boost sales.
Market Share – the percentage of an industry or market’s total sales that is earned by a particular company over a specified period. It is calculated by dividing a company’s sales by the total sales of the industry. A higher market share indicates stronger competitive positioning and greater influence in the market.
Markup – the amount added to the cost of a product to determine its selling price. It is typically expressed as a percentage of the cost. Markup helps businesses cover costs and generate profit, with a higher markup indicating greater profit margins.
Margin – the difference between the selling price of a product and its cost, often expressed as a percentage of the selling price. It indicates the profitability of a product or service. Higher margins suggest better efficiency and profitability in operations.
ROAS (Return on Ad Spend) – measures the revenue generated for every dollar spent on advertising. It is calculated by dividing total revenue from ads by the total ad spend. A higher ROAS indicates more effective advertising campaigns and better profitability.
ROMI (Return on Marketing Investment) – the effectiveness of marketing campaigns by comparing the revenue generated from marketing efforts to the costs of those efforts. It is calculated by dividing the net revenue attributed to marketing by the total marketing investment. A higher ROMI indicates more efficient use of marketing resources.