KPI Glossary

Complete reference of all KPIs calculated by Levelup, organized by the 5 C's of credit analysis.

Levelup automatically calculates KPIs from your companies' normalized financial data. This glossary covers every KPI available in Levelup, organized by the 5 C's of Credit Analysis: Cash, Capacity, Credit, Collateral, and Cost/Expense.

Each KPI entry includes its formula, what it measures, and how to interpret the results. KPIs are displayed on individual company dashboards and can be compared across companies in the portfolio view.

Cash

Cash KPIs measure a company's liquidity -- its ability to meet short-term obligations and generate cash from operations.

Free Cash Flow

Detail	Value
Formula	Operating Cash Flow - Capital Expenditures
Unit	Currency (dollars)
What it measures	The cash a company generates after accounting for capital expenditures. Shows how much cash is available for debt repayment, dividends, or reinvestment.
Interpretation	Positive values indicate the company generates more cash than it spends on capital investments. Negative values may signal heavy investment or cash flow problems.

Cash Activity Chart

Detail	Value
Formula	Tracks Operating + Investing + Financing cash flows and ending bank balance
Unit	Currency (dollars)
What it measures	The breakdown of cash flows by category (operations, investing, financing) along with the ending bank balance for each period.
Interpretation	Healthy companies typically show positive operating cash flow. The ending bank balance reveals the cumulative cash position.

Cash Conversion Cycle

Detail	Value
Formula	Days Sales Outstanding (DSO) + Days Inventory Outstanding (DIO) - Days Payable Outstanding (DPO)
Unit	Days
What it measures	How long it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
Interpretation	Lower values are better -- they mean the company converts inventory to cash faster. A negative cycle means the company receives payment before paying its suppliers.

Revenue, Net Income, and Cash

Detail	Value
Formula	Displays Gross Revenue, Net Income, and Cash balance on a single chart
Unit	Currency (dollars)
What it measures	The relationship between top-line revenue, bottom-line profit, and available cash over time.
Interpretation	Divergences between revenue growth and cash position can signal collection issues. Net income declining while revenue grows may indicate rising costs.

Capacity

Capacity KPIs measure a company's ability to generate revenue and grow over time.

Revenue Growth

Detail	Value
Formula	Current Month Revenue - Previous Month Revenue
Unit	Currency (dollars)
What it measures	The absolute change in revenue from one month to the next.
Interpretation	Positive values indicate the company earned more revenue than the prior month. Consistent positive growth suggests a healthy business trajectory.

Revenue Growth Rate

Detail	Value
Formula	((Current Period Revenue - Prior Period Revenue) / Prior Period Revenue) x 100
Unit	Percentage (%)
What it measures	The percentage change in revenue compared to the prior period. Supports month-over-month and custom range comparisons.
Interpretation	A positive percentage means revenue is increasing. Compare against industry benchmarks to assess whether growth is above or below average.

Gross Profit Margin

Detail	Value
Formula	((Total Income - Total Direct Costs) / Total Income) x 100
Unit	Percentage (%)
What it measures	How much profit a company retains from revenue after paying for the direct costs of producing its goods or services.
Interpretation	Higher margins indicate better efficiency in production. A declining margin may signal rising material or labor costs. Typical ranges vary widely by industry.

Operating Profit Margin

Detail	Value
Formula	((Total Income - Total Direct Costs - Total Expenses) / Total Income) x 100
Unit	Percentage (%)
What it measures	How much profit remains after paying both direct costs and operating expenses (rent, salaries, utilities, etc.).
Interpretation	Shows operational efficiency. A margin that is positive but declining may indicate that overhead costs are growing faster than revenue.

Net Profit Margin

Detail	Value
Formula	((Total Income - Direct Costs - Expenses + Other Income - Other Expenses) / Total Income) x 100
Unit	Percentage (%)
What it measures	The bottom-line profitability after all costs, expenses, other income, and other expenses are accounted for.
Interpretation	The most comprehensive profitability metric. A positive net margin means the company is profitable overall. Compare across periods to spot trends.

Return on Assets (ROA)

Detail	Value
Formula	(Trailing 12-Month Net Income / Average Total Assets) x 100
Unit	Percentage (%)
What it measures	How efficiently a company uses its assets to generate profit. Uses trailing twelve month (TTM) data for stability.
Interpretation	Higher values indicate better asset efficiency. Compare against industry peers since asset-heavy industries naturally have lower ROA.

Return on Equity (ROE)

Detail	Value
Formula	(Trailing 12-Month Net Income / Average Total Equity) x 100
Unit	Percentage (%)
What it measures	How effectively a company uses shareholder equity to generate profits. Uses TTM data for stability.
Interpretation	Higher ROE indicates better returns for equity holders. Very high ROE combined with high debt may indicate excessive leverage rather than strong performance.

Break-Even Analysis

Detail	Value
Formula	Charts fixed costs, variable costs, and revenue to identify the break-even point
Unit	Currency (dollars) and units
What it measures	The level of sales at which total revenue equals total costs -- the point where the company starts making a profit.
Interpretation	A lower break-even point means the company needs fewer sales to cover its costs. Useful for scenario planning and understanding cost structure.

Credit

Credit KPIs measure a company's leverage, debt burden, and ability to service its obligations.

Current Ratio

Detail	Value
Formula	Current Assets / Current Liabilities
Unit	Ratio
What it measures	Whether a company has enough short-term assets to cover its short-term liabilities.
Interpretation	A ratio above 1.0 means the company can cover its current obligations. Values between 1.5 and 3.0 are generally considered healthy. Below 1.0 may signal liquidity risk.

Quick Ratio

Detail	Value
Formula	(Current Assets - Inventory) / Current Liabilities
Unit	Ratio
What it measures	Similar to the current ratio but excludes inventory, which may not be easily converted to cash. A more conservative measure of short-term liquidity.
Interpretation	A ratio above 1.0 means the company can meet short-term obligations without selling inventory. Below 1.0 may indicate reliance on inventory sales to pay bills.

Debt-to-Equity Ratio

Detail	Value
Formula	Total Liabilities / Total Equity
Unit	Ratio
What it measures	How much debt a company uses relative to its equity to finance operations.
Interpretation	Lower values indicate less reliance on debt. A ratio above 2.0 may signal high leverage. The acceptable range varies significantly by industry.

Interest Coverage Ratio

Detail	Value
Formula	Operating Profit / Interest Expense (rolling 12-month calculation)
Unit	Ratio
What it measures	How easily a company can pay its interest expenses from operating income.
Interpretation	Higher values are better. A ratio below 1.5 is a warning sign -- the company may struggle to cover interest payments. Above 3.0 is generally considered comfortable.

Estimated Debt Service Coverage Ratio (DSCR)

Detail	Value
Formula	Operating Profit / (Interest Expense + Principal Payments) (rolling 12-month calculation)
Unit	Ratio
What it measures	Whether a company generates enough operating income to cover both interest and principal payments on its debt.
Interpretation	A DSCR above 1.25 is typically required by lenders. Below 1.0 means the company cannot cover its debt obligations from operating income alone.

Piotroski F-Score

Detail	Value
Formula	Sum of 9 binary financial criteria (score range: 1-9)
Unit	Score (1-9)
What it measures	A composite financial health indicator based on profitability, leverage/liquidity, and operating efficiency. Adapted for small businesses with a minimum score of 1.
Components	The 9 criteria are: (1) Net Income positive, (2) Return on Assets positive, (3) Operating Cash Flow positive, (4) Cash flow exceeds net income (accruals), (5) Leverage decreased, (6) Liquidity improved, (7) No equity dilution, (8) Gross margin improved, (9) Asset turnover improved.
Interpretation	Scores of 7-9 indicate strong financial health. Scores of 4-6 are average. Scores of 1-3 suggest financial weakness.

Altman Z-Score

Detail	Value
Formula	0.717A + 0.847B + 3.107C + 0.420D + 0.998E
Unit	Score
What it measures	A bankruptcy prediction model that estimates the probability of a business becoming insolvent. Uses trailing 12-month income data and point-in-time balance sheet values.
Components	A = Working Capital / Total Assets, B = Retained Earnings / Total Assets, C = EBIT / Total Assets, D = Equity / Total Liabilities, E = Sales / Total Assets
Interpretation	Above 2.99: Safe zone (low bankruptcy risk). Between 1.81 and 2.99: Grey zone (moderate risk). Below 1.81: Distress zone (high bankruptcy risk).

Collateral

Collateral KPIs measure the value and efficiency of a company's tangible assets.

Inventory Book Value

Detail	Value
Formula	Balance sheet inventory value at month end
Unit	Currency (dollars)
What it measures	The total value of inventory held by the company as recorded on the balance sheet.
Interpretation	Tracks inventory levels over time. Rising inventory without matching revenue growth may signal overstock or slowing sales.

Inventory Turnover

Detail	Value
Formula	TTM Cost of Goods Sold / Average Inventory
Unit	Ratio (times per year)
What it measures	How many times a company sells and replaces its inventory over a trailing twelve-month period. Uses TTM COGS and average inventory for stability.
Interpretation	Higher turnover means the company sells inventory quickly. Low turnover may indicate excess stock or weak sales. Compare against industry benchmarks.

Accounts Receivable

Detail	Value
Formula	Balance sheet accounts receivable value at month end
Unit	Currency (dollars)
What it measures	The total amount owed to the company by its customers for goods or services delivered but not yet paid for.
Interpretation	Rising AR without matching revenue growth may indicate collection problems. Declining AR with stable revenue suggests improved collections.

Accounts Receivable Turnover

Detail	Value
Formula	TTM Net Credit Sales / Average Accounts Receivable
Unit	Ratio (times per year)
What it measures	How efficiently a company collects payment on credit sales over a trailing twelve-month period.
Interpretation	Higher turnover means faster collections. A declining ratio may signal that customers are taking longer to pay, which can strain cash flow.

Real Estate Book Value vs. Market Value

Detail	Value
Formula	Compares book value of real estate assets to estimated market value
Unit	Currency (dollars)
What it measures	Whether a company's real estate holdings are worth more or less than what is recorded on the balance sheet.
Interpretation	Market value exceeding book value suggests hidden asset value (potential collateral upside). Book value exceeding market value may indicate impairment risk.

Cost/Expense

Cost and expense KPIs track how specific expense categories relate to revenue, helping identify cost control issues or opportunities.

Personnel as % of Revenue

Detail	Value
Formula	(Personnel Costs / Total Revenue) x 100
Unit	Percentage (%)
What it measures	What portion of revenue goes toward paying employees (salaries, wages, and related costs).
Interpretation	Rising percentages may indicate that staffing costs are outpacing revenue growth. Compare against industry norms -- service businesses typically have higher personnel costs.

Payroll Tax as % of Personnel Costs

Detail	Value
Formula	(Payroll Tax Amount / Adjusted Personnel Costs) x 100
Unit	Percentage (%)
What it measures	The proportion of personnel-related spending that goes toward payroll taxes.
Interpretation	This ratio should be relatively stable. Significant changes may indicate changes in workforce composition, tax rate adjustments, or classification issues.

Load Factor

Detail	Value
Formula	(Benefits Amount / Adjusted Personnel Costs) x 100
Unit	Percentage (%)
What it measures	The proportion of personnel-related spending that goes toward employee benefits (health insurance, retirement contributions, etc.).
Interpretation	Increasing load factors may indicate rising benefits costs. Useful for budgeting and comparing total compensation costs across companies.

Advertising as % of Revenue

Detail	Value
Formula	(Advertising Costs / Total Revenue) x 100
Unit	Percentage (%)
What it measures	How much of revenue is spent on advertising and marketing.
Interpretation	Varies widely by industry and growth stage. Startups often spend 15-20% while mature businesses may spend 5-10%. A rising ratio without corresponding revenue growth is a concern.

Property as % of Revenue

Detail	Value
Formula	(Property Costs / Total Revenue) x 100
Unit	Percentage (%)
What it measures	What portion of revenue goes toward property-related costs (rent, utilities, maintenance, etc.).
Interpretation	High percentages may indicate that the company is over-committed on real estate. Declining percentages could signal growing revenue or cost reduction efforts.

G&A as % of Revenue

Detail	Value
Formula	(General & Administrative Costs / Total Revenue) x 100
Unit	Percentage (%)
What it measures	The overhead burden -- how much of revenue goes toward general and administrative expenses.
Interpretation	Lower is generally better, indicating efficient operations. Rising G&A percentages without corresponding business complexity growth may signal inefficiency.

Professional Fees as % of Revenue

Detail	Value
Formula	(Professional Fee Costs / Total Revenue) x 100
Unit	Percentage (%)
What it measures	How much of revenue is spent on professional services (legal, accounting, consulting, etc.).
Interpretation	Spikes may correspond to specific events (litigation, audits, M&A activity). Sustained high levels relative to peers may indicate overreliance on outside services.

Insurance as % of Revenue

Detail	Value
Formula	(Insurance Costs / Total Revenue) x 100
Unit	Percentage (%)
What it measures	What portion of revenue goes toward insurance premiums.
Interpretation	Should be relatively stable unless the business is changing its risk profile. Significant increases may reflect industry-wide premium changes or new coverage requirements.

Meals as % of Revenue

Detail	Value
Formula	(Meals Costs / Total Revenue) x 100
Unit	Percentage (%)
What it measures	How much of revenue is spent on meals and entertainment expenses.
Interpretation	Generally a small percentage. Unusually high values may warrant review for policy compliance.

Macroeconomic Overlay KPIs

These KPIs overlay company financial data with external economic indicators to provide context on how broader economic conditions may be affecting performance.

Revenue vs. GDP

Detail	Value
What it shows	Company revenue plotted alongside US GDP (in trillions) and industry-specific GDP data.
Interpretation	Helps assess whether revenue trends align with or diverge from broader economic growth.

Revenue vs. Inflation (CPI)

Detail	Value
What it shows	Company revenue plotted alongside the Consumer Price Index (CPI).
Interpretation	Reveals whether revenue growth is keeping pace with inflation. Revenue growing slower than CPI means real purchasing power is declining.

Revenue vs. Interest Rates

Detail	Value
What it shows	Company revenue plotted alongside federal funds rate and other interest rate benchmarks.
Interpretation	Useful for interest-rate-sensitive businesses. Rate increases may correlate with revenue changes in sectors like real estate, lending, or durable goods.

Net Income vs. GDP / Inflation / Interest Rates

Detail	Value
What it shows	Net income plotted alongside GDP, CPI, and interest rate data (same overlays as revenue).
Interpretation	Shows how bottom-line profitability correlates with macroeconomic conditions.

KPI Benchmarks

Many KPIs in Levelup include industry benchmarks based on the company's NAICS code. When benchmarks are available, the KPI detail view shows:

25th percentile -- Below-average performance
50th percentile (median) -- Typical performance for the industry
75th percentile -- Above-average performance
Healthy range -- The minimum and maximum values considered healthy for the industry

Benchmarks help you understand whether a company's performance is strong or weak relative to its peers.

For more on how KPIs appear in Levelup, see Company Overview Dashboard.

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