KMF

Search Dictionary

Definition of 'KMF'

KFM is an acronym for "Key Financial Metric". It is a measure of a company's financial health that is used to assess its ability to generate profits and grow over time. There are many different KFMs, but some of the most common include:

* **Revenue:** The total amount of money a company brings in from its sales.
* **Net income:** The amount of money a company has left after paying all of its expenses.
* **Earnings per share (EPS):** The amount of money a company earns for each share of its stock.
* **Return on equity (ROE):** The percentage of a company's net income that is returned to its shareholders.
* **Debt-to-equity ratio:** The ratio of a company's debt to its equity.

KFMs are important because they provide investors with a way to compare companies and assess their relative strengths and weaknesses. By understanding a company's KFMs, investors can make more informed decisions about whether or not to invest in that company.

In addition to the KFMs listed above, there are many other KFMs that can be used to assess a company's financial health. Some of the more common KFMs include:

* **Working capital:** The amount of money a company has available to fund its day-to-day operations.
* **Cash flow:** The amount of money a company generates from its operations.
* **Asset turnover ratio:** The ratio of a company's sales to its assets.
* **Debt service coverage ratio:** The ratio of a company's earnings to its interest payments.

The KFMs that are most important for a particular company will depend on its industry and its specific business model. For example, a company that sells products on credit will need to pay close attention to its receivables turnover ratio, while a company that relies heavily on debt financing will need to monitor its debt-to-equity ratio.

By understanding the KFMs that are most important for a particular company, investors can make more informed decisions about whether or not to invest in that company.

Do you have a trading or investing definition for our dictionary? Click the Create Definition link to add your own definition. You will earn 150 bonus reputation points for each definition that is accepted.

Is this definition wrong? Let us know by posting to the forum and we will correct it.