Key Performance Indicators (KPIs) are essential tools for measuring financial health and ensuring alignment with strategic goals, particularly when integrated with effective financial risk management practices. For industry-specific contexts, KPIs must reflect sector dynamics—such as same-store sales in retail or return on assets in manufacturing—while addressing the connectivity between operational activities and financial outcomes. A balanced approach is vital, incorporating short-term metrics like cash flow or inventory turnover alongside long-term indicators such as ROI and sustainable growth rate, ensuring stakeholder confidence. Common KPIs cited by boards, investors, and analysts include EBITDA, debt-to-equity ratio, net profit margin, and customer lifetime value. It is critical to understand how KPIs influence, and are influenced by, cross-functional workstreams including operations, supply chain, and finance. Properly designed, these metrics not only drive informed decision-making but also mitigate risks and ensure alignment with broader organizational objectives.
Benchmarking & Value-Added
Benchmarking in financial KPIs involves comparing a company’s metrics, such as return on equity (ROE), operating margin, or EBITDA, against industry standards or peers to identify performance gaps and competitive positioning. Value-added refers to the incremental benefit a business generates, measured in terms like economic value added (EVA) or operational efficiency. Internal benchmarking tracks trends within the company, while external benchmarking compares results with market peers or industry averages.
We have conducted multiple risk quantification studies on the impact of market movements to a company’s KPIs, exploring both industry-wide and in-company-specific solutions. This work underscores the importance of aligning operational and financial risk management practices, as market volatility, cost pressures, or regulatory changes directly affect core KPIs. Integrating hedging, cost controls, and strategic investments ensures financial resilience while preserving value-added outcomes. Such insights help firms sustain competitive advantage in dynamic environments.
Net Debt/EBITDA
Net Debt/EBITDA is a critical financial KPI that measures a company’s leverage and its ability to repay debt using operational cash flows. Best practices in managing this ratio include maintaining a balance that aligns with industry norms while ensuring adequate liquidity for growth opportunities. This KPI is especially relevant in post-M&A activities, where increased leverage often requires careful management to meet financial covenants and investor expectations.
Our firm has extensively worked on this KPI as a core workstream, particularly in post-M&A scenarios, helping clients evaluate debt sustainability and optimize capital structures. Understanding and mitigating risks associated with high Net Debt/EBITDA involves stress-testing cash flows under various market conditions and implementing measures like cost efficiencies or refinancing. By aligning this metric with strategic goals, companies can enhance financial flexibility and mitigate potential impacts of market volatility or economic downturns.
Return on Investment
Return on Investment (ROI) is a pivotal financial KPI that quantifies the efficiency of capital allocation and the profitability of business initiatives. Industry-specific best practices include tailoring ROI benchmarks to sector dynamics and identifying drivers such as cost management, revenue growth, and asset utilization. This KPI plays a crucial role in company valuations, offering stakeholders and analysts insights into financial health and strategic effectiveness.
Our firm has conducted multiple studies examining operational and financial practices, identifying areas for improvement to optimize ROI. Leveraging AI through our partnership with leading technology providers, we believe AI-driven analytics can significantly enhance decision-making and performance, aligning with market and stakeholder expectations. Case study examples on our partnership page highlight successful applications where AI has helped refine strategies and deliver measurable value in competitive markets.
Return on Capital
Return on Capital (ROC) is a critical financial KPI that assesses how effectively a company generates returns from its invested capital. Best practices include optimizing capital allocation, managing liquidity to address short-term needs, and adhering to industry-specific ROC benchmarks for competitive performance. Strategic capital deployment ensures alignment with growth objectives while maintaining financial resilience.
Our firm has worked extensively with alternative investment strategies, addressing scenarios where immediate business-related investments are unavailable or economically unfeasible. Leveraging our partnership with leading AI technologies, we provide data-driven solutions to optimize ROC, balancing traditional and alternative strategies. Case studies on our partnership page highlight success in aligning capital strategies with market conditions, ensuring financial efficiency and exceeding industry benchmarks.
Cash Flow Management
Cash flows are among the most critical financial KPIs, providing insights into a company’s liquidity, operational efficiency, and financial stability. The ability to forecast, manage, and maintain real-time oversight of cash flows is essential for CFOs and group treasurers to ensure the organization’s financial health. Key success factors in cash flow risk management include accurate forecasting, stress-testing under different scenarios, and maintaining contingency liquidity buffers.
Our firm has conducted numerous studies in this area, often positioning cash flow analysis as the starting point for comprehensive corporate risk management and policy development. Advanced tools and technologies, such as AI-driven analytics, can enhance cash flow oversight by identifying trends and predicting disruptions. Robust cash flow management underpins strategic decision-making, ensuring resilience in volatile market conditions and aligning with stakeholder expectations.
I am pleased to recommend Erik. During our time working together, Erik expertly transitioned complex projects from planning to successful execution, showing a keen ability to manage both strategic initiatives and detailed financial analyses. His proactive approach in identifying potential risks and developing mitigation strategies greatly benefited our team and our clients.
Joakim Lidbark
Former Global Head of CitiFX Client Solutions
I had the pleasure of working with Erik on several high-level CFO and board projects, spanning capital risk, foreign exchange, global policy, and treasury transformation . His depth of knowledge and keen understanding of corporate priorities are unmatched. Erik’s forward-thinking approach to potential risks, coupled with his adaptability to industry and company-specific nuances, sets him apart. He is also an outstanding communicator, able to connect effectively at all levels of an organization.
Nick Pedersen,
Global Head of Digital – NatWest
I have known and collaborated with Erik Johnson for over 25 years, beginning with our roles as regional treasury heads at Siemens—Erik in Hong Kong and myself in New York. Together, we were responsible for designing, streamlining, and implementing customized processes and protocols aimed at clarifying and managing complex corporate risk profiles across various asset classes, including interest rates, foreign exchange, credit, and commodities. This work ensured alignment with company objectives and risk management practices. Over the years, we have frequently partnered on global hedging strategies for corporate clients. Erik has dedicated his career to advancing the field of treasury risk management, demonstrating an exceptional commitment to deep understanding, integrity, and high professional standards.
Mark Cipollina,
Former CFO Siemens Capital U.S.
I have collaborated with Erik on multiple global risk management C-suite initiatives over many years with several different corporates. His extensive experience as a corporate treasurer provided him with a deep understanding of our needs across various operational areas. Erik delivered a comprehensive policy and risk management framework that aligned with our objectives, while adhering to industry best-in-class practices. His proactive and strategic approach to identifying and addressing risks, combined with his forward-looking insight and ability to embed technology into both current and future needs, sets him apart. I highly recommend him.
Ciaran Fegan, CFA
Senior Director, FX Risk Management & Treasury Strategic Projects at Viatris
I have had the privilege of knowing Erik for nearly 30 years. During this time, and in my previous capacity as the head of foreign exchange trading at leading global financial institutions in the Asia-Pacific region, I have been consistently impressed by Erik’s extensive experience in global risk management and his deep understanding of financial markets across multiple asset classes. Erik displays a disciplined approach to risk management, spanning both emerging and developed markets, and stands out as an industry leader. His strong grasp of macroeconomic themes and expertise in financial risk modeling, allow him to translate complex data into practical, effective risk management solutions that consistently deliver value for his firm and their clients. I am confident in recommending Erik for roles requiring strong leadership, strategic vision, and deep expertise in financial markets and risk management.
Christopher de la Hoyde
Former Head of Foreign Exchange Asia Pacific at RBS
Get in Touch
Our team is here to guide you through the complexities of Risk Management.
Contact us today to learn more.