It is important to identify the following key performance indicators to proactively measure profit and productivity, which can greatly affect your company's bottom line.

• Compare your estimated costs with your actual costs and projected costs

• How long does it take for change requests to become approved change orders?

• Is your labor force and equipment being used to achieve their ultimate in productivity

• What kinds of indirect production overhead (budgeted, allocated, utilization/capacity, hours, and dollars) do you have?

• What kind of asset turnover do you face?

  • Days in WIP, receivables, and inventory

  • Equipment utilization

• What is your Weighted Average Cost of Capital (WAAC)

• What is your Rate of Return on Invested Capital (ROIC)

• What is your Rate of Return on Equity (ROE)

• What is your Economic Profit (EP)

• What is your growth rate alignment with respect to revenue, cost/profit, economic profit, net investment, and free cash flow

  Major Category	Sub-Category	Measurement Objectives	Key Performance Indicators	Potential Views
  Revenue & Contract Management	Contracts	Maintain Estimated Margins Timely Revenue Recognition Identify & Manage Over & Under Billings Timely Billing & Collection	Project Schedule (dependence, changes, impact) Jobs In Progress (WIP) Report	Company Division Project Mgr. Job Category Customer
  	Change Orders	Added Revenue for Added Scope & Cost Project Manager Effectiveness Job & Customer Quality	Days RFIs Unanswered Days Between Change Requests & Orders
  Direct Job Cost	Labor Material Subcontracts Equipment Other	Match Responsibility & Action to WBS (phase) Standard Phase Coding Capture Non-Productive Job Cost & Hrs. Project Duration (est. vs. actual) Dollars, Hours, Quantities Small Variances Spot & Solve Problems Proactively Validate Estimates & Projections Productivity (units, hours, $)	Variance (est., projected, actual - $, qty, hrs) Labor & Equipment Productivity Reports Production Loss (standby, rework, waste, accident) Profit Stability & Fade Days to Close After Substantial Completion
  Indirect Production Costs	Support Services Cost Pools Cost Drivers	Full Job Costing (direct & indirect) Labor Burden Cost (except SG&A) Capture Support Cost (whse., purch., I.T.) Match Cost Behavior to Cost Drivers Accurate Allocations to Jobs Match Reports to Mgt. Responsibility Cost Drivers Match Cost Behavior Pools Standard Cost Allocations (per capacity budget) Allocated Costs Competitive to Market	Over & Under Allocations (excess or short capacity) Market (rental) Rates to Internally Allocated Costs Equipment & Labor Downtime or Loss Accident Training vs. Lost Time Project Mgr. Realization (direct vs. indirect) Project Admin. & I.T. Transactions vs. Cost	Company Division Department
  Indirect Production Costs	Marketing Sales Estimating Corp. Overhead	Support Productivity Costs Unrelated (direct/indirect) to Jobs Generally Not Allocated to Jobs/P.M.s Allocate Estimating Cost Only if Job Awarded Allocate Owner-Job Involvement at P.M. Value Distinguish Operating Costs from ROE Considered in Top-Level Reporting (ROIC, EP)	Bids vs. Realizable Potential Projects Bids Awarded vs. Bids Lost Job Referral Sources vs. Actual Job Referrals Projects Referred vs. Projects Internally Sourced SG&A Overhead % vs. Industry
  Capital Management	Working Capital	Operating Working Capital (adjusted) Reclassify Interest Bearing Debt Reclassify Quasi Equity Items (deferred tax, stockholder receivables or loans)	Working Capital/Revenues Days in Accounts Receivable (to discounts given) Days in WIP (unbilled cost & profits vs. earned) Days in Material Inventories Days in Accounts Payable (to discounts taken) Operating Cycle (cash to cash)	Company Division Dept. Project Mgr.
  	Prop. Plant & Equip.	Net PP&E (adjusted, as required)	PP&E/Revenues Equipment Utilization & Productivity	Company Division Department
  	Other Assets	Other Ops. Assets net of Other Liabilities	Other Operating Assets/Revenue
  	Investor Capital	Total Debt & Equity Capital (adjusted, as required)	Assets as % of Revenue & Asset Turnover (reciprocal) Return on Invested Capital (ROIC.)
  	Weighted Ave. Cost of Capital (WAAC)	Percentage Mix of Debt & Equity After Tax Cost of Interest Bearing Debt Equity Cost = Risk Free + Risk Premium	ROIC. less WAAC. = Economic Profit % Economic Profit % x NOPAT. = Year's Econ. Profit $ Economic Profit = Added Value to Firm
  	Net Investment	Yearly Increment of WC & PP&E Investment Needed to Match Growth	Growth/ROIC. = Net Investment Rate Net Investment Rate X NOPAT. = Net Investment
  	Free Cash Flow	Cash Available to Investors	NOPAT. - Net Investment = Free Cash Flow
  Growth	Revenue Profit ROIC Net Investment Economic Profit Free Cash Flow	Alignment & Symmetry of Components	Trends & Growth Alignment Over Operating Years ROIC. x Investment Rate (yr. 1) = Growth (yr. 2) Net Investment Rate/Growth % = ROIC.	Company Division
  Risk Management	Operations Projects Financial	Measurement and Mitigation Balance to return on Investment Projecting Capital Needs & Cost Job Safety Regulatory & Contract Compliance	Document Tracking (RFIs, insurance, lien releases) Safety, Training, Accident Tracking Human Resource Admin. (employee data) Projections, Revenue Recognition (vs. billing) Capital Budgeting