Final answer:
Low hanging KPIs on a Profit & Loss statement include the Revenue Growth Rate, Net Profit Margin, and Operating Cash Flow as they can be more easily adjusted through routine business operations and strategies to reflect improvement in financial health.
Step-by-step explanation:
Low hanging Key Performance Indicators (KPIs) on a Profit & Loss statement are those KPIs which are most directly affected by routine business operations and are typically the easiest to improve with small changes in the business strategy or practices. When evaluating a Profit & Loss statement, the low hanging KPIs often considered are:
- Revenue Growth Rate: This indicator measures the rate at which a company's sales are increasing or decreasing over a specific period. It is considered a low hanging fruit because increasing revenue is often a priority for businesses and can sometimes be achieved with targeted efforts in marketing or product diversification.
- Net Profit Margin: This is the ratio of net profits to revenues. It indicates how effectively a company is converting its revenues into profits, and improving it could be as straightforward as reducing explicit costs or increasing prices.
- Operating Cash Flow: Represents the cash generated by a company's normal business operations. Having positive cash flow could signify good liquidity and efficient management of operating expenses.
Considering these indicators together provides a comprehensive view of a company's financial health.
Therefore, the correct answer is d) All of the above.