There are some major Key Performance Indicators for chemical industry:

1. Financial

Return on Assets (ROA) – This ratio evaluates exactly how well the organization is making
the use of its available assets. It can be calculated by dividing net income to Total assets of
the organization. It helpful in comparing a company’s profitability over the years as well as
comparing to similar companies.

ROA = Net Income / Avg. Total Assets

Return on capital employed (ROCE) – This is the ratio that can be helpful in evaluating
company’s profitability and capital efficiency. It measures a company’s profit in terms of all
of its capital employed in the organization for functioning.

ROCE = EBIT/ Capital Employed; Capital Employed= Total assets – Current Liabilities

Asset Turnover – This ratio measures the value of a company’s sales relative to the value of
its assets. The ratio can be used as an indicator of the efficiency through which a company is
utilizing its assets to generate revenue.

The higher the asset turnover ratio, the more efficient a company is at generating revenue
from its assets. 

Asset Turnover = Total Sales/ Average assets; Avg. assets= current year + pre. year /2

2. Sustainability (Green)

Product safety and Quality Assurance

Safety and Health Committees comprising labour and management representatives should
convene every month at each worksite. The committees should investigate and deliberate
matters related to safety and health risks to all employees at worksites and promotes specific
measures in unison with labour and quality assurance.

Governance & Compliance

The committee establishes overarching principles of compliance from a global perspective,

and then works with each business sector and Group company.
Accordingly, companies established Chemical Compliance Standards, which outlines the
compliance systems and activities that serve as our standards. In line with these standards,
Chemical and its Group companies are engaged.

Occupational safety and health disaster prevention

Company should work to enhance industrial safety management and quickly share the causes
of the minor industrial accident and the lessons learned across the entire Chemical Group.

The success of straightforward daily activities on the frontlines as well as the steady
enhancement of industrial safety management level.

3. Processing

Inventory turnover – It is the rate at which a company replacing its inventories in a given
period as compared to its sales. Inventory turnover helps company to make better pricing,
manufacturing, and purchasing decisions. Appropriate level of inventory shows that a
company is able to achieve desired level of sales by controlling the cost.

Inventory turnover = COGS / Average Inventory

Days sales of inventory measures how many days it usually takes for the company to turns its
inventory into sales. DSI = (Average Inventory ÷ COGS) x 365

Working capital ratio – This ratio measures the liquidity of company, which indicates
whether a company can its obligations. The ratio in the vicinity of 2 is considered to represent
good short-term liquidity. It helps lenders and creditors in taking decision regarding
extending credit to the company.

Working capital ratio = Current assets/ Current liabilities

Operating Ratio – The operating ratio indicates the efficiency of a company’s management
by comparing the total operating expenses of a company to net sales. It shows how efficiently
a company’s management is able to maintain its costs low while generating revenue. The less
ratio indicates that the company is more efficient at generating revenue against their total
expenses.

Operating Ratio = Operating expenses + COGS / Net sales