Which set of industry-specific Key Performance Indicators (KPIs) is most relevant for analyzing Commercial Banks versus IT Services companies?

[ A ]Commercial Banks: Passenger kilometer yield; IT Services: Refining crack spread per barrel.

[ B ]Commercial Banks: Net Interest Margin (NIM), Gross/Net NPA ratios, CASA ratio, and Capital Adequacy Ratio (CAR); IT Services: Billed FTEs, Revenue per FTE, Attrition rate, Bench strength, and Constant Currency revenue growth.[ CORRECT ]

[ C ]Commercial Banks: Same-store sales growth; IT Services: Mine ore grade extraction tonnage.

[ D ]Commercial Banks: Room occupancy tariff; IT Services: Fertilizer subsidy per metric ton.

Takeaway

Option B is correct: Commercial Banks: Net Interest Margin (NIM), Gross/Net NPA ratios, CASA ratio, and Capital Adequacy Ratio (CAR); IT Services: Billed FTEs, Revenue per FTE, Attrition rate, Bench strength, and Constant Currency revenue growth.

Derivation

Industry KPIs must match the unit of pricing and operational constraints: (1) Banking: Profitability and credit quality are evaluated via Net Interest Margin (NIM), CASA ratio (low-cost deposit base), Gross/Net Non-Performing Asset (NPA) ratios, and Capital Adequacy Ratio (CAR). (2) IT Services: As a human-capital export business, performance is driven by Full Time Equivalents (FTEs) billed, Revenue per FTE, Employee Attrition, Bench utilization, and Constant Currency growth (eliminating FX volatility). This tests sector-specific financial metrics. The common error is mixing metrics from unrelated industries (e.g., airlines, mining).

Why the others fail

A — Commercial Banks: Passenger kilometer yield; IT Services: Refining crack spread per barrel.

Passenger kilometer yield belongs to airlines and crack spreads belong to oil refiners, not banks or IT services.

C — Commercial Banks: Same-store sales growth; IT Services: Mine ore grade extraction tonnage.

Same-store sales growth belongs to retail stores and ore extraction tonnage belongs to mining companies.

D — Commercial Banks: Room occupancy tariff; IT Services: Fertilizer subsidy per metric ton.

Room tariffs belong to hospitality hotels and fertilizer subsidies belong to agricultural chemical producers.