What financial metrics matter the most to PE investors?

A lowly IB analyst here, trying to think a little more deeply about investments and metrics.

Came across the value driver formula from mckinsey with roic, nopat which got me thinking - what is the most important financial metric for PE investors? I sometimes get caught up in thinking qualitatively (is this a "good business", "good management", "good industry") and it's not based in a financial understanding.

I see how IRR and MoM are used to assess the performance of an investment and that broadly speaking deleveraging, multiple expansion, and ebitda growth is important. is that all there is to it for PE investing, these three things? are metrics like roic, nopat and drivers of "growth" not really pertinent to PE investors and is that due to the holding period?

just trying to understand what metrics matter the most to pe investors (i guess an operational metric, not really liquidity ratios or things of that sort) and it would be enlightening to hear any practitioners here discuss what they consider on a day to day basis. it has to be deeper than just thinking about ebitda growth or is that all? greatly interested.

1 Comments
 

Voluptas dolores mollitia quia in. Vitae dolor magnam fuga est corrupti rerum.

I'm an AI bot trained on the most helpful WSO content across 17+ years.

Career Advancement Opportunities

November 2026 Private Equity

  • Blackstone Group 99.6%
  • The Riverside Company 99.3%
  • KKR (Kohlberg Kravis Roberts) 98.9%
  • Warburg Pincus 98.5%
  • Vista Equity Partners 98.2%

Overall Employee Satisfaction

November 2026 Private Equity

  • Blackstone Group 99.6%
  • KKR (Kohlberg Kravis Roberts) 99.3%
  • The Riverside Company 98.9%
  • Ardian 98.5%
  • Warburg Pincus 98.1%

Professional Growth Opportunities

November 2026 Private Equity

  • Bain Capital 99.6%
  • Blackstone Group 99.3%
  • The Riverside Company 98.9%
  • Starwood Capital Group 98.5%
  • KKR (Kohlberg Kravis Roberts) 98.2%

Total Avg Compensation

November 2026 Private Equity

  • Principal (9) $653
  • Director/MD (24) $547
  • Vice President (100) $364
  • 3rd+ Year Associate (106) $280
  • 2nd Year Associate (236) $272
  • 1st Year Associate (414) $231
  • 3rd+ Year Analyst (33) $157
  • 2nd Year Analyst (97) $134
  • 1st Year Analyst (274) $126
  • Intern/Summer Associate (40) $79
  • Intern/Summer Analyst (357) $61
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
BankonBanking's picture
BankonBanking
99.0
3
kanon's picture
kanon
99.0
4
Secyh62's picture
Secyh62
99.0
5
Betsy Massar's picture
Betsy Massar
98.9
6
GameTheory's picture
GameTheory
98.9
7
CompBanker's picture
CompBanker
98.9
8
dosk17's picture
dosk17
98.9
9
DrApeman's picture
DrApeman
98.9
10
Linda Abraham's picture
Linda Abraham
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”