Platform
Accounts Payable
Automate your accounts payable workflow - from ERP to your supplier’s bank account.
Global Receivables
Open unique receivable accounts worldwide to collect payments like a local, save on fees, and control currency conversions on your terms.
Currency Conversions
Enjoy consistent rates with 24/7 control.
Treasury Management
Unified financial operations management across borders and entities.
Corporate Cards
Cards tied to your global accounts - spend globally, earn cashback, and eliminate currency conversion fees.
Integrations
Pull and push transaction data with a single click.
Solutions
Tech
See how Finofo solves the pain points of Tech & SaaS companies.
Food & Agriculture
Leverage Finofo’s platform to grow your Agribusiness globally.
E-commerce
Swipe right on better Global Banking
Automobile Industry
Drive growth with smoother, faster international transactions.
Manufacturing
Finofo makes your financial workflows as advanced as your production line.
Retail & Wholesale
Finofo helps you expand beyond borders with ease.
Pricing
Pricing
All the features without any paywalls
Company
About Us
Empowering business finance teams with technology to surpass traditional barriers.
Submit Pitch Deck
Finofo’s “Pay it Forward” program
Resources
Blog
Learn more about Finofo, Technology, Payments, and Banking.
Case Studies
See Finofo in action with our customers’ stories.
Changelog
Product news and updates.
Powerful tools to save you time and money.
Help Center
Product guides, best practices, and FAQs.
Comparison
Using a Bank?
Here’s what your Finance team endures — experience their pain.
Working with an FX Broker?
Are they really looking out for your best interests? Understand the trade-offs.
Using other Fintechs?
Are they truly solving your needs? Compare and see the difference.
Log InBook DemoSign Up
Glossary

Leading Indicator

A leading indicator is a statistical measurement or metric that forecasts and predicts potential future changes in economic trends or financial markets.

Explanation

A leading indicator is a crucial statistic used to anticipate future economic trends, often changing before the overall economy does. Some common leading indicators encompass the unemployment rate, consumer price index, and housing starts.

Calculation of leading indicators

The methodology for calculating leading indicators can differ depending on the specific indicator used and the underlying economic theories they're based on. Generally, these indicators predict future economic activities by considering data indicative of future trends, like consumer spending or business investment. A common method involves a weighted average of recent data, giving more recent figures a higher weight to portray a more accurate economic condition.

Users and application of leading indicators

Leading indicators are widely utilized in various industries, aiding firms in making short-term and long-term business decisions by foreseeing economic changes. From manufacturing and retail to financial institutions and government agencies, these indicators guide strategic choices and policy decisions.

Precautions with leading indicators

When employing leading indicators in financial modeling, it's essential to ensure they genuinely predict future performance. Understand the mechanisms behind these indicators' impact on the business to make accurate future predictions. Furthermore, use leading indicators only in short-term performance forecasting, not long-term analysis.

Insights from leading indicators

Leading indicators help forecast economic shifts, offering guidance for business decisions. Common leading indicators like the unemployment rate, inflation rate, and money circulation can provide valuable insights into future economic trends.

Examples of leading indicators

Several indicators like sales growth, purchasing activity, new customer numbers, employee satisfaction, and customer retention offer valuable insights into the future growth and health of various businesses.