RAG dashboard: red, amber, and green status rules

A RAG dashboard compares business results with explicit red, amber, and green rules. Its value is the decision behind each color: what needs attention, who owns the response, and when an issue reaches management. A useful dashboard shows the actual figure and the rule together, so another person can reproduce the status.

Start with the rule, then add color

RAG stands for red, amber, and green. The colors are labels for agreed operating conditions, not measurements in themselves. A sales result cannot become green simply because someone considers the month satisfactory.

Write a short rule record for each measure. Include its definition, reporting period, source rows, direction of improvement, target, boundary values, and accountable owner. Record when a rule changes so the next review can distinguish better performance from a more forgiving threshold.

The KPI dashboard template provides a workbook layout with targets and status rules. Use it for the starting structure; the work here is deciding what those rules should mean for your business.

Keep the text status visible beside any colored marker. W3C's guidance on use of color calls for another visual way to convey information that color communicates. A cell reading Amber remains understandable in a printed report or to someone who cannot distinguish the colors.

A worked example from a US distributor

Consider a Denver distributor reviewing its completed September 2026 results. Finance supplies net sales, cost of goods sold, and operating expenses from the closed ledger. Operations supplies shipments due in September and whether each met its committed date.

These are the source totals and approved targets. Dollar amounts are USD; delivery rates use shipment counts rather than sales dollars.

Use these calculations before assigning a status:

Sales attainment = Actual net sales / Target net sales

Expense overrun = (Actual expenses − Budget expenses) / Budget expenses

Gross margin = (Net sales − Cost of goods sold) / Net sales

On-time delivery = On-time shipments / Shipments due

Percentages are displayed to one decimal place. Apply rules to the underlying unrounded result. Rounding a value for display must not move it across a boundary.

Make the boundaries complete and nonoverlapping

Management adopts the following illustrative rules for this company. They are operating choices, not universal benchmarks.

Every possible numeric result fits one band. Exactly 95% sales attainment is amber. Exactly 5% expense overrun is also amber. Those equality rules prevent two reviewers from assigning different colors to the same result.

Direction matters. Higher sales attainment is favorable; higher expense overrun is unfavorable. Gross margin uses an absolute percentage threshold, not attainment against its target. For the underlying margin calculation and cost boundaries, use the separate gross profit margin guide.

In a spreadsheet, first calculate the text status and then format that text. Google Sheets supports conditional formatting based on values or custom formulas. For sales attainment in B2, a status formula is:

=IF(B2="","Not reported",IF(B2>=1,"Green",IF(B2>=0.95,"Amber","Red")))

Keep a blank distinct from a failed result. Covirage is not affiliated with Google Sheets.

Check the figures before discussing the colors

The sales ledger total must reconcile to $475,000, and the cost ledger must reconcile to $308,750. Gross profit plus cost of goods sold must equal sales: $166,250 + $308,750 = $475,000. The shipment export must contain the complete population of shipments due, including late shipments that remain open.

The status count also checks: one green, two amber, and one red equals four reported measures. That count does not produce a meaningful average performance score. Sales, margin, expenses, and delivery have different business consequences; a green margin cannot cancel a missed delivery commitment.

A tabular dashboard keeps the evidence beside the status. Show actual, target, gap, status, owner, and the next review date in the same row, especially when the audience needs to challenge a result.

Turn a status into an operating decision

The sales director owns the $25,000 sales shortfall: $500,000 − $475,000. The finance lead owns the $6,000 expense overrun: $126,000 − $120,000. These are separate issues even though both rows are amber.

Operations owns delivery at 94.0%, four percentage points below the 98.0% target. Meeting the target on the same shipment population would require 980 on-time shipments, leaving a shortfall of 40. That tells the review team what scale of improvement is needed without asserting why the delays happened.

Attach an action, due date, and follow-up evidence to exceptions. The accountability dashboard method covers that next step. A color alone does not establish whether anyone has acted.

Where RAG dashboards go wrong

• Moving thresholds after seeing results. A changed rule can make performance appear better without any operational change. Preserve the prior rule and its effective period.
• Using color without magnitude. A small and a large miss can share the same color. Keep the actual figure and gap visible.
• Treating missing data as green. An unreported result needs a separate data status and an owner to resolve it.
• Combining incompatible periods. A partial month's sales cannot be judged against a completed month's target without an explicitly comparable target.
• Using an overall color as proof. Aggregation can hide a serious exception. Review the underlying measures and their business impact.

Apply the rules to your own file in Covirage

Bring your ledger or operating export together with its target and threshold columns. Covirage maps the columns, and its tools compute and check the figures; the external AI model explains the results with every figure traced to its rows. Create a free Covirage account and bring a sample of your own data.

See metrics governance for the supporting approach to consistent definitions and targets.