Question

Strategic Risk Management—— Individual Q&A Discussion Narrative “Balanced Scorecard”

Assume you are presenting (as a consultant) the concept of the Balanced Scorecard to the executive team at a company that is considering implementing it for strategy execution. The CFO asks the following question: What financial performance measures are usually included in a Balanced Scorecard? In one short paragraph, please describe how you would reply to this question.

Answer 1

Financial performance measure are one of the important aspect of four component which are there in balanced scorecard and it is a part of the financial perspective which will be measuring the financial performance and this will be comprising of-

A. Cash flows which are related to various projects and addition of value by those Projects through positive cash flow generation.

B. Continuous growth rate in in achievement of profitability across the organisation.

C. Increased market share and return on equity will be another focus of the organisation according to the financial performance

D. Increase in the operational income of the organisation continuously.

E.overall leverage associated with the company and financial costs associated with them is another important financial measure.

F. profit margins and improvement in profit margins along with retained earnings and reinvestment in several projects are also part of financial major according to the balanced scorecard.