Why should public service organizations need to measure income?

Expert Solution

Reasons why public sector organizations need to measure their income:

It is not necessary only for the public service companies to measure their income, but also for every type of organizations. Reasons for measuring the income are:

The organization can know the financial performance of the organization for that particular accounting period.
The extent to which the income of the period is sufficient to cover the cost of providing services for that period.
To know whether current set of activities / policies followed in the organization are effective or if there is a change required to ensure better results in the next year.
To know if there would be sufficient resources to meet future contingencies.
Show how financial & operating capacity of the firm has changed over the period.
To show whether current resource providers have provided sufficient revenue to meet the costs incurred in the delivery of benefits & services.
What are the various head of expenses incurred by the organization & whether any of them can be avoided to increase he revenue further in the next period.

jeff jeffy answered 2 years ago

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