Question

Explain financial and non-financial factors as well as internal and external considerations.

Answer 1

Answer)

Financial factors are the factors as the name indicates the performance factors that can be directly marked to financial items. These can be easily identified by using financial statements items like turnover achieved, profit made, profit margin, EPS etc and these help in knowing what company is earning through which we can estimate the financial sustainability of an organization in future. Now the non financial factors are the conditions which doesn't directly related to financial statements but can give an idea about continuity of business in future. Some of the example are meeting the demands of legal environment, employees morale, relation ships with supplier etc where an organization could collapse due to non following of legal requirements or due to evaporation of profits due to bad relations and brand image.

Internal factors are the factors that an influences mission statement and that can be controlled by the organisation directly. People, systems, policies etc are some examples of it. These capabilities are developed on basis that how an organization want to appear to external environment. External factors are factors that happen outside the organisation like political, legal, competition which have imppact on organisation comditions