Question

In: Accounting

1. What are the major financial performance measures that the firm use. 2. What are some...

1. What are the major financial performance measures that the firm use.

2. What are some of the major non-financial measurements that the firm uses.

3. How can the firm determine the non-financial measurements that the firm can use to increase their impact in their market?

4. What department is primarily responsible for the control of the non-financial evaluation of the firm?

Solutions

Expert Solution

1.Some of the financial performance measures used by firms are:

(i)Statement of cash flow : A cash flow statement is prepared by companies to analyze the movement of cash inflows and cash outflows in the business.

(ii) Ratio analysis: Ratio analysis is done to analyze various aspects of financial statements such as short term and long term liquidity, profitability among others.

2. Some of the non financial performance measures are:

(i) Goodwill: Goodwill is essentially the name or reputation that a company has in the market.

(ii) Competitiveness: The ability to compete in the market determines the long term survival of the company.

(iii) Innovation: If the company has enough innovations to keep with the ever changing dynamics of the business environment.

3. A company can leverage the brand influence and reputation to attract more customers and build strong customer relationships. Having more innovations can assist the company in the long run to keep up with changing customer needs and market.

4. The marketing department is primarily responsible for the control of the non financial evaluation of the firm, as they bridge the gap between the customer and the firm.


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