Question

In: Accounting

Apple Inc. critical success factors (CSF) under the financial performance category of the balanced scorecard are:...

Apple Inc. critical success factors (CSF) under the financial performance category of the balanced scorecard are: (1) increase revenue and (2) Increase shareholder value.

In at least 300 words discuss why the two critical success factors are important in accessing the success of the company? Also, explain why the two critical success factors are selected for Apple Inc. Be sure to clearly and concisely discuss each question.

Solutions

Expert Solution

Increase in revenue :- Topline is always important because all entities are working on revenue model and if there is deviation in their top line then effect will seen in their bottom line also. So revenue is critical factor for the entities in each and every year planning of revenue has been done so that budget of cost can prepared. So employee strength, cost, expenses , branches , all other direct and indirect cost is directly related with revenue. So obviously this is critical success factors for the entity. If you increased the revenue then automatically your profit after tax we'll be increased and shareholder interest in the business increased because in higher revenue shareholders will get higher profit and higher return on equity/ return on investment.

Increase in shareholders value :- Shareholders value is important for the business so that for any expansion equity can be contributed by the shareholder. So if the company sell more units and get higher profit and reduced the per unit cost shareholders will get higher profit and there return on investment in the company is higher than there's expected return on equity. So shareholder value only can increased if company earn good profit and distribute good return in form of dividend to the shareholders.

Because both of these factors are for success is important and they are link each other that's why these two points are selected by the company for their success.


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