Question

Which of the following is considered to be an advantage of using both nonfinancial and financial information in the balanced scorecard?

		Nonfinancial information is most helpful in analyzing a company's past performance, while financial information is most useful in evaluating potential future performance.
		Nonfinancial information provides the short-term perspective while financial information provides the long-term perspective of performance.
		Nonfinancial information reflects the company's current and potential competitive advantage, while financial information tends to focus on a firm's achieved financial performance.
		Nonfinancial information should be included with financial information because it is more reliable than financial information.

Answer 1

Correct answer is C.

Nonfinancial information reflects the company's current and potential competitive advantage, while financial information tends to focus on a firm's achieved financial performance.

Non financial information includes information regarding internal business process, customers and learning and growth.

Balanced scorecard usaually prepare to motivate employees so that they can achieve company common goals. Every organisation use financial and non financial performance to evaluate performance of employee.

Since non financial information is not about past performance of company , neither short term prespective nor more reliable than financial information. Hence answer a, b & d are incorrect. Non financial information includes past as well as future objectives of company and its both short term and long term and its not audited information like financial information which is audited by independent auditor.

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