PERFORMANCE MEASUREMENT

It is a continuous process that an organization implements to meet its performance

objectives.

Performance measurement is a continuous process that an organization implements to meet its performance objectives. While such processes may be broad, we can generalize this into the following:

It is also known as key performance indicators (KPIs), can tell the entity’s economic well-being.

There are two (2) financial performance measures in evaluating investment center performance.

These are:

It pertains to net income before interest and taxes (EBIT)

It pertain to all assets (current and noncurrent) used in the company’s operations.

The ROI can also be expressed in terms of

This allows you to determine which financial activities are contributing to the most changes to the ROI.

Two (2) metrics that determine the ROI are as follows:

It measures operating efficiency