MAF651 CHAPTER 3

They provide excellent predictive power for future events

They offer a holistic view including customer satisfaction and innovation

They may encourage actions that reduce customer and shareholder value

They focus primarily on strategic objectives and long-term goals

Return on Investment (ROI)

Residual Income (RI)

Customer Satisfaction Index (CSI)

Economic Value Added (EVA)

They offer insight into intangible assets and long-term strategies

They replace the need for any financial analysis

They are purely subjective and used for personal assessments

They are easier to calculate than financial measures

Return on Assets

Residual Income

Net Profit Margin

Conversion Rate

They are always accurate and timely

They measure causes of problems, not consequences

They lack predictive power for future performance

They are not influenced by accounting policies

By eliminating financial reports

By replacing strategic goals with short-term targets

By ensuring financial results are published quarterly

By not relying solely on financial data for performance assessment

Return on Investment

Product defect percentage

Multi-skilling of employees

Operating profit margin

Because they are too detailed and specific

Because they focus only on the long-term strategy

Because they emphasize only immediate financial outcomes

Because they are rarely based on accounting policies

They are based solely on numerical profit outcomes

They reflect the company's vision and mission better than financial data

They reduce the need for operational metrics

They eliminate the influence of external market factors

Return on Equity

Net present value

Residual Income

Product defect percentage