Financial and non-financial measures

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December 7, 2021 at 11:06 am #642897
AlinaaF
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Financial measures include ratio analysis and increase or decrease in revenues/costs/profit in percentage figures from one year to another?

Non-Financial measures include information that are not in monetary terms but rather related to the performance of the company in non-financial terms.

It depends on what financial and non-financial measures are given in the question that we make use to calculate the performance of the company whether we have done good or bad.

But with the non-financial measures, there is no general rules on how to calculate them rather we can calculate them in various ways such as:

1) Increase or decrease in quality time from one year to another
2) % change in quality time as compared avg sector total quality time

It does not matter which way we do it rather it depends on the information given in the question? (correct?)
December 7, 2021 at 3:25 pm #642917
John Moffat
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Everything you have written is correct 🙂

For non-financial measures you are expected to think of sensible measures based on the information given in the question – there are no fixed rules.
December 8, 2021 at 9:27 am #643095
AlinaaF
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Thanks for your reply 🙂

Both the Balanced Scorecard and Building Block Model have financial and non-financial measures.

So we will evaluate the financial performance using financial measures such as ratios / % increase or decrease etc.

We will evaluate the non-financial performance using non-financial measures and it depends on the information provided in the question.

But with the non-financial measures, as you said that there is no fixed rule on how to calculate them rather we can calculate them in various ways like this:

1) Using simply increase or decrease in non-financial data from one year to another
2) % increase or decrease in non-financial data from one year to another

Am I Correct?
December 8, 2021 at 3:33 pm #643158
John Moffat
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Yes, you are correct 🙂

%’s are generally more useful but only if there is the information available to be able to calculate a %.

For example, more complaints from customers is a bad sign, but if the sales are twice as big then you would obviously expect there to be more complaints 🙂
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