TAILIEUCHUNG - Wiley Accounting and Finance_8

Tham khảo tài liệu 'wiley accounting and finance_8', tài chính - ngân hàng, kế toán - kiểm toán phục vụ nhu cầu học tập, nghiên cứu và làm việc hiệu quả | CHAPTER 6 Performance Measurement Systems on track. Once everyone has agreed on the most appropriate measures there must be further agreement on how each one should be calculated as well as when the measures will be sent back to the management team for periodic review. These up-front decisions ensure that the correct measures will be calculated and that they will be used by managers to improve the business. The balanced scorecard should not supplant all previous measurement systems that a company uses to track its performance. Dozens or even hundreds of measures may be in place already that are extremely useful for the conduct of daily operations and that should be continued. The balanced scorecard is more for the management group who can use it to see how well they are directing the company s performance in reaching its major goals. To this end it should be treated as a high-level set of measurements under which lie a great many other measures that still must be used to transact daily company business. Summary Ratios are an analytical tool used for reporting and control. They have external and internal applications. Externally trade creditors bondholders and banks are interested in the ratios and the trends depicted by a historical progression of those ratios. Internally financial and operating ratios depict how well the firm is doing and serve as an instrument of feedback for control. In trying to determine what a ratio means analysts sometimes resort to rules of thumb which are nothing more than averages. As such they may be inapplicable thus generating faulty comparisons and conclusions. Financial ratios generated internally over time may be the most useful for the firm s purposes. Next you might compare other similar firms ratios generated by trade associations. For financial ratios you might generate liquidity ratios debt ratios long-term liquidity measures coverage ratios and profitability ratios. After financial concerns operating ratios may be generated as

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