7
Performance drivers
Operating performance
Everything, then, must be assessed in money;for this enables men always to exchange their services, and so makes society possible.
ARISTOTLE (384–322 BC)
Operating performance
The two prime ratios that drive return on total assets have been identified:
- margin on sales percentage
- sales to total assets ratio
and these are laid out again for the Example Co. plc in figure 7.1.
It is on these two drivers that managers must concentrate in order to improve performance. However, these ratios cannot be operated on directly. Each is dependent on a whole series of detailed results ...
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