February 2007
Intermediate to advanced
456 pages
15h 57m
English
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Chapter 5. Performance Measurement Systems
This chapter contains the 28 most important performance measurement ratios for a CFO to use, covering asset utilization, operating performance, cash flow, liquidity, solvency, return on investment (ROI), and market performance. Each measurement description includes an overview, notes on how to derive the calculation, and how it is used in an example.
Creating a Performance Measurement System
If a CFO were in favor of using all 28 of the measurements listed in this chapter, he or she might spend a great deal of time compiling the calculations, which is not a good use of time. Instead, one should see if the accounting software currently in use can automatically calculate this information. If not, then the task should be handed off to a financial analyst to calculate on an electronic spreadsheet.
Another issue for a performance measurement system is consistency of calculations. It is a simple matter to show enhanced performance measurements simply by deleting a few elements from a calculation; to avoid this, the CFO should spend a considerable amount of time formally laying out the precise definition and calculation methodology for each performance measurement. If there is some perceived risk that the measurements will be altered even with these instructions in place, then the internal audit team should be asked to review the measurements from time to time. If there is a good reason for altering a calculation at some point in the future, then ...
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O’Reilly covers everything we've got, with content to help us build a world-class technology community, upgrade the capabilities and competencies of our teams, and improve overall team performance as well as their engagement.Julian F.
I wanted to learn C and C++, but it didn't click for me until I picked up an O'Reilly book. When I went on the O’Reilly platform, I was astonished to find all the books there, plus live events and sandboxes so you could play around with the technology.Addison B.
I’ve been on the O’Reilly platform for more than eight years. I use a couple of learning platforms, but I'm on O'Reilly more than anybody else. When you're there, you start learning. I'm never disappointed.Amir M.
I'm always learning. So when I got on to O'Reilly, I was like a kid in a candy store. There are playlists. There are answers. There's on-demand training. It's worth its weight in gold, in terms of what it allows me to do.