Companies will investigate and integrate tools to effectively evaluate themselves from both a financial and nonfinancial perspective. Both come with various advantages and can assist in painting a more complete picture of how a business has performed. Why would a company choose to look at a financial measure?
A) The company has concerns about its Earnings per Share trends over the past five years.
B) The company is more concerned with ongoing performance as compared to how numbers ended in the most recent fiscal year.
C) The company would like to better understand why their inventory turnover has decreased.
D) The company would like to determine whether it should increase spending on research and development to increase variety in customer offerings.

Question

Quizplus · Accepted Answer

This question requires familiarity with financial and nonfinancial measures used by a company to evaluate its performance. Choice A is correct because it is describing an evaluation of past results rather than something is currently ongoing, and it is a quantitative measure. The other three choices describe the use of nonfinancial measures for various tasks.

Companies Will Investigate and Integrate Tools to Effectively Evaluate Themselves