Which of the following is considered to be an advantage of using both nonfinancial and financial information in the balanced scorecard?
A)Nonfinancial information is most helpful in analyzing a company's past performance, while financial information is most useful in evaluating potential future performance.
B)Nonfinancial information provides the short-term perspective while financial information provides the long-term perspective of performance.
C)Nonfinancial information reflects the company's current and potential competitive advantage, while financial information tends to focus on a firm's achieved financial performance.
D)Nonfinancial information should be included with financial information because it is more reliable than financial information.

Question

Quizplus · Accepted Answer

Nonfinancial information often reflects important aspects of a company's operations, such as customer satisfaction, product quality, and employee engagement, that are not captured in financial statements. These factors can be key drivers of the company's overall performance and competitive advantage. By incorporating these nonfinancial measures into the balanced scorecard alongside financial measures, a more comprehensive and well-rounded view of the company's performance can be obtained. Financial information tends to focus more on the company's past financial performance, while nonfinancial information can reflect both past and potential future competitive advantage. Therefore, using both nonfinancial and financial information together in the balanced scorecard can provide a more complete understanding of a company's performance.

Which of the Following Is Considered to Be an Advantage