The achievement of financial objectives tends to be a leading indicator of a company's performance, while the achievement of strategic objectives tends to be a lagging indicator of a company's future financial performance. True or false? Support and explain your answer.

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Quizplus · Accepted Answer

A company's financial performance measures are actually lagging indicators that reflect the results of past decisions and organizational activities. But a company's past or current financial performance is not a reliable indicator of its future prospects-poor financial performers often turn things around and do better, while good financial performers can fall upon hard times. The best and most reliable leading indicators of a company's future financial performance and business prospects are strategic outcomes that indicate whether the company's competitiveness and market position are stronger or weaker. The accomplishment of strategic objectives signals that the company is well positioned to sustain or improve its future performance.

The Achievement of Financial Objectives Tends to Be a Leading