30 Questions
What is the purpose of using a set of indicators based on financial analysis for evaluating performance?
To simplify the evaluation process
What is the advantage of finding a single indicator that can monitor the accomplishment of all goals?
Allows for easy expression of results
Why is measuring business performance considered vital?
To lower process costs and improve productivity
What is a common characteristic of traditional approaches for measuring performance?
Focus on profit maximization
Why does the application of certain methods for monitoring performance reduce versatility of use?
To limit the versatility of use
What does measuring the actual performance against intended goals help businesses achieve?
Protects against financial or organizational problems
What does business performance usually refer to in practice?
The company's ability to profit from resources and achieve objectives
What are Key Performance Indicators (KPIs) used for in evaluating business performance?
Measuring the success in achieving company goals
What could be a disadvantage of focusing on one goal for evaluating business performance?
Ignoring other important goals of the company
What is a potential advantage of having a hierarchic system for a company's goals?
Ensuring all goals are equally important
How does the text define business performance?
The company's ability to profit from resources and achieve objectives
What are traditional and modern indicators used for in evaluating business performance?
Evaluating and measuring a company's achievements
What is the basic criterion for evaluating the investment in a company and its effectiveness?
Net Present Value
Which type of indicators focuses on connecting all company activities to increase the value of invested capital by the company's owners?
Modern Indicators based on Value Management
What does Value Management strive to maximize for the company's owners?
Share of Profit
Which indicator can indicate in what area a company should improve to achieve its strategic goals?
Net Present Value
In Value-Based Management, what does the increased value of invested capital aim to benefit?
Company Owners
What is the main focus of Modern Indicators based on Value Management?
Enhancing Shareholder Value
What type of decisions do operating decisions deal with?
Daily operations decisions
Which financial parameters must be satisfied for an investment to be considered?
Acceptable forecasted cash flows
What determines whether accounts receivable and inventories are financed through short-term or long-term sources?
Appetite of top management for risk
Under what conditions can a company declare cash dividends?
Sufficient retained earnings and cash
What happens to a company's retained earnings when cash dividends are declared?
They go down by the amount of the dividend declaration
What is the role of the VP for Finance in determining how to finance working capital accounts?
Determining financing sources for working capital accounts
What does financial structure involve?
Division of capital into own capital and long-term foreign capital
What is the responsibility of a VP for Finance in terms of financing decisions?
Making decisions regarding both long-term investments and working capital
Which group of subjects are considered external users of the results of business performance?
Competitors
What does the term 'capital budgeting analysis' refer to?
Technique used to determine the financial viability of long-term investments
How is the division of users of business performance results classified according to the text?
Internal and external users
What is a key aspect discussed in the text related to the structure of capital?
Interest or no interest of foreign capital
Test your knowledge on measuring and evaluating business performance, including traditional and modern indicators, main factors affecting performance, and users of performance measurement results.
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