Business Performance Measurement Introduction Quiz
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Questions and Answers

What is the purpose of using a set of indicators based on financial analysis for evaluating performance?

  • To simplify the evaluation process (correct)
  • To complicate the evaluation process
  • To slow down business progress
  • To confuse the results

What is the advantage of finding a single indicator that can monitor the accomplishment of all goals?

  • Complicates goal evaluation
  • Allows for easy expression of results (correct)
  • Reduces productivity
  • Increases process costs

Why is measuring business performance considered vital?

  • To increase financial problems
  • To avoid monitoring business growth
  • To complicate business growth
  • To lower process costs and improve productivity (correct)

What is a common characteristic of traditional approaches for measuring performance?

<p>Focus on profit maximization (D)</p> Signup and view all the answers

Why does the application of certain methods for monitoring performance reduce versatility of use?

<p>To limit the versatility of use (B)</p> Signup and view all the answers

What does measuring the actual performance against intended goals help businesses achieve?

<p>Protects against financial or organizational problems (B)</p> Signup and view all the answers

What does business performance usually refer to in practice?

<p>The company's ability to profit from resources and achieve objectives (D)</p> Signup and view all the answers

What are Key Performance Indicators (KPIs) used for in evaluating business performance?

<p>Measuring the success in achieving company goals (C)</p> Signup and view all the answers

What could be a disadvantage of focusing on one goal for evaluating business performance?

<p>Ignoring other important goals of the company (A)</p> Signup and view all the answers

What is a potential advantage of having a hierarchic system for a company's goals?

<p>Ensuring all goals are equally important (C)</p> Signup and view all the answers

How does the text define business performance?

<p>The company's ability to profit from resources and achieve objectives (B)</p> Signup and view all the answers

What are traditional and modern indicators used for in evaluating business performance?

<p>Evaluating and measuring a company's achievements (A)</p> Signup and view all the answers

What is the basic criterion for evaluating the investment in a company and its effectiveness?

<p>Net Present Value (D)</p> Signup and view all the answers

Which type of indicators focuses on connecting all company activities to increase the value of invested capital by the company's owners?

<p>Modern Indicators based on Value Management (C)</p> Signup and view all the answers

What does Value Management strive to maximize for the company's owners?

<p>Share of Profit (D)</p> Signup and view all the answers

Which indicator can indicate in what area a company should improve to achieve its strategic goals?

<p>Net Present Value (C)</p> Signup and view all the answers

In Value-Based Management, what does the increased value of invested capital aim to benefit?

<p>Company Owners (D)</p> Signup and view all the answers

What is the main focus of Modern Indicators based on Value Management?

<p>Enhancing Shareholder Value (C)</p> Signup and view all the answers

What type of decisions do operating decisions deal with?

<p>Daily operations decisions (A)</p> Signup and view all the answers

Which financial parameters must be satisfied for an investment to be considered?

<p>Acceptable forecasted cash flows (D)</p> Signup and view all the answers

What determines whether accounts receivable and inventories are financed through short-term or long-term sources?

<p>Appetite of top management for risk (D)</p> Signup and view all the answers

Under what conditions can a company declare cash dividends?

<p>Sufficient retained earnings and cash (D)</p> Signup and view all the answers

What happens to a company's retained earnings when cash dividends are declared?

<p>They go down by the amount of the dividend declaration (B)</p> Signup and view all the answers

What is the role of the VP for Finance in determining how to finance working capital accounts?

<p>Determining financing sources for working capital accounts (D)</p> Signup and view all the answers

What does financial structure involve?

<p>Division of capital into own capital and long-term foreign capital (C)</p> Signup and view all the answers

What is the responsibility of a VP for Finance in terms of financing decisions?

<p>Making decisions regarding both long-term investments and working capital (B)</p> Signup and view all the answers

Which group of subjects are considered external users of the results of business performance?

<p>Competitors (D)</p> Signup and view all the answers

What does the term 'capital budgeting analysis' refer to?

<p>Technique used to determine the financial viability of long-term investments (D)</p> Signup and view all the answers

How is the division of users of business performance results classified according to the text?

<p>Internal and external users (A)</p> Signup and view all the answers

What is a key aspect discussed in the text related to the structure of capital?

<p>Interest or no interest of foreign capital (A)</p> Signup and view all the answers

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