Business Performance Measurement Systems Quiz
44 Questions
0 Views

Choose a study mode

Play Quiz
Study Flashcards
Spaced Repetition
Chat to lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What percentage of the overall grade does the final exam contribute?

  • 75% (correct)
  • 50%
  • 100%
  • 25%

    • The purpose of performance measurement systems (PMS) is solely to convey financial information.

    False

    Name one objective that PMS can assist managers with.

    Communicating to the organization the strategic goals.

    Netflix's library is considered an __________ asset in the entertainment industry.

    <p>intangible</p> Signup and view all the answers

    Match the following business goals with their descriptions:

    <p>Economic and financial goals = Focus on profitability and revenue growth Market share goals = Aim to increase a company’s control within the market Capabilities for learning and innovation = Encourage ongoing development and adaptation Short-term profit goals = Focus on immediate financial performance</p> Signup and view all the answers

    Which of the following balances does a PMS help to manage?

    <p>Balancing short-term results against long-term capabilities</p> Signup and view all the answers

    Current assets include cash, inventory, and receivables.

    <p>True</p> Signup and view all the answers

    How does Netflix's decision to produce its own content impact its asset value?

    <p>It increases the value of its intangible asset, the library.</p> Signup and view all the answers

    What was one of the goals of the 1993 Mission Statement?

    <p>Produce high-quality opera productions</p> Signup and view all the answers

    The Balanced Scorecard was introduced in 1999 to improve operational efficiency.

    <p>False</p> Signup and view all the answers

    What is one of the challenges faced in implementing the Balanced Scorecard?

    <p>Resource-intensive requirements</p> Signup and view all the answers

    The process can be described using the _____ model, which includes input, transformation, and output.

    <p>IPO</p> Signup and view all the answers

    Match the following mission statement updates to their respective years:

    <p>1993 Mission Statement = Produce high-quality opera productions 1999 Mission Update = Build a knowledgeable opera community Balanced Scorecard Introduction = Align strategy and set objectives</p> Signup and view all the answers

    What did ticket sales cover according to the stated figure?

    <p>Less than 40% of operating expenses</p> Signup and view all the answers

    The Balanced Scorecard enhanced transparency of goals and focused on resource allocation.

    <p>True</p> Signup and view all the answers

    What are two themes focused on in the Balanced Scorecard?

    <p>Donor loyalty and artistic reputation</p> Signup and view all the answers

    What is the expected accommodation revenue?

    <p>$4,321,600</p> Signup and view all the answers

    COGS for F&B is 58%.

    <p>True</p> Signup and view all the answers

    What percentage of total revenues do Energy Costs represent?

    <p>3%</p> Signup and view all the answers

    The NPV calculated for the investment is $______.

    <p>9,489,892</p> Signup and view all the answers

    Match the following expenses with their respective percentages of total revenues:

    <p>Insurance = 1% Energy Cost = 3% G&amp;A expenses = 7% Marketing cost = 4%</p> Signup and view all the answers

    The initial budget for the creative aspects of the movie was higher than the adjusted budget.

    <p>True</p> Signup and view all the answers

    What was the total initial budget compared to the revised budget for the movie?

    <p>Initial: $217,900; Revised: $218,000</p> Signup and view all the answers

    What was one of the immediate business priorities for Tiger Airways in 2012?

    <p>Improve safety and risk management systems</p> Signup and view all the answers

    Tiger Airways aimed to achieve a profitability turnaround by reversing a US$80M loss.

    <p>True</p> Signup and view all the answers

    Name one challenge faced by Tiger Airways after its IPO.

    <p>Executive departures</p> Signup and view all the answers

    Tiger Airways needed to stabilize operations and rebuild its brand's ___ in 2012.

    <p>reputation</p> Signup and view all the answers

    Match the following compensation scheme elements to their descriptions:

    <p>Fixed Pay = Attract talent by benchmarking to market rates Short-Term Incentives = Linked to immediate crisis management goals Long-Term Incentives = Align executives with sustainable growth Benefits = Adjusted based on employee level</p> Signup and view all the answers

    What was a key operational metric for Tiger Airways?

    <p>Fleet utilization and cost efficiency</p> Signup and view all the answers

    Employee performance metrics were irrelevant to the financial performance of Tiger Airways.

    <p>False</p> Signup and view all the answers

    What did Tiger Airways focus on aligning with corporate objectives?

    <p>Employee incentives</p> Signup and view all the answers

    What was the revenue of Electa Publishing House in 2019?

    <p>41.7 million euros</p> Signup and view all the answers

    Electa Publishing House has been established since 1950.

    <p>False</p> Signup and view all the answers

    Name one area of activity for Electa Publishing House.

    <p>Publishing, Exhibitions, Bookshops and merchandising, Communications, Sponsorships, events and special projects.</p> Signup and view all the answers

    Electa Publishing House is known for its contribution to ___ culture.

    <p>figurative</p> Signup and view all the answers

    Match the following acquisitions with their respective years:

    <p>Rizzoli Italia illustrati = 2016 Rizzoli International Publications = 2016 Abscondita = 2020</p> Signup and view all the answers

    What is a primary purpose of performance goals?

    <p>For planning and coordination</p> Signup and view all the answers

    Relative performance targets make it easier to manipulate results.

    <p>False</p> Signup and view all the answers

    What are the three major design decisions for contingent incentives?

    <p>The bonus pool, the allocation formula, the type and mix of incentives.</p> Signup and view all the answers

    The allocation formula for performance is typically based on individual performance, business performance, and __________ performance.

    <p>corporate</p> Signup and view all the answers

    Match the performance categories with their typical weight percentages:

    <p>Individual performance = 10% Business performance = 20% Corporate performance = 50%</p> Signup and view all the answers

    What type of target is suggested as being harder to manipulate?

    <p>Revenue-based targets</p> Signup and view all the answers

    Increasing payouts at a constant rate is an effective strategy for adjusting performance incentives for risk.

    <p>True</p> Signup and view all the answers

    Name one intrinsic motivation factor that can enhance employee commitment.

    <p>Interesting work or Involvement.</p> Signup and view all the answers

    Study Notes

    Performance Management

    • Assignment grade: simple average of 2 assignments (25%)
    • Final written exam: 75% essay questions relating to class theory and case studies.
    • Exam duration: 90 minutes
    • Exam format: exercises and open questions

    PMS (Performance Measurement Systems)

    • PMS components: convey financial information, and influence managerial action
    • Used by managers to influence decision-making

    Business Strategies

    • Defined as how a company creates value, differentiates itself, and competes in the marketplace.
    • Measurable business goals: economic, financial, market share, capabilities

    Design and Use of PMS to Support Strategy

    • Balancing profit, growth, and control
    • Balancing short-term results with long-term capabilities and growth
    • Balancing performance expectations of different stakeholders
    • Balancing opportunities and attention
    • Balancing human behavior motivations

    Growth in Sales

    • Increase in assets
    • Sales example: 12,000
    • Days of Sales Outstanding (DSO): 90 days
    • Receivables: 3,000
    • Sales example 2: 18,000 (1500 x 12)
    • DSO: 90 days
    • Receivables: 4,500 (50% increase)

    Current Assets

    • Cash, inventory, and receivables

    Fixed Assets

    • Tangible: equipment, machinery, buildings
    • Intangible: patents, rights, financial assets

    Liabilities vs. Equity

    • Balancing profit, growth, and control

    Performance Management Drivers/Measures

    • Double-digit sales growth
    • Extension of brands into new product categories
    • Increase sales in new markets
    • Maintaining #1 market share
    • Measures: number of sales, number of consumers, market share, profitability, cosmetic consumption, sales (items/value) in new markets

    Netflix Case

    • Library of a company is the most relevant asset.
    • The value of a company is evaluated by its library.
    • High investment needed to create its own library.
    • The value of a company is evaluated by its Library.
    • Products become obsolete.
    • Purchase of shares to avoid hostile takeover

    Balancing Opportunities & Attention

    • Focused on critical measurement to focus time and attention on opportunities
    • New products, new services
    • New markets
    • Striking alliances
    • Branching into other industries

    Balancing Human Behavior

    • Needs that have been satisfied are no longer motivating
    • Maslow's hierarchy of needs
    • Organizational blocks of people

    Corporate vs. Business Strategy

    • Different levels of investment decisions to build up the ability to counter competitors

    Analyzing Industry Attractiveness

    • Market size
    • Expected market growth rate
    • Number of significant competitors
    • Concentration of competitors
    • Profitability of the entire sector
    • Barriers to entry into the sector

    Key Strategic Options

    1. Focus on Agricultural Production (no investment) ○ Selling grapes at a fixed price. ○ Minimal operational changes.
    2. Outsource Wine Production & Build Brand ○ Brand building investment. ○ Produce 700,000 bottles annually ○ Costs: €1.5/bottle.
    3. Build a Limited Capacity Wine Processing Plant ○ Investment for plant and branding ○ Produce 200,000 bottles in-house; outsource the rest. ○ Revenue streams: modern trade and specialty shops.
    4. High-End Winery with Tourism & Events ○ Investment for architectural plant with advanced technology ○ Production of 700,000 bottles ○ Focus on wine tourism and B2C sales.

    Financial Metrics

    • Return on Assets (ROA)
    • Return on Equity (ROE)
    • Profitability
    • Examples: Option D has the highest revenue potential, but substantial investment.

    Balanced Scorecard Perspectives

    • Financial, customer, internal process, and learning & growth.
    • Specifics of each aspect

    Performance Measurement in Financial Statements

    • Formal routines for organizations to communicate financial/economic results.
    • Used by investors and lenders.

    Typical Income Statement Items

    • Revenue
    • Expenses
    • Raw materials used
    • Wages expense
    • Rent expense
    • Interest expense
    • Advertisement expense
    • Insurance expense
    • Repair expense
    • Income tax expense
    • Loss on disposal

    Income Statement Items - Organization

    • Operating activities (day-to-day business)
    • Non-recurring activities (unusual activities)
    • Write-downs of inventories or PP&E
    • Reversals of write-downs
    • Restructuring costs
    • Disposals of PP&E or investments
    • Litigation settlements

    Income Statement Items

    • Net operating sales (cost of goods sold), gross profit
    • Other operating revenues (SG&A expenses)
    • Operating income
    • Non-recurring revenues (non-recurring expenses), EBITDA
    • EBITDA - amortization and depreciation = EBIT
    • Interest and financial income - financial charges = EBT
    • EBT - Taxes = Net Income (from continuing operations)
    • Cost of Goods Sold (COGS) - total value of goods sold

    Balance Sheet

    • Assets (investments)
    • Liabilities and Equity (funding sources)
    • Total Assets = Total Liabilities + Total Equity

    Ratio Analysis

    • Profitability
    • Solvency
    • Liquidity

    Studying That Suits You

    Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

    Quiz Team

    Related Documents

    Performance Measurement Word Document PDF

    Description

    Test your understanding of performance measurement systems, their objectives, and key concepts related to business and finance. This quiz covers topics like the Balanced Scorecard, asset management, and the impact of strategic decisions in organizations. Perfect for students and professionals looking to enhance their business acumen.

    More Like This

    Use Quizgecko on...
    Browser
    Open
    Browser
    Browser