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What Is the Balanced Scorecard? What Are the Four Areas

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What is the balanced scorecard? What are the four areas to be addressed?


Definitions:

Financial Leverage

The use of borrowed funds to increase the potential return on investment, often measured by the ratio of a company's debt to its equity.

Financial Risk

The possibility of losing money on an investment or business venture; includes market risk, credit risk, liquidity risk, and operational risk, among others.

Shareholders

Individuals or entities that own shares in a corporation, granting them rights to dividends and a say in company affairs proportional to their shareholding.

ROCE

Return on Capital Employed, a financial metric that measures a company's profitability and the efficiency with which its capital is employed.

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