A "Balanced Scorecard" That Includes Both Strategic and Financial Performance

question 37

Multiple Choice

A "balanced scorecard" that includes both strategic and financial performance targets is a conceptually strong approach for judging a company's overall performance because:

• A) it assists managers in putting roughly equal emphasis on short-term and long-term performance targets.
• B) it entails putting equal emphasis on good strategy execution and good business model execution.
• C) a balanced-scorecard approach pushes managers to avoid setting objectives that reflect the results of past decisions and organizational activities.
• D) financial performance measures are lagging indicators that reflect the results of past decisions and organizational activities,whereas strategic performance measures are leading indicators of a company's future financial performance and business prospects.
• E) it forces managers to put equal emphasis on financial and strategic objectives.

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Definitions:

Bankruptcy

A legal process involving a person or business that is unable to repay outstanding debts, resulting in the selling off of assets to pay creditors.

Appraisers

Professionals who estimate the value of property, such as real estate or fine art, often used for tax, insurance, or sale purposes.

Earnings per Share

A company's profit divided by its number of outstanding shares of stock, indicating the portion of a company's profit allocated to each share.

Cost of Debt

The effective rate that a company pays on its total debt, serving as a measure of the risk and a way to gauge the company's ability to manage its debt effectively.