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

question 55

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.
• E) it forces managers to put equal emphasis on financial and strategic objectives.

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Definitions:

Debt-equity Ratio

A financial leverage gauge determined by the division of a company's complete liabilities by its stockholders' equity.

Bankruptcy Costs

Expenses and fees incurred during the process of declaring bankruptcy, which may include legal fees, accounting costs, trustee fees, and other associated costs.

Direct Bankruptcy Costs

Expenses directly associated with a company's bankruptcy process, including legal and administrative fees.

Indirect Bankruptcy Costs

Expenses that are not directly tied to the bankruptcy filing process but arise due to the reduced ability to conduct business efficiently, such as lost sales, diminished reputation, and impaired creditworthiness.