The Key to Using Key Performance Indicators to Drive Performance

question 15

True/False

The key to using key performance indicators to drive performance is to understand the cause-and-effect relationships they represent.

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Definitions:

Capital Leases

A lease classified as an asset on a company's balance sheet, indicating that the lessee has control over and assumes risk of ownership for the leased asset.

Working Capital

The difference between a company's current assets and current liabilities, indicating the short-term financial health and operational efficiency.

Cash Flow Statement

An overview in financial form that captures the entirety of cash entering from operational undertakings and external funding, plus the cash exiting to cover business processes and investment actions within a set period.

Operating Activities

Activities that relate to the primary operations of a company, such as selling products or services, and are reflected in the cash flow statement.