Companies Are Increasingly Using Nonfinancial Measures to Evaluate Performance

question 38

Essay

Companies are increasingly using nonfinancial measures to evaluate performance. Why? Since these numbers do not come from the company's financial records, why are they used?

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Definitions:

Budget Reform

The process of revising budgetary policies and practices to improve efficiency, reduce deficits, and allocate resources according to strategic priorities.

Budget Document

A detailed financial statement presenting a government's or organization's projected revenues and spending for a fiscal period.

Federal Budget Deficit

The financial situation where the federal government's expenditures surpass its revenues within a given fiscal year.

Automatic Stabilizers

Economic mechanisms, such as progressive taxation and welfare spending, that automatically adjust to mitigate economic fluctuations without the need for explicit government action.