Chapter12: Balanced Scorecard And Other Performance Measures
Section: Chapter Questions
Problem 10Q: What are the six characteristics of a good performance measurement system?
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What would the effect of the failure in the ratio measurement?
Expert Solution
Step 1 Introduction
Ratio measurement in terms of financial world depicts that a single accounting figure by itself may not communicate any meaningful information but when expressed as a relative to some other figure, it may definitely provide some significant information.
Ratio measurement is a comparison of different numbers from balance sheet, income statement and cash flow statement against the figures of previous years, other companies, the industry, or even the economy in general for the purpose of financial analysis.
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