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acca P5
PAPER P5 

DECEMBER 2011 REVISION

PERFORMANCE MEASUREMENT (1)
FINANCIAL PERFORMANCE:

GROWTH:

Revenue / Profits / EBITDA / Market Share

PROFITABILITY:

Absolute profit / ROCE / Profit margin

GEARING: Gearing ratio
LIQUIDITY:

Current ratio / Net cash flow

SHAREHOLDERS:

EPS / Share price / PE ratio

Always comment on any significant changes (e.g. new issue of shares) and likely reasons/effects
(e.g. new investment - therefore possibly more profit in the future)

For latest course notes, free audio & video lectures, support and forums please visit

PAPER P5 

DECEMBER 2011 REVISION

PERFORMANCE MEASUREMENT (2)
FITZGERALD AND MOON’S BUILDING BLOCKS

Look at performance under six headings:
*

FINANCIAL

*

QUALITY

*

FLEXIBILITY

*

EFFICIENCY (resource utilisation)

*

INNOVATION

*

COMPETITIVENESS

For latest course notes, free audio & video lectures, support and forums please visit

PAPER P5 

DECEMBER 2011 REVISION

PERFORMANCE MEASUREMENT (3)
KAPLAN & NORTON’S BALANCED SCORECARD
The Four Perspectives
The Balanced Scorecard groups performance measures into four general perspectives:

Financial perspective;
Customer perspective;
Internal process perspective;
Innovation and Learning perspective.

According to each perspective of the Balanced Scorecard, a number of key performance indicators can be used such as:
Financial
Cash flow
Return on Investment
Return on capital employed
Return on equity
Customer
Delivery Performance to Customer - by Date
Delivery Performance to Customer - by Quality
Customer satisfaction rate
Customer retention rate
Internal Business Processes
Number of Activities
Accident Ratios
Equipment Effectiveness
Innovation and Learning
New innovations
Training per employee
Internal Promotions %
Employee Turnover

Under each perspective we should have a Goal; a Measure; and a Statistic
E.g. under the Financial
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