Data Analytics For Accounting
19th Edition
ISBN: 9781260375190
Author: RICHARDSON, Vernon J., Teeter, Ryan, Terrell, Katie
Publisher: Mcgraw-hill Education,
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Textbook Question
Chapter 7, Problem 1MCQ
What would you consider to be Financial Performance KPIs?
- a. Total Shareholder Return
- b. Customer Profitability Score
- c. Market Growth Rate
- d. Klout Score
Expert Solution & Answer
To determine
Identify the items which would be considered as Financial Performance KPIs.
Answer to Problem 1MCQ
Option a.
Explanation of Solution
Key Performance Indicator (KPI): This is a specific type of performance metric that helps managers in keeping track of performance and strategic objectives and is an important factor that impacts the strategy and decision making. Organizations use these KPI data for evaluating the performance of the employees. KPI determination depends on particular strategy that is unique for each organization.
Financial Performance KPIs: The financial performance KPIs are as follows:
| 1 | Net Profit |
| 2 | Net Profit Margin |
| 3 | Gross Profit Margin |
| 4 | Operating Profit Margin |
| 5 | EBITDA |
| 6 | Revenue Growth Rate |
| 7 | Total Shareholder Return (TSR) |
| 8 | Economic Value Added (EVA) |
| 9 | Return on Investment (ROI) |
| 10 | Return on Capital Employed (ROCE) |
| 11 | Return on Assets (ROA) |
| 12 | Return on Equity (ROE) |
| 13 | Debt-to-Equity (D/E) Ratio |
| 14 | Cash Conversion Cycle (CCC) |
| 15 | Working Capital Ratio |
| 16 | Operating Expense Ratio (OER) |
| 17 | CAPEX to Sales Ratio |
| 18 | Price-to-Earnings Ratio (P/E Ratio) |
Justification for correct and incorrect answer:
a.
This is the correct choice as the total shareholder is one of the Financial Performance KPIs. This is one of the common indicators of the financial performance of the entity.
b.
This option is an incorrect option because customer profitability score is one of the customer KPIs and not Financial Performance KPIs.
c.
This option is incorrect because the market growth rate is one of the marketing KPIs and not Financial Performance KPIs.
d.
This is an incorrect option because the Klout Score is one of the marketing KPIs and not Financial Performance KPIs.
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Chapter 7 Solutions
Data Analytics For Accounting
Ch. 7 - What would you consider to be Financial...Ch. 7 - Prob. 2MCQCh. 7 - What does KPI stand for? a. Key performance index...Ch. 7 - Prob. 4MCQCh. 7 - Prob. 5MCQCh. 7 - On a Balanced Scorecard, which is not included as...Ch. 7 - Prob. 7MCQCh. 7 - Prob. 8MCQCh. 7 - Prob. 9MCQCh. 7 - Prob. 10MCQ
Ch. 7 - We know that a Balanced Scorecard is comprised of...Ch. 7 - Prob. 2DQCh. 7 - Amazon, in the authors opinion, has cared less...Ch. 7 - For an accounting firm like PwC, how would the...Ch. 7 - For a company like Walmart, how would the Balanced...Ch. 7 - Prob. 6DQCh. 7 - If the data underlying your digital dashboard are...Ch. 7 - In which of the four components of a Balanced...Ch. 7 - From Exhibit 7-5, choose 5 Financial Performance...Ch. 7 - From Exhibit 7-5, choose 10 Employee Performance...Ch. 7 - From Exhibit 7-5, choose 10 Marketing KPIs to...Ch. 7 - Prob. 4PCh. 7 - If ROA is considered a key KPI for a company, what...Ch. 7 - If Time to Market is considered a key KPI for a...Ch. 7 - Prob. 7P
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