Performance Measurement (2)

Question 1

Limitations of ratios (useful)

Answer 1

Not useful on their own

Question 2

Limitations of ratios (carefully)

Answer 2

Must be carefully defined

Question 3

Limitations of ratios (inflation)

Answer 3

Inflation needs to be adjsuted for - often forgotten

Question 4

Limitations of ratios (calculating)

Answer 4

Different basis of calculating between companies

Question 5

Limitations of ratios (historic)

Answer 5

Based on hisotircal costs - is this an accurate reflection of the future

Question 6

Strengths of ratios (measure)

Answer 6

Easier to understand than absolute measures

Question 7

Strengths of ratios (changes)

Answer 7

Easier to look at changes over time`

Question 8

Strengths of ratios (performance)

Answer 8

Puts performance into context

Question 9

Strengths of ratios (targets)

Answer 9

Can be used as targets

Question 10

Strengths of ratios (results)

Answer 10

Summarise results

Question 11

Limitations of ratios (monetary terms)

Answer 11

Focus only on variables expressed in monetary terms, ignore non-monetary variables

Question 12

Limitations of ratios (past)

Answer 12

Focus on past

Question 13

Limitations of ratios (convey)

Answer 13

Do not convey full picture of a company’s performance

Question 14

Limitations of ratios (short-term)

Answer 14

Focus on the short-term

Question 15

Performance measures in service quality?

Answer 15

Number of complaints

Proportion of repeat bookings

Customer waiting time

Question 16

Performance measures in personnel?

Answer 16

Staff turnover

Days last throguh absenteeism

Training tike per employee