SHORT AND LONG TERM MEASURES OF PERFORMANCE

Question 1

What is SHORT AND LONG TERM MEASURES OF PERFORMANCE

Answer 1

The short term measures performance over the course of a year

Question 2

How does a business consider it’s performance

Answer 2

Profits and profitability

Liquidity measures

Productivity measures - labour productivity, inventory turnover

Dividend payments

Question 3

What do long term measures of performance indicate?

Answer 3

Long term measures of performance: Indicate the likelihood a business will be able to generate sustainable profits

Question 4

How can you identify a business being able to generate sustainable profits

Answer 4

% of profit for the year that is retained (reinvested into the business) to improve the business

% of turnover invested in market research / R&D (Research and development), staff training

Customer satisfaction levels

Staff morale

Corporate culture - Allowing staff to develop new ideas like Google has done. Google used to only be a search engine, now they do: Gmail, documents, adverts etc.

Ethical measures

Environmental measures