A company reports the following in a performance dashboard: sales growth, customer complaints, staff turnover and defect rate. What is the main purpose of including non-financial measures with financial ones?
Answer and explanation
Correct answer: D. To give a broader view of performance and indicate future financial results
- Step 1: Financial measures report past results.
- Step 2: Non-financial measures, such as complaints and defects, help predict future financial performance.
- Step 3: They give a more balanced view.
Answer
To give a broader view of performance and indicate future financial results.
Why not the others: They are used alongside financial measures, not as replacements. There is no regulatory requirement, and a longer report is not an aim. To avoid having to set targets: Non-financial measures need targets too.
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