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The role of financial performance assignment research techniques towards determining financial performance measures and targets


Task: How can organisations use financial performance assignmentresearch strategies to determine feasible financial performance measures and targets


This financial performance assignmentwill focus on how organisations can determine effective financial performance measures and targets. In the financial world, "financial performance" refers to a company's complete profitability, which includes all of the financials of assets, equity, liabilities, expenses, and revenue of the company. It is based on a range of business formulas that allow users to get an accurate picture of a company's potential for success. Individual company health and position are determined by evaluating financial performance as well as other standards used internally. External users analyze a company's financial performance in order to determine if there are investment prospects and whether or not a firm is worth it. In order to establish a company's overall success, it is necessary to first examine the company's financial accounts. Through the financial performance assignment research it is clear that its normal to be intimidated while beginning a career in finance. It's crucial for managers to be conversant with the following financial metrics. It is hoped that this may help you better understand and debate finanScial concerns.

financial performance assignmentDiscussion:
Key performance indicators (KPIs) in finance identified on this financial performance assignment are measurements that businesses use to monitor, evaluate, and assess the financial health of the company (DeryaFindik et al., 2016). The key performance indicators (KPIs) for finance can be broken down into a number of different classifications, such as profitability, liquidity, solvency, efficiency, and evaluation with a view to getting a better sense of how financially well the company, the management must understand and implement these measurements. Leaders will be better able to contribute to significant strategic goals after obtaining this knowledge and putting it to use in their department or team's goals. In the form of email updates, dashboards, or reports, these KPIs and metrics should be available to management on a weekly or monthly basis. Even if the measurements aren't readily available, you can still become familiar with them by reviewing the financial statements (Gülnaz ENGÜL GÜNE, 2020). It is called "financial statement analysis" when vital financial data are studied to have a better knowledge of how the firm operates The following are some of the most important financial statements identified on the financial performance assignmentthat require further study, especially for managers, despite the fact that there is a wide variety to choose from:

The sheet of balance

At a given point in time, a sheet of balance is a statement of liabilities, assets, and equity of the organization.

The statement of income

Sales, expenses, and earnings are summarised in this statement, which is called a statement of income.

Statement of cash flow

The Statement of cash flow shows how a company's operations, as seen in the Sheet of balance and Statement of income, impact its cash flow. Operating, investing, and financing all fall into these three categories (Hakan, et al., 2020).

Annual report

It is a document that provides an overview of the company's operations and financial status, as well as insights and narratives from the company's top executives.

Table 1: Features in Financial statement
(Source: self-made)

Managers and other important stakeholders need to be aware of these measures, which are commonly included in the financial reports stated above. It is also observed on this financial performanceassignment that the annual report that a company sends to its shareholders often includes measures of the financial success of that company (Aye Topal, 2021). Such measures should be objective and coupled with relevant data, such as firm performance, to offer context. Starbucks’ 2009 annual report covers net sales, operating income, and cash flow growth over five years.

Gross profit margin

Gross profit margin quantifies how much money stays after removing the cost of products sold. The cost of sold products does not include operational expenditures, interest, or taxes. Gross profit margin measures a product’s profitability before overheads.

Net profit margin

Net profit margin is the proportion of sales and other income remaining after deducting product costs, operating expenses, interest, and taxes. The net profit margin measures the company’s overall profitability and includes product and other costs.

Working capital

Working capital is a measurement of the available operating liquidity that an organization has, and it is a measurement that can be used to support day-to-day activities. Working capital can be used to fund an organization’s day-to-day activities.

Current ratio

The current ratio is a type of liquidity ratio that can be used to determine whether or not an organization is able to meet its short-term obligations, also known as obligations that are due within the next year, by utilizing its current assets and liabilities. Through the financial performanceassignmentresearch, it has been established that this can be done by comparing the organization’s current assets and liabilities to its current debts.

Quick ratio

The quick ratio is a measure of a company’s capacity to meet short-term financial obligations. Only cash, marketable securities, and accounts receivable make up the numerator of the fast ratio. Don’t assume that inventory can be easily converted into cash.

Cash Leverage

Debt can be used as leverage to buy assets. All equity-financed assets are multiplied by one. The multiplier increases from one as debt grows, indicating leverage and raising business risk.

Debt-to-equity ratio

Measures how much of a company’s capital is spent on debt and how much of that money is invested in equity (Cardoso et al., 2016). This ratio shows how well equity can cover the debt in the event of a corporate downturn.

Inventory turnover

An organization’s inventory turnover is the frequency with which its total inventory is sold within a given accounting period. Is the corporation overstocking or understocking

Total asset turnover

The ability of a company to bring out revenue from its assets is measured by its total turnover of assets. Firm performance is enhanced when the turnover ratio is higher.


It is calculated by dividing net profit by shareholders’ equity. ROE is a measure of profitability It demonstrates the potential value of equity investments for the company.


By dividing the net profit by assets average, ROA and ROE may both be calculated. It demonstrates the company’s ability to effectively manage its assets in order to maximize earnings.

Operating cash flow

Operating cash flow is the amount of money it makes from its operations. This metric may be positive, indicating that funds are available for expanding operations, or it may be negative, indicating that additional funding is required. The cash flow statement can be used to estimate operating cash flow either directly or indirectly.


Seasonality measures how the year affects your company’s finances. This measure helps you filter out confounding elements in industries with high and low seasons.


Table 2: Terms in financial measures and targets
(Source: self-made)

From the literature used on this financial performance assignment, Finance performance measurements are a metric that may be used to evaluate how well a company is doing. To better comprehend how well the businesses are competing in their respective market and to better predict what the future holds for their organizations, most executives, investors, and other stakeholders keep a close eye on and evaluate measures like profitability, stock price, and sales (Enzet al., 2021). However, these measurements only offer a view of the overall functioning of the business.

Performance referents are also necessary to judge whether or not an organization is operating effectively. For the purpose of understanding where a business stands in terms of certain performance metrics, a performance reference is something that is used to compare it to. Consider, for example, a corporation that made a 20% profit margin in 2011. This may appear to be a good idea at first glance. Nevertheless, let's say that the profit margin for the firm in the year before that, 2010, was 35%, whereas the average profit margin for the industry in 2011 was 40% (Miller et al., 2019). If this scenario had taken place, it is safe to say that the firm in question was a smashing success. It is concerning that the company's performance in 2011 was so poor when measured against these two additional criteria.

The financial performance assignmentresearch also shows it is beneficial to utilize a wide variety of performance measures and referents. This is due to the fact that various measures and referents offer varying pieces of information regarding the operation of an organization. Additionally, a large number of regularly applied measurements, such as accounting ratios, are heavily centered on the past. Stakeholders can see the results of past actions through these metrics, but they don't reveal much about how a company will perform in the future. When an organization is properly managed, it is very necessary for it to acquire a profound comprehension of the occurrences or acts that encourage strong (or stronger) performance. and ensures that these events and actions are also measured (Laari et al., 2019). As an illustration, increasing the amount of product training for the sales team leads to greater sales in the subsequent quarter. However, the sheer quantity of performance indicators and benchmarks necessary to evaluate an organization's performance can be overwhelming. 788 distinct combinations of financial measures and referents were used in only one year in the restaurant industry alone, according to the findings of an investigation into the performance metrics that were included in the annual reports of various restaurant groups. As a result, executives have to select a comprehensive yet manageable group of performance metrics and referents to concentrate on. The financial performance assignmentresearch also shows the effectiveness of an organization is directly related to the execution of its internal business processes (Hoechneret al., 2020). These metrics help provide a solution to the essential issue, "In what should we excel" Some examples are the amount of time needed to deliver a service or manufacture a product produced by the organization. Another instance of this sort of financial assessment is the amount of time it takes to develop and launch a brand-new product onto the market.

The importance of such long-term financial performance measurements is recognised by numerous companies, including Starbucks. As a result, the company meticulously reviews its operations with the intention of reducing the amount of time it takes to complete orders. In a recent example, efficiency specialists from Starbucks challenged their staff members to build a Mr. Potato Head in order to get a clearer sense of how the work can be done more quickly (Adegbite et al., 2018). This activity's objective was to assist Starbucks workers in general in reaching the same level of productivity as the company's top performers, who are able to complete each order in an average of twenty-five seconds.

The terms "customer attraction," "customer satisfaction," and "customer retention" are all related to "customer performance" measures. The answer to the financial performance assignmentessential question "How do our customers regard us" can be gleaned from these metrics. The overall number of new customers and the percentage of existing customers who make additional purchases are two examples. Recurring customers are an important part of Starbucks' success, and the company has introduced a number of initiatives to better serve and persuade them to return. For instance, Starbucks provides all customers with free access to Wi-Fi and gives free drinks to consumers who are loyal to the company. Additionally, Starbucks provides cards with codes for free iTunes downloads in order to entice customers to return multiple times (Parmenter, 2020). The featured tracks are rotated on a consistent basis, which encourages visitors to return frequently. Supply-chain management indicators are an essential financial component for companies that produce tangible products, in contrast to businesses that focus on providing services. Just-in-time supply-chain management initiatives like those implemented by Walmart and General Motors are excellent examples of how to increase profitability through effective supply chain management. It goes without saying that in order to reduce supply inventory, the data must be precise as well as up to date (otherwise, you will run out of crucial parts, which will cause the manufacturing line to stop...). After acquiring its own satellite system in the early '90s, Walmart was able to track individual sales and order fresh products to replenish its shelves every eight hours(Omranet al., 2019). There were just enough tires for four hours of automobile assembly at any given moment at General Motors. It was also established on this financial performanceassignment that the metrics of performance that pertain to learning and progress are related to the future. These kinds of measures give the business the insight necessary to answer the question, "Can we continue to develop and create value" Measuring growth and development places a focus on innovation and progress while taking into account that methodologies may and will change through time. As a result, the organization will need to continue to adapt to an ever-changing environment, and one of the necessary adaptations will be the development of new ways to provide value (Omran et al., 2021). It is possible to utilize the number of new abilities that employees gain each year to gauge their growth and development as an indicator of learning and development.

The Starbucks tuition reimbursement program is one of the ways the company encourages its employees to further their education and acquire new talents that may one day be of use to both the company and the individuals themselves. The program is open to any current or former employees of Starbucks who have put in more than a year of service (Nik Abdullah et al., 2022). Starbucks has high hopes that its employees will be able to produce ideas that will be to the company's financial advantage in the future if they receive college degrees and use the knowledge they gain while pursuing those degrees. Additionally, this initiative helps Starbucks identify and retain employees who have shown great performance and financial acumen.
The practice of monitoring performance and setting objectives is highly beneficial to the growth process. Even though many smaller organizations are able to operate satisfactorily without much formal assessment or goal-setting, developing businesses may require the control that processes as these may provide. An important benefit of having a precise measurement system is that it allows you to examine the circumstances that led to any performance modifications, as well as your firm's overall performance. As a result, you are now in a stronger position to proactively manage your performance. One of the most challenging components of performance management identified on thisfinancial performance assignmentis determining which aspects of performance should be measured.

It is known that the most important in this situation is focusing on quantitative criteria that are clearly related to the success drivers in your company and industry. Important performance indicators are the label given to them (KPIs). Consulting the section of this manual that explains how to determine what to measure. It is to be remembered that financial and quantitative are not the same in any way. Even while financial success criteria are among the most commonly used by businesses, nonfinancial measures should not be underestimated. It is the quality of the company's customer service, for instance, that defines the company's performance in the financial segment, then that is what the management should be measuring. Referring to the discussion section of this essay that discusses measuring financial success for more information on how to measure the financial performance of this company. As soon as the management had established a way to track the most important aspects of the company's performance in the financial sector, they should move on to creating performance goals that everyone in your company can work toward to establish a sound financially good environment in the company. This is a natural next step that theleaders have identified a means to measure the important areas that drive the business' performance in finances. The financial performance assignment research shows that strategic financial visions can be difficult to communicate; however, if leaders break their overarching goals into a series of more granular, particular targets, they will find it much easier to manage the process of achieving those financial goals.

Nik Abdullah, Nik Herda ; Krishnan, Shamala ; Mohd Zakaria, AzlizaAzrah ; Morris, Grace Cogent business & management, financial performance assignment 2022, Vol.9 (1) 1080_23311975_2022_2093488&context=PC&vid=44NAP_INST:44NAP_ALMA_VU1&lang=en&search _scope=MyInst_and_CI&adaptor=Primo%20Central&tab=Everything&query=any%2Ccontains%2CRelevance %20of%20Financial%20Performance%20Measures%20and%20Targets&sortby=date_d&offset=0

Omran, Mohamed ;Khallaf, Ashraf ; Gleason, Kimberly ; Tahat, Yasean Total quality management & business excellence, 2021, Vol.32 (5-6), p.652-675 context=PC&vid=44NAP_INST:44NAP_ALMA_VU1&lang=en&search_scope=MyInst_and_CI&adaptor=Primo %20Central&tab=Everything&query=any%2Ccontains%2CRelevance%20of%20Financial%20Performance%20 Measures%20and%20Targets&offset=0

Parmenter, D. (2020). Key performance indicators: developing, implementing, and using winning KPIs (Fourth edition.). Hoboken, New Jersey: performance assignment =L&vid=44NAP_INST:44NAP_ALMA_VU1&lang=en&search_scope=MyInst_and_CI&adaptor=Local%20Search %20Engine&isFrbr=true&tab=Everything&query=any%2Ccontains%2CRelevance%20of%20Financial%20 Performance%20Measures%20and%20Targets&sortby=date_d&facet=frbrgroupid%2Cinclude%2C90074 86344478324543&offset=0

Adegbite, Emmanuel ;Guney, Yilmaz ; Kwabi, Frank ; Tahir, Suleiman Review of quantitative finance and accounting, 2018, Vol.52 (1), p.105-158 &context=PC&vid=44NAP_INST:44NAP_ALMA_VU1&lang=en&search_scope=MyInst_and_CI&adaptor= Primo%20Central&tab=Everything&query=any%2Ccontains%2CRelevance%20of%20Financial%20Performance% 20Measures%20and%20Targets&sortby=rank&offset=0

Hoechner, Benedikt ;Reichling, Peter ; Schulze, Gordon International review of finance, 2017, Vol.17 (4), p.597-610 &context=PC&vid=44NAP_INST:44NAP_ALMA_VU1&lang=en&search_scope=MyInst_and_CI&adaptor= Primo%20Central&tab=Everything&query=any%2Ccontains%2CRelevance%20of%20Financial%20Performance% 20Measures%20and%20Targets&sortby=rank&offset=0

Laari, Sini ;Töyli, Juuso ; Ojala, Lauri Business strategy and the environment, 2018, Vol.27 (7), p.872-883 2135025475&context=PC&vid=44NAP_INST:44NAP_ALMA_VU1&lang=en&search_scope=MyInst_ and_CI&adaptor=Primo%20Central&tab=Everything&query=any%2Ccontains%2Cfinancial%20measures %20in%20supply%20chain%20management&offset=0

Miller, Keith E. ; Hill, Craig ; Miller, Antoinette R. Decision sciences journal of innovative education, 2019, Vol.17 (4), p.302-323 &context=PC&vid=44NAP_INST:44NAP_ALMA_VU1&lang=en&search_scope=MyInst_and_CI&adaptor= Primo%20Central&tab=Everything&query=any%2Ccontains%2Cfinancial%20measures%20in%20supply% 20chain%20management&offset=0

Enz, Matias G. ; Lambert, Douglas M. Journal of business logistics, 2015, Vol.36 (1), p.25-48 &context=PC&vid=44NAP_INST:44NAP_ALMA_VU1&lang=en&search_scope=MyInst_and_CI&adaptor= Primo%20Central&tab=Everything&query=any%2Ccontains%2Cfinancial%20measures%20in%20supply% 20chain%20management&offset=0

Cardoso, SóniaR ; Barbosa-Póvoa, Ana Paula ; Relvas, Susana Computers & chemical engineering,financial performance assignment 2016, Vol.85, p.105-123 &context=PC&vid=44NAP_INST:44NAP_ALMA_VU1&lang=en&search_scope=MyInst_and_CI&adaptor= Primo%20Central&tab=Everything&query=any%2Ccontains%2Cfinancial%20measures%20in%20supply%20chain %20management&offset=0

TubaEmine BEYHAN Business & management studies: an international journal, 2020, Vol.8 (2), p.1777 &context=PC&vid=44NAP_INST:44NAP_ALMA_VU1&lang=en&search_scope=MyInst_and_CI&adaptor= Primo%20Central&tab=Everything&query=any%2Ccontains%2Cfinance%20performane%20measures&offset=0

Aye Topal Business & management studies: an international journal, 2021, Vol.9 (2), p.532 &context=PC&vid=44NAP_INST:44NAP_ALMA_VU1&lang=en&search_scope=MyInst_and_CI&adaptor= Primo%20Central&tab=Everything&query=any%2Ccontains%2Cfinance%20performane%20measures&offset=0

HakanVARGÜN ; Halim AKBULUT Business & management studies: an international journal, 2020, Vol.8 (2), p.2449 &context=PC&vid=44NAP_INST:44NAP_ALMA_VU1&lang=en&search_scope=MyInst_and_CI&adaptor= Primo%20Central&tab=Everything&query=any%2Ccontains%2Cfinance%20performane%20measures&offset=10

Gülnaz ENGÜL GÜNE Business & management studies: an international journal, 2020, Vol.8 (5), p.443 &context=PC&vid=44NAP_INST:44NAP_ALMA_VU1&lang=en&search_scope=MyInst_and_CI&adaptor= Primo%20Central&tab=Everything&query=any%2Ccontains%2Cfinance%20performane%20measures&offset=10

DeryaFindik ; Murat Ocak Egeakademikbaks, 2016, Vol.16 (3), p.397 &context=PC&vid=44NAP_INST:44NAP_ALMA_VU1&lang=en&search_scope=MyInst_and_CI&adaptor= Primo%20Central&tab=Everything&query=any%2Ccontains%2Cfinance%20performane%20measures&offset=0

AakirSakarya ;ZelihaSünbülKoçak YonetimveEkonomi, 2016, financial performance assignment Vol.23 (3), p.733 &context=PC&vid=44NAP_INST:44NAP_ALMA_VU1&lang=en&search_scope=MyInst_and_CI&adaptor= Primo%20Central&tab=Everything&query=any%2Ccontains%2Cfinance%20performane%20measures&offset=0


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