Page 369 - SBR Integrated Workbook STUDENT S18-J19

Analysis and interpretation

Non-financial information

6.1 Non-financial performance measures

It is problematic for stakeholders to over-rely on financial performance measures:

 They are normally calculated from historical financial information and provide
limited information about future performance

 They do not provide information about key issues that impact long-term
success, such as customer satisfaction

 They can be manipulated through accounting estimates or policy choices.

Due to these limitations, analysis of non-financial performance measures is
important. These measures are related to entity performance but are not expressed
in monetary units. Examples include:

 Employee turnover

 Customer satisfaction

 Delivery times

Entities are not required to disclose non-financial performance measures, although
many choose to do so.

363