Page 105 - Microsoft Word - 00 P1 IW Prelims.docx

Chapter 8

Financial performance measures in the

private sector

Outcome

By the end of this session you should be able to:

 demonstrate why the primary objective of financial performance should be
primarily concerned with the benefits to stakeholders

 discuss the appropriateness of, and apply the following as measures of
performance; gross profit and operating profit. return on capital employed
(ROCE), earnings per share, earnings before interest, tax and depreciation
adjustment (EBITDA), net present value (NPV), internal rate of return and
modified internal rate of return (IRR, MIRR)

 assess the appropriate benchmarks to use in assessing performance

 discuss why indicators of liquidity and gearing need to be considered in
conjunction with profitability

 compare and contrast short and long run financial performance and the
resulting management issues

and answer questions relating to these areas.

The underpinning detail for this chapter in your Integrated Workbook can
be found in Chapter 8 of your Study Text

95