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Strategic Decision-Making Supported By Traditional Financial Indicators

Author

Listed:
  • Zoltan Musinszki

    (Institute of Accounting and Finance, Faculty of Economics, University of Miskolc, Miskolc, Hungary)

  • Gabor Bela Suveges

    (Institute of Accounting and Finance, Faculty of Economics, University of Miskolc, Miskolc, Hungary)

Abstract

Traditional financial indicators calculated from financial statements cannot provide adequate information for the management, do not support strategic decisions. The reason for this is the methodology used in producing financial statements and the operational logic of financial accounting. Financial accounting thinks in terms of business year that is 12 months. It deals with events of the past, more accurately, with so called economic activities. Financial accounting evaluates such economic activities in terms of monetary processes, which means that the traditional financial indicators have their limits in application. Could it mean that traditional financial indicators cannot be used in the long-term strategic decision making? In our study we point out two connections between financial indicators and strategic decision making. Firstly, we focus on financial indicators used in supported strategic decision making, in strategic indicator systems. Secondly, we focus on cases in which financial indicators complement the methods of strategic decision making, add something to the tools available in strategic management.

Suggested Citation

  • Zoltan Musinszki & Gabor Bela Suveges, 2019. "Strategic Decision-Making Supported By Traditional Financial Indicators," Oradea Journal of Business and Economics, University of Oradea, Faculty of Economics, vol. 4(1), pages 29-37, March.
    • Handle: RePEc:ora:jrojbe:v:4:y:2019:i:1:p:29-37
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    References listed on IDEAS

    as
    1. Zoltán Musinszki & Anita Demény, 2016. "Social Accounting - In the Wake of the Sustainability," Theory Methodology Practice (TMP), Faculty of Economics, University of Miskolc, vol. 12(02), pages 26-40.
    2. Zoltán Musinszki & Anita Demény, 2016. "Social Accounting - In the Wake of the Sustainability," Theory Methodology Practice (TMP), Faculty of Economics, University of Miskolc, vol. 12(si), pages 26-40.
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    Citations

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    Cited by:

    1. Rosalie van Baest, 2022. "Conscious Intra-Personal Development: The Experience Counts," European Journal of Social Sciences Articles, Revistia Research and Publishing, vol. 5, January -.
    2. Nabil Sifouh & Oubal Khadija & Sara Bayoud, 2022. "Contribution of the Cointegration Theory to the Study of the Volatility of Financial Markets: Case of the Casablanca Stock Exchange," European Journal of Marketing and Economics Articles, Revistia Research and Publishing, vol. 5, July - De.
    3. Péter BAJNAI & Péter POPOVICS, 2020. "Practical Application Of The Balanced Scorecard Model, A Balanced Strategic Indicator System," SEA - Practical Application of Science, Romanian Foundation for Business Intelligence, Editorial Department, issue 24, pages 271-277, December.

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    More about this item

    Keywords

    : financial statement; financial indicators; strategy; strategic decision making; Balanced Scorecard.;
    All these keywords.

    JEL classification:

    • C80 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - General
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General

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