IDEAS home Printed from https://ideas.repec.org/a/ovi/oviste/vxviy2016i2p521-526.html
   My bibliography  Save this article

Financial Indicators of Performance Measurement: Reality, Relevance and Distortion

Author

Listed:
  • Flavius-Andrei Guinea

    (Bucharest University of Economic Studies)

Abstract

The main criticism brought to managers and to managerial accounting systems was the lack of emphasis on the return of the use of invested capital and the excessive focus on the efficiency of production processes. This fact forced the transition to a new view on the way of establishing the strategic objectives measured by financial indicators. The aim of this paper is to demonstrate, through case studies, the relevance and possibilities of manipulation of a series of indicators used for assessing performance: return on investment, residual profit, economic added value, commercial profitability. The relativity and the criticized appraisal of performance only through the means of profit were thought to be solved by implementing other indicators that would link several ingredients of profitability. The conclusions highlight that the remedy promoted by the new sets of financial indicators imposes a considerable cost, represented by the temptation of information distortion.

Suggested Citation

  • Flavius-Andrei Guinea, 2016. "Financial Indicators of Performance Measurement: Reality, Relevance and Distortion," Ovidius University Annals, Economic Sciences Series, Ovidius University of Constantza, Faculty of Economic Sciences, vol. 0(2), pages 521-526, February.
    • Handle: RePEc:ovi:oviste:v:xvi:y:2016:i:2:p:521-526
    as

    Download full text from publisher

    File URL: http://stec.univ-ovidius.ro/html/anale/ENG/2016/2016-II-full/s5/21.pdf
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    measures of financial performance; return on investment; residual income; economic value added;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ovi:oviste:v:xvi:y:2016:i:2:p:521-526. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Gheorghiu Gabriela (email available below). General contact details of provider: https://edirc.repec.org/data/feoviro.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.