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The Modern Performance Indicators – Important Instruments in the Financial Management of the Companies

Author

Listed:
  • Ioan POPA-LALA

    (West University of Timisoara, Faculty of Economics and Business Administration, Romania)

  • Cecilia-Nicoleta ANIS

    (West University of Timisoara, Faculty of Economics and Business Administration, Romania)

Abstract

The information about the performances of an institution is needed in order to assess potential changes of the economic resources which the entity will be able to control in the future, to anticipate the ability to generate cash flows with the present resources, to formulate judgments about how efficiently it can engage and use new resources. To assess the economic performance of an enterprise four indicators are commonly used: return on investment, residual income, economic value added and profitability of sales. The performance analysis is a constituent of any managerial control system. Strategic planning and control decisions require information on how different subunits of the enterprise worked. To be efficient, performance indicators and remuneration have to motivate the managers and the employees from all enterprise levels to make sustained efforts to implement strategies and to attain business objectives. Taking into account the practices of companies one can observe that companies use varied financial indicators for performance evaluation.

Suggested Citation

  • Ioan POPA-LALA & Cecilia-Nicoleta ANIS, 2010. "The Modern Performance Indicators – Important Instruments in the Financial Management of the Companies," Timisoara Journal of Economics, West University of Timisoara, Romania, Faculty of Economics and Business Administration, vol. 3(1(9)), pages 49-56.
    • Handle: RePEc:wun:journl:tje:v03:y2010:i1(9):a05
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    References listed on IDEAS

    as
    1. Floarea Iosub Dobrica, 2008. "Shareholder value enhancing strategies - empirical evidence on multinational corporations behaviour," Analele Stiintifice ale Universitatii "Alexandru Ioan Cuza" din Iasi - Stiinte Economice (1954-2015), Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, vol. 55, pages 65-75, November.
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    2. Ion Popa-Lala & Cecilia – Nicoleta Anis, 2010. "Profitability and Risk – Components of the Financial Management," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 2(2), pages 39-46, June.

    More about this item

    Keywords

    performance; profitability; value added; residual income; financial management;
    All these keywords.

    JEL classification:

    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

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