What are the three financial measurements necessary to adequately measure a firm’s performance?

Financial Measures refer to the objective measures of the company’s financial and operational performance established in the Award Agreement and utilized by the company to evaluate the company’s performance across the Performance Cycle.

The following are the three financial measures that must be used to analyze a company’s performance:

a. Net Profit: This is a financial metric used to determine a company’s revenue in dollars.

b. Return on investment (ROI): It is a financial metric that estimates the amount of profit created by an investment. Before investing, the return on investment (ROI) is calculated and compared to the revenue generated by the company.

c. Cash Flow: Cash flow is a metric that measures inflows and outflows of funds. It is critical to keep track of cash flow at all times. The amount spent on operations, investments, and borrowings may all be identified via cash flow measurement.