To understand poor financial performance, one can identify the "drivers of performance". These drivers are:
A)Elements that emerge from the disaggregation of Return on Capital (for example using the DuPont formula)
B)The firm's cost of capital that encompasses the cost of equity and the cost of debt
C)Organizational capabilities at the top level management team
D)Ability of the firm to satisfy its customers and to grow on a permanent basis its stream of income

Question

Quizplus · Accepted Answer

The drivers of performance are the elements that emerge from the disaggregation of Return on Capital, for example, using the DuPont formula. This helps in identifying specific areas where performance improvements can be made. The cost of capital, organizational capabilities, and ability to satisfy customers are important factors, but they are not drivers of performance in themselves.

To Understand Poor Financial Performance, One Can Identify the "Drivers