What is a limitation of financial performance measurements?
A)They are not useful for benchmarking.
B)They do not motivate managers.
C)They tend to focus on long-term performance.
D)They tend to be lag indicators.

Question

Quizplus · Accepted Answer

Financial performance measurements tend to be lag indicators, meaning they only provide information on past performance and may not accurately predict future performance. This limitation can be overcome by using complementary non-financial performance measurements that provide a more forward-looking perspective.

What Is a Limitation of Financial Performance Measurements