The limitations of financial performance measures ________.
A) lead management to use a time horizon of more than five years
B) make it difficult for companies to create goal congruence
C) lead management to use the gross book value of assets
D) can be overcome by taking a broader view of performance

Question

Quizplus · Accepted Answer

Financial performance measures have limitations as they only focus on the financial aspects of a business. By taking a broader view of performance, including non-financial aspects such as customer satisfaction and employee retention, companies can overcome these limitations and gain a more comprehensive understanding of their overall performance. Therefore, option D is the best choice. Options A, B, and C are incorrect as they do not correctly address the limitations of financial performance measures.

The Limitations of Financial Performance Measures ________