FINANCIAL PERSPECTIVE
The balanced scorecard concept moves stakeholders away from a single-minded obsession with traditional accounting data. However, in some cases, financial performance measures were apparently forgotten as managers, stock analysts and investors became obsessed with customer satisfaction and intangible asset growth. It is true that customer, learning and growth, and internal business process are vital for a company; but one cannot deny that financial perspective is one of the key to a company' success as well.
There are three objectives that Pokka should emphasize in order to become a financial success company as well as to create greater value to its shareholders: Maximize return, Profitable growth, and Manage operating costs
Maximize Return Objective
A properly implemented capital employment plan can be a strategic investment that pays for itself many times over. Therefore, it is important for Pokka to have a prudent investment strategy in order to maximize its return. ROCE ? Return on Capital Employed is a measure of the returns that a company is making from its capital. The advantage of ROCE is that it is very transparent, which is why it is highly regarded by investors. ROCE is easy to comprehend and comparable. Also, it can be calculated directly from the publicly available financial reporting of a company. In order to maximize returns, the strategies Pokka undertake should aim to increase its ROCE. In addition, ROCE should always be higher than the rate at which Pokka borrows; otherwise any increase in borrowing will reduce shareholders' earnings.
Profitable Growth Objective
Revenue is a crucial part of financial analysis. It is used as an indication of quality of earnings. Pokka should consider growth in its revenue i ...