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Ratios are used for many purposes, performance measurement is one such application. However, not all performance measures are expressed as a ratio. Do some research on the Internet to learn about...

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Ratios are used for many purposes, performance measurement is one such application. However, not all performance measures are expressed as a ratio. Do some research on the Internet to learn about operating leverage, ROI, EVA, and pick another performance measure of your choice. You will note that there are variations in the computations of a particular measurement. Consistency in application is the key.

Use information from the latest financial statement of your SLP company (Apple Inc) to compute the measuements you researched.

Reflect on the advantages and disadvantages of these performance measures. Choose your preferred measure and explain your rationale.

Modular SLP Assignment Expectations

Always include the name of the organization(s), time period covered and source of information. It is important to answer the questions as posed.The document should be from 2 to 4 pages and written in a clear and concise manner. Don't forget to include tables as required. Support your discussion or tables with references in APA format. You are encouraged to use Excel or other compatiblespreadsheet when computations are involved. You can turn in the spreadsheet instead of the Word document. The content should be equivalent to the page length suggested for a word processing document.

Answered Same Day Dec 24, 2021

Solution

David answered on Dec 24 2021
126 Votes
Ratios
Ratios and there usage
Performance measurement refers to the process of using measures or comparable
variables which helps understand how good or how bad the performance is. Ratios are
popularly used for performance measurement. Apart from that operating leverage, ROI and
EVA is also popularly used for the same. ROI is a measure of performance which is
extremely useful to understand and analyse the performance of the firm (Fa
is, Paul W.;
Neil T. Bendle; Phillip E. Pfeifer; David J. Reibstein, 2010).
ROI refers to return on investments. ROI is used to measure the number of times
eturns have been earned on the investments which includes capital investments. The ROI
of Apple is 5 and IBM is 3 in year 2012 (Source: NYSE). This greatly impacts the returns to
shareholders. It also helps assess the performance of each of the firms. Moreover it also
helps compare the performance of the two firms and thus creates an effective performance
measurement tool. The EVA of Apple is 3 and the operating leverage is 2 (Source: NYSE).
There are several advantages and disadvantages of ROI in comparison to other
performance measurement tools.
Reflect on the advantages and disadvantages of these...
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