Standard measures of performance
In the previous step, we suggested that organisations decide in-house what performance criteria they observe and measure.
Nonetheless, for accounting and financial reporting purposes, common or standard measures of performance have emerged over time to help interested parties assess the health of the business.
These measures are ratio-based and a table is available in the Downloads section at the bottom of this step explaining the terms, their definition and what their results might mean.
After consulting the table, have a go at analysing Versarien’s results using the profitability, asset utilisation and liquidity ratios provided above. What are your interpretations? Discuss in the comments area.
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