The balanced scorecard provides top managers with a __________ view of the business.

81.	Ratios that reflect whether or not a firm is efficiently using its resources are known as    A.  leverage ratios B.  turnover ratios C.  liquidity ratios D.  profitability ratios Asset utilization (or turnover) ratios are one measure of whether a firm is efficiently using its resources.

AACSB: Analytic Blooms: Remember Learning Objective: 03-06 The usefulness of financial ratio analysis; its inherent limitations; and how to make meaningful comparisons of performance across firms. Level of Difficulty: 1 Easy Topic: Evaluating Firm Performance: Two Approaches

82.

The balanced scorecard provides top managers with a __________ view of the business.    A.  detailed and complex B.  simple and routine C.  fast but comprehensive D.  long-term financial A balanced scorecard provides top managers with a fast but comprehensive view of the business. In a nutshell, it includes financial measures that reflect the results of actions already taken, but it complements these indicators with measures of customer satisfaction, internal processes, and the innovation and improvement activities of the organization.

AACSB: Analytic Blooms: Remember Learning Objective: 03-07 The value of the "balanced scorecard" in recognizing how the interests of a variety of stakeholders can be interrelated. Level of Difficulty: 1 Easy Topic: Evaluating Firm Performance: Two Approaches

83.

The balanced scorecard, developed by Kaplan and Norton, helps to integrate ______.    A.  financial analysis and the reputation of a firm B.  intangible resources and operational measures C.  financial analysis and stakeholder perspectives D.  short-term perspectives and strategic positioning The balanced scorecard enables managers to consider their business from four key perspectives: customer, internal, innovation and learning, and financial.

AACSB: Analytic Blooms: Remember Learning Objective: 03-07 The value of the "balanced scorecard" in recognizing how the interests of a variety of stakeholders can be interrelated. Level of Difficulty: 1 Easy Topic: Evaluating Firm Performance: Two Approaches

84.

The balanced scorecard enables managers to consider their business from all of the following perspectives EXCEPT:    A.  customer perspective B.  internal perspective C.  innovation and learning perspective D.  ethical perspective The balanced scorecard enables managers to consider their business from four key perspectives: customer, internal, innovation and learning, and financial.

AACSB: Analytic Blooms: Remember Learning Objective: 03-07 The value of the "balanced scorecard" in recognizing how the interests of a variety of stakeholders can be interrelated. Level of Difficulty: 1 Easy Topic: Evaluating Firm Performance: Two Approaches

85.

An important implication of the balanced scorecard approach is that _______________.    A.  managers need to recognize that satisfaction of stockholder demands is their primary job B.  the key emphasis on customer satisfaction and financial goals are only a means to that end C.  managers should not look at their job as primarily balancing stakeholder demands D.  gains in financial performance and customer satisfaction must come at a cost of employee satisfaction A key implication is that managers do not need to look at their job as balancing stakeholder demands. The balanced scorecard provides a win-win approach, increasing satisfaction among a wide variety of organizational stakeholders, including employees (at all levels), customers, and stockholders.

AACSB: Analytic Blooms: Understand Learning Objective: 03-07 The value of the "balanced scorecard" in recognizing how the interests of a variety of stakeholders can be interrelated. Level of Difficulty: 2 Medium Topic: Evaluating Firm Performance: Two Approaches

In considering the business from the customer perspective using the balanced scorecard, company performance is essential.

41.

In considering the business from the customer perspective using the balanced scorecard, company performance is essential.    TRUE How a company is performing from the perspective of its customers is a top priority for management. The balanced scorecard requires that managers translate their general mission statements on customer service into specific measures that reflect the factors that really matter to customers.

AACSB: Analytic Blooms: Understand Learning Objective: 03-07 The value of the "balanced scorecard" in recognizing how the interests of a variety of stakeholders can be interrelated. Level of Difficulty: 2 Medium Topic: Evaluating Firm Performance: Two Approaches

42.

In considering the business from the internal business perspective using the balanced scorecard, customer-based measures must be translated into indicators of what the firm must do internally to meet customer expectations.    TRUE Customer-based measures are important. However, they must be translated into indicators of what the firm must do internally to meet customer expectations. The internal measures should reflect business processes that have the greatest impact on customer satisfaction.

AACSB: Analytic Blooms: Understand Learning Objective: 03-07 The value of the "balanced scorecard" in recognizing how the interests of a variety of stakeholders can be interrelated. Level of Difficulty: 2 Medium Topic: Evaluating Firm Performance: Two Approaches

43.

In considering the business from the internal business perspective using the balanced scorecard, periodic financial statements are used to indicate the consequences of improved quality, response time, productivity, and innovative products. These consequences include improved sales.    TRUE Measures of financial performance indicate whether the company strategy, implementation, and execution are indeed contributing to bottom-line improvement. Typical financial goals include profitability, growth, and shareholder value. Periodic financial statements remind managers that improved quality, response time, productivity, and innovative products benefit the firm only when they result in improved sales, increased market share, reduced operating expenses, or higher asset turnover.

AACSB: Analytic Blooms: Understand Learning Objective: 03-07 The value of the "balanced scorecard" in recognizing how the interests of a variety of stakeholders can be interrelated. Level of Difficulty: 2 Medium Topic: Evaluating Firm Performance: Two Approaches