Difference Between The Following Performance Measures

* A ratio for valuing a stock relative to its own past performance, other companies and the market itself.

This ratio takes into consideration the current assets and current liabilities from the balance sheet

There are quite a few reasons for choosing the three ratios mentioned above. One big reason for our selection is due to the popularity of these ratios. By having a lot of popularity, we can be sure that our audience will be familiar with what we are talking about, without having to waste too much time explaining. Another reason for choosing these three ratios is that they are relatively easy to calculate. A final reason for picking our three ratios is because they allow us to understand why a company may be outperforming or underperforming in term of profitability, without having to be a professional.

Ratios are highly important profit tools in financial analysis that help financial analysts implement plans that improve profitability, liquidity, financial structure, reordering, leverage, and interest coverage. Although ratios report mostly on past performances, they can be predictive too, and provide lead indications of potential problem areas. Financial ratios are important because they help investors make decisions to buy hold or sell securities.

Whereas the investors primarily use the Return on investment ratio to monitor how well the company is utilizing their investment.

The ratio measures the company’s ability to meet its debt obligations. It allows investors to see to what extent company’s earning can decline without the firm being unable to pay its annual interest costs. Nevertheless, a high ratio can indicate that a company has an undesirable lack of debt or it is paying too much debt with earning that could be invested in other projects.

performance of individual athletes or teams, it can also be used by coaches to assist them in

It is the ratio obtained when the sales and assets of the company have been compared and contrasted. The ratios exemplify the position of the company in the market share. In that, it enables the organization to utilize available

Hence, it facilitates analysts to compare the risk-adjusted performance of different portfolios based on the level of the ratio which higher Sharpe ratio is considered to be better than the lower ones.

This ratio tells how much of a company 's funds are tied up in inventory. It is preferable to run your business with as little inventory as possible on hand, while not affecting potential sales opportunities

The calculation of ratios is the calculation technique for analyzing a company’s financial performance that divides or standardize one accounting measure by another economically relevant measure. Financial ratios can be used as a tool to demonstrate financial statement users for making valid comparisons of firm operating performance, over time for the same firm and between comparable companies. External investors are mostly interested in gaining insights about a firm’s profitability, asset management, liquidity, and solvency.

The three performance measures speed, accuracy, and volume are important signs of a projects performance. They show just how successful the project is, thus, making them similar, irrespective of time and budget. They allow benchmarks to be set, which stands for the performance level that project managers depend on for the project team to produce. These three measurements are measurable, specific, and assignable, they are exact indicators that can be estimated and anyone can be

In project management, performance measurement is a tool or mechanism for effective management and process improvement. Notably, the selection of an effective and appropriate performance measurement is crucial and based on various factors such as the decisions they will support and the people to use it. The suitability and efficiency of the performance measures is also affected by how they are effectively integrated into the benchmarking system. This is because performance measures need to be effectively integrated both vertically and horizontally. The vertical and horizontal integration enables the performance measure to achieve balance and offer a total assessment of the project management. The performance measures should identify the specific population to be assessed, the source of data, and the period of time for the measurement. There are various performance measures such as Gantt Chart, Balanced Scorecards, and Competitive Benchmarking.

Ratio analysis is generally used by the company to provide some information on how the company has performed during that year, so that the parties involved including shareholders, lenders, investors, government and other users could make some analysis before making any further decision towards that particular company. As mentioned by Gibson (1982a cited in British Accounting Review, 2002 pg. 290) where he believes that the use of ratio analysis is such an effective tool to evaluate the company’s finance, and to predict its future financial state. Ratios are simply divided in several categories; these are the profitability, liquidity, efficiency and gearing.

Ratios are measurements.  The reason ratios are used, as opposed to absolute values, is a mathematical one, and is basically in order to facilitate comparison by adjusting for size (Barnes, 1987).   Similarly, knowledge of the behavior of turnover ratios might be useful in assessing the effects of changes in any of the underlying economic characteristics (Gupta and Hgefner, 1972).