Financial and Managerial Cost Analysis

Keeping Score

A company balanced scorecards to evaluate how the company is doing and plan how the company should run in the future. The balanced scorecard has four perspectives: financial, internal, customer, and learning and growth. One must weigh the advantages and disadvantages based on each perspective to determine whether or not to release the information on the balanced scorecard.

Financial Perspective

The financial perspective is, “The part of the balanced scorecard concerned with the financial health of the company” (Ainsworth, 2010 pg. 41) and includes income, capital, and value. Without a doubt the most important perspective in the scorecard, the financial perspective is likely to be the perspective stakeholders are the most interested in. A benefit of knowing this type of information would allow stakeholder’s to withdraw if the company began to look “unhealthy.”

Internal Perspective

The internal perspective is, “The part of the balanced scorecard concerned with the internal operations of the company” (Ainsworth, 2010 pg. 42). Also known as the Business Process perspective, the internal perspective measures quality, turnout, and cost. The Internal perspective also covers the logistics: order fulfillment, production, and procurement. Stakeholders would be would benefit by knowing how the company managed the logistics, but the information may not be relevant as long as the company was thriving financially.

Customer Perspective

The customer perspective is, “The part of the balanced scorecard concerned with the customer base of the company” (Ainsworth, 2010 pg. 45) including satisfaction, retention, and segmentation. Like the Internal Perspective, the information concerning the Customer Perspective would be beneficial to stakeholders, but stakeholders are likely to surmise that the information gathered from the Financial Perspective would indicate high levels of customer satisfaction with the products and services provided making the need to...