Page 139 - Finance for Non-Financial Managers

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Finance for Non-Financial Managers
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because in most cases they don’t appear on the basic
financial statements.
❏ CPFs are most effectively used when a company identifies
its most sensitive areas in sales, operations, and finance
and establishes goals or standards for each area to be
improved. Common financial CPFs include measures of
financial strength, profitability, liquidity, and leverage. Key
operational CPFs include relevant productivity indicators.
Key sales CPFs should include sales backlog and sales
force performance.
❏ Trends tell us what a single piece of data can never tell
us—what the future might look like. The trick is to capture
the right CPFs and to present them in six to 12 periodic
readings, so that it becomes easier to see where they are
going and whether action should be taken to encourage or
counter that trend.