Question

Briefly explain why firms might use non-financial performance measures. Can you name a company that you had personal experience with a non-financial performance evaluation?

Answer 1

While every for profit business is deeply focused on financial measures, there are non financial measures which a firm considers as all decisions cannot be financial. The socio-economic impact of business decisions has to be taken into consideration. Further, the environmental impact should also be considered.

In my personal experience, an airline which was incurring huge losses still continued operations as it was providing an important service i.e. transport to the citizens of the country.