Finance Balanced Scorecard Metrics Pack
Financial scorecards provide CEOs and financial managers with scorecard tool which will help to measure and improve the process of financial assets management. Scorecards will help to estimate the process of passive and active portfolio management analyze company financial performance taking in order their activities, divided into sections, dealing with their liquidity, asset turnover, financial leverage, and profitability.
The pack includes 12 Finance metrics:
- Financial Statement Analysis. The BSC on Financial Statement Analysis is based on the metrics allowing analyzing the performance of companies through the examination of their financial indicators, in particular, their Liquidity, Asset Turnover, Financial Leverage, and Profitability Ratios
- Active Portfolio Management. This Balanced Scorecard consists of the following sections: quantitative, asset allocation, and risk-adjusted return metrics. Among other metrics, used in this BSC, the most effective ones, such as Sharpe-s and Treynor measures, Jensen-s Alpha and Information ratio have been chosen to asses the risk-adjusted return of funds under active portfolio management.
- Passive Investments. This Balanced Score Card provides a systematic and objective way to measure the performance for the portfolio of assets under the passive portfolio management approach. It consists of sections that deal with the allocation strategy that determines both the return of asset classes within the portfolio and the performance of the entire portfolio.
- Financial Crisis. Financial crisis is one of the possible extreme conditions that a business establishment can experience. During such a period, it is imperative to identify and take corrective measures in areas that can have a negative impact on the operations of the business. KPIs can be used in quantifying key factors for managing the performance during a financial crisis. For effective performance management KPIs can be broadly grouped under four perspectives- financial, business development, operational and workforce management.
- Budgeting and Forecasting. Performance measurement and management are necessary in every field of business to maximize the learning effects and minimize errors and Budgeting and Financial Forecasting is hardly an exception. The areas in which indicators can be framed to attain the desired results are- Management Perspective, Structural Perspective, Conformance perspective, and Continuous Improvement and Learning Perspective.
- Financial Securities. A comprehensive performance evaluation criteria to keep an account of the directions in which statistics of ‘return, risk and liquidity’ of a given security proceed, can be obtained via BSC. The key is to frame the factors in the form of indicators under comfortable number of categories. Some of the groups that can help are- ‘Risk perspective’, ‘Liquidity Perspective’, ‘Growth Aspects’ and ‘History and Past Performance Perspective’.
- Financial Insurance Company. Subject to the different operational area of businesses, the performance measurement/management aspects also vary accordingly. A financial insurance company transfers the risks of its customers by insuring activities and areas that are highly uncertain, allowing them to operate with more freedom and concentration. KPIs in Financial Insurance Company can be arranged in a balanced scorecard under four broad perspectives- Financial, Underwriting Risk, Investment and Credit Risk and, Client Handling and Performance.
- Leasing Company. The high degree of difficulty in the operations of Leasing Company makes implementation of a ‘tracking mechanism’ mandatory. This is primarily needed for preventing the deviation of the organization from the path it is intended to move on. There can be several perspectives along which the company can be evaluated through the help of KPIs. One can start with Financial, Customer, Internal Operations and Lease Terms and Payments.
- E-commerce Scorecard. The implementation of Ecommerce by an organization (usually done to increase the volume and reach of business) asks for using an appropriate -follow-up- system to ensure that the aims are achieved. Among several techniques that can be used measure its efficacy; a Balanced Scorecard(BSC) invariably comes across the most potent tool. The perspectives, which can be used to evaluate the success of ecommerce on a BSC are- Financial Perspective, Internal Operations, Clickstream Perspective and Capability perspective.
- Financial Outsourcing. Outsourcing the Financial operations of an organization is a highly responsible decision. One should carry out a detailed analysis to spot the right partner and decide what part of its financial operations it plans to outsource. That apart the criteria to be pre-set for measuring the success of the financial outsourcing initiative should have all the ‘seemingly important factors’ reflected in it. The aspects that can be of help in this direction relate to- Screening, Outsourcing Partner Capability, Outsourcing Process Assessment and Benefits Accruing Perspective.
- Financial Benchmarking. One can focus on improving the financial performance of the company by putting the relevant indicators on a Balanced Scorecard (BSC) to compare the steps with that of a competitor or own-s previous performance. The perspectives that can help in this regard are- ‘Stakeholders’ Returns Perspective’, ‘Improvement Perspective’, ‘Expenditure Perspective’ and ‘Financial health perspective’. Treading the balanced path increases the success of the company, manifold.
- Earned Value. Most organizations place extensive stress on successfully managing projects and the profitability associated with the project is always a key consideration. Earned Value Management is widely used to determine how a project is progressing and measure the project index at any point of time KPIs can act as facilitators in the EVM process and some of the parameters in which they can be grouped are ‘Financial Perspective’, ‘Project Costing’ , ‘Performance Index’ , ‘Customer Satisfaction
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