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11 Cards in this Set
- Front
- Back
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What four perspectives are included in Balanced Scoreboard?
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Financial
customer Internal Business Processes Learning and Growth |
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Why are balanced scoreboard created ?
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To measure performance
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What are strategy maps
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Diagrams of strategic cause and effect relationship
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What are strategic initiative ?
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a plan to achieve goals
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What measures are used under Value based mngt?
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Return On Investment
Residual income Spread Economic Value added Free cash flow |
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How is ROI calculated
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Return/ Investment
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How is residual income calculated?
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Operating income - (Required rate or return X Invested capital)
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What is another name for Required rate or Return (RROR)
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Cost of capital
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What is the WACC? How is it calculated ?
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Cost of capital is the weighted average of the interest rate you pay for capital. Includes Debt and the rate of return your equity shareholders expect
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How is spread calculated?
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ROI- Cost of Capital
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What is the primary point of economic value added ? How is it calculated?
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Investments should exceed costs- with and emphasis on stockholder valhe- Economic value added = Operating income after tax - (Net Assets x WACC)
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