Business Intelligence Center

Using Business Operations Metrics as Leading Indicators to Provide Better Financial Forecasts

Free registration is required

Abstract:: In the performance management process, companies often rely on historical information (lagging indicators) to make decisions, because this information is clear-cut, readily available in information systems, and consistent with external reporting requirements.

Senior decision-makers are better served by using information on current operations that drives, or can be correlated with the future. In other words: leading indicators. These provide greater insight into future performance and allow for more timely decision-making.

Leading indicators can be identified by understanding how operational business drivers affect the performance to be measured (usually financial). Effectively incorporating this information into performance management processes, including strategic planning, budgeting, forecasting, and analysis, enhances management's ability to analyze and effectively direct investment. It also provides a strong basis to communicate to investors a clear story on growth and guidance.

DETAILS: Sponsored by:; Released: January 26, 2009; Length: 3 pages; Format: PDF (268 kb); Email this abstract; These white papers are not created by the CFO.com editorial staff. In order to view these papers, you must register with CFO.com and agree to share your contact information with related product/service companies.

Most Recent Risk Management Articles: Fiduciary Liabilities: Are You Covered?; Ghosts of Barbarians Limit New NOL Rule; Over the Counter, out of Sight

» More Risk Management stories from CFO.com