√ 10 Definition of Financial Performance, Objectives, Measurement and Assessment and Analysis
10 Definition of Financial Performance, Objectives, Measurement and Assessment and Analysis – In this discussion we will explain financial performance. The explanation in question is the definition of financial performance according to experts, the purpose of financial performance, measurement and assessment as well as financial performance analysis which has been summarized in a light and easy discussion understood.
10 Definition of Financial Performance, Objectives, Measurement and Assessment and Analysis
For more details, please see the review below carefully.
Definition of Financial Performance According to Experts
The following is the definition of financial performance according to experts.
1. Agnes Sawir (2005:6)
Financial performance according to Agnes is to assess the financial condition and achievement of the company, requires analysis some of the benchmarks used are ratios and indexes, which link two financial data between one and the other other.
2. Sutrisno (2009:53)
Financial performance according to Sutrisno is the achievement achieved by the company in a certain period which reflects the level of soundness of the company.
3. Friday (2006:239)
According to Jumingan, financial performance is a description of the company's financial condition in a certain period, whether it concerns aspects of raising funds and channeling funds which are usually measured by indicators of capital adequacy, liquidity and profitability.
4. Fahmi (2012:2)
Financial performance according to Fahmi is a description of the achievement of company success which can be interpreted as the results that have been achieved for the various activities that have been carried out. It can be explained that financial performance is an analysis carried out to see how far a company has carried out by using the rules of financial implementation properly and Correct.
5. Mulyadi (2007:2)
According to financial performance is a periodic determination of the operational effectiveness of an organization and its employees based on targets, standards and criteria set previously.
6. Sawir (2005:1)
Financial performance according to Sawir is a condition that reflects the financial condition of a company based on the set targets, standards and criteria.
7. IAI (Indonesian Association of Accountants) (2007)
Financial performance according to IAI is a company's ability to manage and control its resources.
8. Sucipto (2003)
Financial performance according to Sucipto is the determination of certain measures that can measure the success of an organization or company in generating profits.
9. Barlian (2003)
According to Barlian, financial performance is a good prospect or future, growth and development potential for the company. Financial performance information is needed to assess potential changes in economic resources, which may be controlled in the future and to predict the productive capacity of existing resources.
10. Rudianto (2013:189)
Financial performance according to Rudianto is the result or achievement that has been achieved by company management in carrying out its function of managing company assets effectively for a certain period. Financial performance is needed by companies to find out and evaluate the level of success of the company based on the financial activities that have been carried out.
Financial Performance Objectives
Financial performance according to Munawir (2012:31) are as follows:
-
Knowing the Level of Liquidity
Liquidity provides the company's ability to meet financial obligations that must be resolved immediately when it is time to be billed. -
Knowing the Level of Solvency
Solvability tells the company's ability to meet its financial obligations if the company is liquidated, both short term and long term finance. -
Knowing the Level of Profitability
Rentability or profitability tells the company's ability to earn profits during a certain period. -
Know Stability Level
Stability tells the company's ability to carry out its business stably as measured by considering the company's ability to pay its debts as well as pay the interest expense on the debt on time time.
Measurement and Assessment of Financial Performance
Measurement and assessment of financial performance are very closely related. Performance measurement (performing measurement) is the qualification and efficiency and effectiveness of the company in operating the business during the accounting period.
According to Srimindarti (2006:34), Performance Assessment is the determination of operational, organizational and employee effectiveness based on targets, standards and criteria that have been previously determined periodically.
Performance measurement is used by companies to make improvements to their operational activities so they can compete with other companies. Financial performance analysis is a process of critically reviewing data review, calculating, measure, interpret, and provide solutions to the company's finances in a period certain.
For investors, the benefit of information on financial performance is to see whether investors will maintain their investment in the company or look for other alternatives. If the company's performance is good, the business value will be high. With a high business value, it will make investors look at the company to invest capital so that there will be an increase in stock prices.
For companies, financial performance information can be used for the following things:
- To measure the achievements achieved by the organization in a certain period that reflects the level of success in implementing its activities.
- To see the performance of an organization as a whole
- To assess the contribution of a part in achieving the company's goals as a whole.
- Used as a basis for determining the company's strategy for the future.
- Provide guidance in making decisions and organizational activities in general and organizational divisions in particular.
- As a basis for determining investment policies in order to increase the efficiency and productivity of the company.
Financial Performance Analysis
Financial analysis based on the technique can be divided into, namely:
- Comparative Analysis of Financial Statements
Is an analysis technique by comparing the financial statements of two or more periods by showing changes, either in total (absolute) or percentage (relative) - Break Even Analysis
Is an analytical technique to find out the level of sales that must be achieved so that the company does not experience losses. - Trend Analysis (positional tendencies)
Is an analysis technique to find out the tendency of financial conditions whether to show an increase or decrease. - Analysis of Sources and Uses of Cash
Is an analytical technique to find out the condition of cash and the reasons for changes in cash in a certain period. - Analysis of Changes in Gross Profit
Is an analysis technique to find out the profit position and the causes of changes in profits - Percentage PerComponent Analysis (common size)
Is an analysis technique to determine the percentage of investment in each asset to the entire or total assets or debt - Analysis of Sources and Use of Working Capital
Is an analytical technique to determine the amount of sources and use of working capital through two compared time periods - Financial Ratio Analysis
Is a financial analysis technique to determine the relationship between certain items in the balance sheet or income statement either individually or simultaneously.
Thus has been explained about 10 Definition of Financial Performance, Objectives, Measurement and Assessment and Analysis, hopefully it can add to your insight and be useful. Thank you for visiting, don't forget to read our other articles below
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