Many firms still focus on profitability as their main measure of performance
2. Many firms still focus on profitability as their main measure of performance, despite increasing evidence that non-financial measures are often more important.
(a) Explain the arguments for using the profit measure as the all-encompassing measure of the performance of a business.
(b) Explain the limitations of this profit-measurement approach and of undue dependence on the profit measure.
(c) Explain the problems of using a broad range of non-financial measures for the short- and long-term control of a business.