Measuring Company Performance Using the Integrated Indicator

Abstract

When assessing the company’s financial position and perfor­mance, we most often use financial indicators such as net income, rate of return on assets, rate of return on equity, cash flow and the like. However, dynamic business conditions have brought the need to use an integrated (composite) indicator, especially for a comparative long-term analysis of several companies. The composite indicator consists of individual indicators (variables) and allows for a comprehensive assessment of performance in order to get a full picture of the company’s business that all stakeholders can understand. The application of this indicator is possible at the national and international levels. Therefore, this paper aims to point out how perfor­mance measurement using a composite indicator facilitates the assessment of business operations, but also investors’ decision-making.