The Measurements of Firm Performance’s Dimensions

Abstract

The main purpose of this study was to review the measurements that are related to the corporate governance. A close look at the literature of corporate governance and firm performance reveals that different measures have been used by the researchers to measure the performance. They classified those measurements into accounting-based and market-based indicators. Performance measurement has great significance in effective management of an organization and in the enhancement of the processes since only measurable things is manageable. Hence, the enhancement of the organizational performance requires some measurements to determine the impact of the level of organizational effectiveness upon business performance. This study can act as a reference to the researchers who are concerned with the firm performance measurements.

The Influence of Information Technology (IT) Knowledge on Organization Performance with Adaptability to Change as a Moderator among Small Medium Enterprises (SMEs) in Malaysia: A Conceptual Paper

“…Accordingly, it is to the firm's best interest to evaluate its organization performance. Various ways have also been brought forward to measure financial performance and among them are: measurement of performance as the level of Return on Assets (ROA), Return on Equity (ROE), Tobin-Q, Profit Per Employee (PPE), Return on Fixed Assets (ROFA) etc (Al-Matani et al, 2014).…”

The Association of Board Composition, Intellectual Capital and Firm Performance in a High Ownership Concentration Context: Evidence from Italy

“…Coherently with Joh (2003), in our article we use accounting measures of FP as they are not affected by market inefficiency, but are more directly concerned with firm's survival and profitability than market measures and they are available for both listed and unlisted firms. Moreover, among accounting-based measures, ROA is the preferred ratio when the relationship between CG and FP is investigated (Hutchinson & Gul, 2004;Mashayekhi & Bazazb, 2008;Nuryanah & Islam, 2011;Al-Matari et al, 2014) and it is considered one of the most relevant accounting measures (Aliabadi et al, 2013). In fact, ROA is a better metric of financial performance than income statement profitability measures like return on sales (ROS) or ROE, as it shows how productive the firm's total assets are in producing profits (Hagel III et al, 2010;Masa'deh et al, 2015).…”

The Effect of Investment in Technology on Lagged Stock Returns of Banks Listed at the Nairobi Securities Exchange

“…That study used return on assets (ROA) as a measure of financial performance which is accounting based criticised because for being backward looking. The performance measurement for this study was stock returns which are forward looking and market based (Al-Matari & Abdullah, 2014). In Kenya banks continue to reinvent the services they offer in order to remain relevant to their clients' dynamic needs by using new banking technologies (Kenya Bankeers Association, 2013).…”

“…The measurement of performance is critical for effective management of any firm and to see the impact of resources on performance. Therefore this study used stock returns as a measure of banks performance it is market based and forecasts future performance (Al-Matari & Abdullah, 2014).The purpose of a market for securities is to facilitate trading of stocks and other financial instruments .The recent vast development in technology have been remarkably transformed the security market (Omuchesi & Bosire, 2014).The performance of a stock market is of interest to various parties including investors, capital markets among others (Valentin, 2012;Menge et al, 2014). The NSE which is the context of this study began informally in the 1920sthenwas founded as a private association in 1954.…”