Quantitative measures of industrial performance are useful to shareholders, managers, planners, consumers, regulators and research economists. Shareholders may consider selling their holdings and buying assets better suited to their needs. Those who own or run a business want to know how well it is doing and where its performance can most easily be improved. Consumers, regulators and researchers have an external focus and are more interested in quality, prices and ways in which the business can be pressured into giving better value for money. Researchers may want to analyse the dynamics of the industry with a view to enlarging understanding of how it works and where it is going. They will do this to assist in policy formulation if there are policy makers to advise. Financial institutions use analysts to appraise company performance. The emphasis may be on the current situation in a single company but more often it is comparative, of prices, productivity or service quality across time, industry sector or country. The principal dimensions of comparison are: a) one company over time; b) a cross-section of companies in one industry in a single year; c) cross-sectional international comparisons within the same industry; d) cross-sectional comparisons with companies in other industries.
Performance measures, Page 1 of 2
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