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A list of possible KPIs only - often ill-defined
on 28 September 2013
This book does not give any insights into the selection of KPIs. Rather it is a list of possible KPIs.
The actual measures suggested are frequently ill-defined and some of the observations about what analysts view as important ill-judged. Some examples:
* In ROE, how should goodwill be treated?
* The debt-equity ratio does not consider what debt is in any detail; in one place it refers to debt as being total liabilities, in another short-term debt and long-term debt (these are not the same); how should cash be treated? The author notes that market values for debt and equity may be used in place of book value but does not consider why one method should be used rather than another.
* Goodwill arising for acquisitions is no longer amortised as implied here.
* Analysts do not generally view strong top-line growth which does not translate into bottom-line growth in a positive light.
I was very disappointed in this book - though its success does at least demonstrate the power of marketing.