Chapter 13. Financial Perspective

The financial perspective includes arguably the most important measures of a business. We judge the actions and metrics of all other perspectives based on the effect that they have on the financial situation. Financial reports, such as the balance sheet, the income statement, and the cash flow statement, are universal measures of a company. These reports are used by outside investors, creditors, and the government, and there is a standard way that they are presented.

Accountants use standardized bookkeeping practices to record the financial data. Although we don't have to learn everything that they know about bookkeeping, we do have to understand the basic idea of what it means. For example, we have to understand how to interpret debits and credits in the data that originates from the accounting software. We also have to understand whether a measure is calculated over a certain period or based on an accumulated total. We review a financial data model that...