Tools For Monitoring Performance Financial Controls Traditional Financial Control Measures taken from organization's main financial statements a number of financial ratios used in organizations -liquidiny ratios-organization's ability to meet its current debt obligations -leveruge rutios use of debt to finance assets and ability to meet interest payments activiny ratios-efficiency of use of firm's assets -profabilliy ratios-effectiveness with which assets used to generate profits ©Prentice Hall,2002 20-10 Tools For Monitoring Performance Financial Controls – Traditional Financial Control Measures • taken from organization’s main financial statements • a number of financial ratios used in organizations – liquidity ratios - organization’s ability to meet its current debt obligations – leverage ratios - use of debt to finance assets and ability to meet interest payments – activity ratios - efficiency of use of firm’s assets – profitability ratios - effectiveness with which assets used to generate profits © Prentice Hall, 2002 20-10