Output input measures VG

measuring performance and efficiency with output/input ratios.

1. The purpose of dynamic ratio analysis is to show true performance.  It eliminates the impact of output due to increase of input.
2. Compare the performance of a company with another within the same industry.  This is a comparison between the two companies.
• Component ratios would explain the root cause of the results.
• Where best practices identified for application.
• Where comparative advantage identified. (strengths)
3. For example, the ROE is the ultimate goal of a company where
• the component ratios are 
• profit margin x asset turnover x equity multiplier.
• One or all the above ratios are root cause factors for the results.
4. Use output/input measures to evaluate 
• the value chain./ processes
• staff performance.
5. To expedite calculation,  the process could also be programmed in excel .
6. The impact of change could also be illustrated with a graph.

                      copyright Arriffin Mansor 012-2786282