Question

Give an example(s) of non-monetary information that could be measured by a company that will help a company's performance.

Answer 1

The non-monetary information that could be measured by a company that will help a company's performance are as follows:

1.Location of the company: Location is a non monetary information that helps in the company’s performance.As in many retail businesses physical location is important. But more important is the market. For example, a business organization that operates in areas that have an increasing population tend to be valued at a premium relative to businesses with operations in stagnant or reduced population areas. Similarly, businesses with operations situated in greater socioeconomic areas tend to be valued at a premium relative to businesses operating in lower socioeconomic areas. In general, the greater the potential market a business can sell in to, the more valuable that business becomes.

2. Work force : One of the non-monetary information that would help the company’s performance is the inderstanding and analysis of the workforce of the company.An important reason for acquisitions in many industries is to acquire the workforce in place at the company which is being bought. In fact, the existing management team and workforce in place is one of the major drivers of the company’s good performance and is responsible for the goodwill in an acquisition. Goodwill in a business acquisition is the amount that is paid above the fair value of the tangible assets of the business.

3. Brand of the Company:. The brand reputation in the business carries in the marketplace can have a significant effect on the value of their business. A business with a strong local brand presence often will be able to get a premium relative to a business with a less-developed brand. To increase the value of your business focus on developing a brand around your operations and a culture that is in tandem matches that brand.

4. Scope for growth: Buyers want to know that when they buy a business there is additional scope for growth. A buyer wants to be able to leverage the past performance of a business in order to fulfill their drive and expansion and growth. In order to pay full value for a business, an acquirer often must be able to recognize some sort of growth catalyst. After all, if a business is operating at peak capacity, there is less incentive to a buyer to pay a premium for the business if it has little chance of making the business better.