Theory - Strategic Balance Sheet

 

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SBU Strategic Balance Sheet

Financial statements are very important to measure the financial performance and condition of a business, but they do not represent a complete picture of the health of a business.

Two companies with identical financial statements are not necessarily equal. One company could be on the verge of a major upturn, the other could be out of business in a year.

A strategic balance sheet is used to measure important strategic information about a business at a moment in time. Any financial or non-financial indicator that is strategically relevant and not represented in the financial statements should be included. (Example of standard line items which should be on most strategic balance sheets).

Almost every industry will also have some of its own industry specific, strategically relevant criteria to measure the strategic health of competitors. For example, in the office superstore industry, strategic balance sheet line items might include the number of stores and the average size of each store.

 

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Copyright 2008 Alan S. Michaels               Alan S. Michaels    All Rights Reserved.
Last modified:   Tuesday February 19, 2008