“What Is” Performance Measurement?

PerfmsmtPerformance measurement is the process by which investors and others collect and examine information about financial services firms and their capabilities to make a profit.

In general, the performance measurement department of a financial services firm such as a hedge fund or an asset manager is responsible for aggregating investment data and producing reports about the company’s financial state and prospects. Performance measurement helps investors evaluate how closely a company’s investment activities are reaching targeted goals.

In addition, performance measurement is often used to assess a company’s financial health after a specified period of time. It can also be used to compare firms across an industry, or even to compare industries from one another. Therefore, assessing a company’s performance is an extremely useful tool when planning for future financial transactions and developments.

The process of performance evaluation generally requires various mathematical and statistical measures to fully assess a firm’s performance. In general, the more measures applied, the more accurate the review of performance.

 

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