1.1IntroductionManagementperformance is a process of communicating, planning and monitoring organizationresource between managers and employees to achieve desired objectives. It istherefore important to review the performance as it reveals the capability ofproducing desired objectives. 1.2Financial Performance MeasuresFinancialperformance involves how well the firm can communicates plans and monitorsorganizational resources to achieve their monetary goals /targets.

Differentstakeholders may have their own interest in evaluating the financial strengthsof the company but most known used measures to analyze include: profitability,liquidity, leverage and efficiency.  In thisstudy the focus is on Profitability measures. ·        Net Profit MarginThismeasures the ability of the company to generate more income by excluding allexpenses arises during the production and distribution of the products.

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Itmeasures the sales force employed by the company as well as controlling all theconst associated with it with higher ratios indicating a healthier business. ·        Return on Equity Thisratio measures the company total incomes in relation to equity funds raised. Italso measures how well the firm has been able to utilize the funds from equityholders to generate more income. ·        Return on AssetsThismeasures the company ability to effectively and effectively to utilize theasset to generate more income. With low ratio indicating that the company isless effective in asset utilization, thus poor financial performance    ·        Operating profitThismeasures the ability of the company to generate income as well as ability ofthe company to control operating cost. As a higher ratio indicates that thecompany has increased sales and decrease operation cost.

Since profit is associated with costthen this profit measures is also contributed by cost measures1.3Non-financial Performance MeasuresThenon- financial measures has gained more attention as in today’s businessoperations. Previous studies have revealed that the traditional approach offinancial measures only have failed to respond to the newly development intechnology and the increased market competition.  Managers now days have to focus on productquality customer satisfactions, innovation, distribution channel, employeesatisfaction in order to attain its objectives. Van der stede et al (2006) inhis study argued the importance of including both financial and non financedmeasures as non- financial measures in today business are of better importantin predicting the future performance of financial performance.

This was alsoargued by Banker et al (2000).1.4Evaluation of Results Based ObjectivesResultbased management is an approach/measures designed to ensure that employee focuson their work to ensure that organization objective.  Because it performance against objective, theorganization therefore need a follow up of accomplishments against objectivesin order to determine the appropriate corrective measure in case of deviation.The model is very effective as it provide feedback on the work in progress allemployees involved as accomplishment of task base on clear designed goals andobjectives.

Key focus for RBM·        It provide a form of continuousimprovements·        Enable measurement of results·        Involve full engagement of all employees·        Keep awareness through a clearinformation communication system·        Result to strong leadership andmanagement support.Theprocess may be categorized into;-·        Performance planning and commitment ·        Performance monitoring and coaching·        Performance review and evaluation·        Performance rewarding and planning1.5Evaluation of Balance Score CardTraditionally, organization has beenanalyzing their performance under financial measures, a situation argued byKaplan and Norton as failing of the organization to consider other stakeholderson their business than shareholder.

According to them the traditional approachdoes not provide the full perspective of how effectively an organization can bemanaged. Therefore they complement other prospects such as internal process,customers, learning and innovation. By balancing these measures in anorganization, it helps managers to have a complete picture on how to improvetheir business. Therefore they established the balanced score card approach.

Kaplan and Norton argued that this approach give the manager fast but verycomprehensive view of the whole organization.Information gathered from thisperspective includes;Customers Perspectives Here manager put measures that ensuretheir customers are satisfied with the company products. Key performanceindicators include; the market share, number of lost customers, customerloyalty, advertising campaigns etc. ·        Financial PerspectivesThis are measures taken to ensure thatthe company generate profits and at any point in time the company isfinancially health. Therefore the company being health is able to satisfy theirshareholders. Key performance indication includes, operating profit, return onassets, return on capital employed and return on equity.

·        Innovation and learning perspectiveFor an organization maintain its statusand to continue being one of the market leader, this perspective is helpful asit is what create value to the organization. With changing technology and thereforeconsumer preferences/taste, then the organization must be able to adapt thesituation. And that can be achieved through investment in training of their keyemployees to add them skills and knowledge. This also require the company toinvest in research and development too ·        Internal business process There are measures to ensure thatbusinesses are conducted in a way that meet the customer expectations byfocusing on critical internal operations. Key performance indicator includes; Averagedecision making time, ratio of timely complete orders, efficiency ofinformation system etc. 1.6Evaluation of Value for MoneyValuefor money (VFM) is a strategy used for firm performance which involves the artof gaining the best value from the limited funds available. The 3Es: Valuefor money is interpreted as providing an economic, efficient and effectiveservice.

·        Economy – an input measure. Are theresources the cheapest possible for the quality desired·        Efficiency – here link inputs andoutputs. Is the maximum output being achieved from the resources used·        Effectiveness – an output measure looking atwhether objectives are being met. 1.7 Evaluationof Stakeholder Based Measures and Environmental Performance.

Normally stakeholders have differentobjectives when evaluating the performance of the organization as other evaluatesthe environmental performance as another means of evaluating financialperformance. But often the objective of the environmental performance is toscreen risk investments by sorting out entities that are exposed toenvironmental risks. When evaluating the environmental performance someinvestors may be interest on the past performance but others may be interestedin the future performance but based on the current measures. In general to measuresenvironmental performance is difficult as there is limited data to compareamong firms. With this scarcity of publicly available data, some investors havebeen matching the Toxic Release Inventory (TRI) data with analysis of thecompany, but others have been asking directly the management of the companyabout their environmental management measures and performance although the sogiven information is not often comparable across industry with other firmsunwilling to respond to give information. 1.8Evaluation of Suitable ApproachFrom the evaluation, I propose thebalance score card as the best evaluation modal, this modal has been effectivein firm performance as it involves broad perspectives of the businessenvironment.

The approach considers perspectives such as customersatisfactions, internal business processes, financial strengths and learningand innovations. 1.9How Transfer Price Distort Performance EvaluationThereare situation where the cross border transaction affects company profits.Companies tend to sell internally to avoid tax.  Transfer price is applicable to two companiesof the same ownership normally the parent company and the subsidiary company orsometimes to divisional or department of the organizations where one divisionserves the interest of the other.  Themain reason for transfer pricing is to maximize profit as a group and notnecessary to each division or company. How do they profit; Company A may supplyproducts to company B which is running at a country with high tax rates, tooffload the tax burden company A overstate their price when supplying tocompany B as a technique to reduce their profit due to high expenses thuscompany A report high revenue because of selling at high price while company Bpay low tax since realized low profit, but as a group they maximize theirprofit.Whatis the effect of transfer pricing on performance evaluation The effect of the transfer pricing normallywill depend on the transfer pricing methods since transfer may be depending onmarket price negotiation or full cost price.

Butin general, the transfer of price should be comfortable to both divisionalmanagers as any fluctuations have a significant impact on the profitability ofthe division and hence poor performance. If the transfers price is too highthen supplying division will have high profit and the vice versa is true as aresult it can lead to misleading profit1.10Analysis of Financial and Non-financial PerformanceThis part of financial and non financialanalysis uses Tanzania Portland Cement Company (TPCC) as a case study. The datacollected from the company financial statements and analysis includesstatements from year 2014 to 2016ProfitabilityRatiosThe findings shows that the company isfinancially healthier as all profitability ratios is above 10% which shows thatthe company is efficient in utilizing its asset to increase revenue as well ascost management. Despite that performance, the ratios show a decreasing trend whichis not a good sign to investors and lending institutions.LiquidityRatiosThe finding shows thatthe firm ability to meet short term obligations has been fantastic during theyear 2014 where the current assets was able to cover current debts two times.

But this performance has been deteriorating over time as the findings shows thatin 2016 the company was unable to meet short term obligations without sellingtheir stocks. This is not a good indicator to supplier and other stakeholderssuch as employees.     WorkingCapital RatiosThe findings from company activityratios show that they are inefficient in utilizing the company assets toincrease sales. The company has been efficient in receivable turnover comparedto other activity ratios such the inventory turnover and fixed assets turnover.This tells us that the company use less days in collecting their receivablethan turning their inventory into sales. MarketRatiosAs the earnings of the company decreaseover time, this has affected the company earnings ratios as in 2014 the companyhad an earnings per share of 302 compared to 221 in 2016. But this fluctuationhas no big impacts on the declared dividend as the dividend per share increasedfrom 267 in 2014 to 270 0n 2016on average.

LeverageRatiosThefinding shows that the company is less leverage as the gearing ratios was lessthan 50% which implies that still the company can borrow to finance theirinvestments. . Financial leverage ratios (debt ratios) indicate the ability ofa company to repay principal amount of its debts, pay interest on itsborrowings, and to meet its other financial obligationsReferenceBanker R.

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