Financial performance is measured in many ways.

Requirements

1. Explain the difference between lag and lead indicators.

2. The following is a list of financial measures. Indicate whether each is a lag or a lead indicator:

a. Income statement shows net income of $ 100,000

b. Listing of next week’s orders of $ 50,000

c. Trend showing that average hits on the redesigned website are increasing at 5% per week

d. Price sheet from vendor reflecting that cost per pound of sugar for the next month is $ 2

e. Contract signed last month with large retail store that guarantees a minimum shelf space for Grandpa’s Overloaded Chocolate Cookies for the next year