Which of the following is an example of a non-financial performance indicator?

Prepare for the AAT Applied Management Accounting (AMAC) Level 4 Exam. Use flashcards and practice questions with hints and explanations. Excel in your exam journey!

A non-financial performance indicator provides insight into aspects of a business that do not relate directly to monetary outcomes. In this context, the customer satisfaction score is a prime example. It reflects how satisfied customers are with a company's products or services, influencing customer loyalty, repeat business, and brand reputation. High customer satisfaction can lead to increased sales and profitability over time, but the score itself does not quantify financial metrics.

On the other hand, annual revenue, profit margin, and return on investment are all financial performance indicators, as they measure quantifiable financial aspects of a business's performance. These metrics rely on monetary values and directly reflect a company’s financial success and efficiency. Therefore, understanding the distinction between financial and non-financial indicators is crucial in performance measurement and strategic planning.

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