Strategy and integrated financial ratio performance measures: Empirical evidence of the financial performance scorecard and high performance companies

Following our prior research (Frigo et al., 2002; Needles et al., 2002), we continue to examine the link between strategy and financial performance, as well as, the underlying performance drivers that describe how a company executes strategy to create financial value. We also present a structured, theoretical framework for integrated financial ratio analysis that links financial objectives, performance drivers and performance measures for value creation. We investigate empirically companies in the United States S&P 500 and companies that have displayed characteristics of return-driven, high performance companies. We find support for the hypothesized relationships in the model and of above-mean performance by high performance companies across all performance measures.