Five lenses for performance measurement
Accounting, operational, market-based, survival, and economic-value lenses on firm performance, each with its own bias and blind spot.
A 4-minute animated framework for evaluating firm and investment performance through five complementary lenses. Built for FIN301 Investment Management and the Honours College Investments stream at UEH-ISB.
The five lenses are: accounting performance (ROA, ROE, margin), operational performance (efficiency, productivity, asset turnover), market-based performance (Tobin's Q, market-to-book, share-price returns), survival (default risk, bankruptcy distance), and economic value added (EVA, residual income). Each lens reveals something the others miss and obscures something the others see clearly.
The lesson closes with a worked example showing why a single-lens evaluation can mislead — a firm can look healthy on accounting metrics while failing on survival, or vice versa.