Introducing corporate finance
Introducing corporate finance

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Introducing corporate finance

The public sector and not-for-profit sector

Activity 2: The public sector and not-for-profit sector

Allow 5 minutes

Vodafone is in the for-profit sector. Financial performance measures are useful to help the owners and other stakeholders assess the success of the business.

Are financial performance measures relevant in the public sector and not-for-profit sector, too? Explain your response.

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If you think financial performance measures are relevant for all types of business, we agree with you. Value for money is a concern for all providers of finance. As an individual, you are both a user and funder (through taxation payments) of public sector services. Therefore, value for money concerns you.

However, financial performance measures in the not-for-profit sector do not tell the ‘whole story’; non-financial performance measures will be just as useful. The charity Oxfam does not have a profit motive so it is harder to measure performance in solely financial terms.

Go to Oxfam’s ‘What we do’ [Tip: hold Ctrl and click a link to open it in a new tab. (Hide tip)] web page to see Oxfam’s motives.


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