Impact of Non-financial Indicators on the Financial Condition of the Company

The study aimed at examining non-financial indicators adopted by Apple, Microsoft and Samsung to promote efficiency. Also, the research study is to help Identify the types of non-financial indicators that affect the financial performance of these companies, to ascertain how the effectiveness level of non-financial indicators could be improved and possible weaknesses in the factors that have potential effect on the performance of the company. This thesis reveals a lot of different theoretical approaches to understanding the nature, classification, evaluation and measurement on non-financial indicators, which are in scientific literature and are considered as the indicators for measurement and evaluation of intellectual capital. The aim of the thesis is to come out with recommendations on the evaluation of non-financial indicators and its practical implementation in companies and analyze the generalization of the scientific economic publications in the field of company performance. Secondary data were employed in the study. Secondary data was sourced from textbooks, journals, articles and other publications on non-financial indicators and its contribution to company’s short- and long-term performance that led to improvement in the capitalization of the company in the long run. The findings of the study revealed that non-financial indicators used by Apple, Microsoft and Samsung are as follows: 1. Customer satisfaction, 2. ESG factors, 3. Internal process (Innovation), 4. Learning and growth (Human resource). And the most effective and efficient indicator used by these companies are Human resources. It came to light that human resource as a non-financial indicator acts as the pivot around which the companies rotate. Human resource is the reason for these companies’ massive performance. This is because human resources organize, coordinate and use the scarce resources of Apple, Microsoft and Samsung efficiently to maximize shareholders wealth. The recommendations drawn from the study was that non-financial indicators are the backbone of these companies. As a result of that, the companies should institutionalize it in order to create a common system or procedure for measuring and evaluating it. Also, companies should be transparent when giving out non-financial information. The importance of this study cannot be overemphasized, as it sets out to unearth how an effective and efficient non-financial indicator system can function and impacts positively on value creation. Thereby helping policy formulators and decision makers in companies to know the kind of policy instruments regarding non-financial indicators that will help them to shape their respective organizations and institutions so as to make them more efficient and viable and vision oriented.