Caro Company, a multidivisional company, has had a tough year. Because of a slowdown in the economy, Caro has experienced a 25% decline in overall profitability. The company managers are currently developing a performance-measurement process to help identify areas where the company needs to improve. Aldo Amatto, the company CEO, particularly wants to be able to identify financial indicators, such as changes in net income and gross margin, as well as return on investment. He also wants to track performance measures to ensure that the company is reaching its cost-reduction targets. Melinda Jenkins, a management accountant, feels that Caro Company also needs to focus on non-financial performance measures.

Is Melinda correct? Why?