$8-12$ The purpose of a client's performance measurement system is to measure the client's progress toward specific objectives. Performance measurement includes ratio analysis and benchmarking against key competitors.

Performance measurements for a chain of retail clothing stores could include gross profit by product line, sales returns as a percentage of clothing sales, and inventory turnover by product line. An Internet portal's performance measurements might include number of website hits or search engine speed. A hotel chain's performance measures include occupancy percentages and average room rate.

$8-13$ Gordon could improve the quality of his analytical tests by:

Making internal comparisons to ratios of previous years or to budget forecasts.