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Operations and Financial Performance: Ho...

Chao, Raul O., Gol...

Technical Note

Operations and Financial Performance: How Operations Management Affects the Profit-and-Loss Statement

Chao, Raul O.; Goldberg, Rebecca

OM-1633 | Published September 3, 2025 | 3 Pages Technical Note

Collection: Darden School of Business

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Product Details

This technical note is part of a set that focuses on the links between operations and firm performance, including how operations management decisions impact the financial performance metrics and financial statements of the firm. While designed to be used together, the three technical notes can also be used as stand-alone documents to support particular learning objectives. The other two notes in this set are “Operations and Financial Performance: “Operations and Financial Performance: How Operations Management Drives Performance” (UVA-OM-1632); and "Operations and Financial Performance: How Operations Management Decisions Affect the Balance Sheet” (UVA-OM-1634). These materials form one module in our collection of introductory operations management topics, and all are appropriate for an advanced undergraduate- or graduate-level introductory course on operations management. The complete list of the materials in this collection is available in the teaching materials included with this technical note.

1. Explore the broad links between core operations management decisions and financial outcomes. 2. Show how operating income, volume of units sold, and price point tolerated by the market are all related to operations management decisions. 3. Present a high-level view of how cash, accounts receivable, inventories, accounts payable, and shareholders’ equity are all related to operations management decisions.