Which statement correctly contrasts leading indicators and lagging indicators?

Which statement correctly contrasts leading indicators and lagging indicators?

• A. Leading indicators predict future results
• B. Lagging indicators measure past performance
• C. Both provide real-time operational status
• D. Neither relate to performance metrics

Answer: (A)

Leading indicators are forward-looking metrics that help predict what will happen and guide proactive actions to influence outcomes. Lagging indicators, in contrast, reflect results after events have occurred, confirming what happened. Because of this, the best statement highlights the predictive nature of leading indicators versus the retrospective nature of lagging indicators. For example, monitoring the number of new customer inquiries can signal upcoming sales (a leading indicator), while quarterly revenue shows what was earned after the period (a lagging indicator). The other options either misstate the real-time status aspect or describe lagging indicators without contrasting them to leading indicators.

Leading indicators are forward-looking metrics that help predict what will happen and guide proactive actions to influence outcomes. Lagging indicators, in contrast, reflect results after events have occurred, confirming what happened. Because of this, the best statement highlights the predictive nature of leading indicators versus the retrospective nature of lagging indicators. For example, monitoring the number of new customer inquiries can signal upcoming sales (a leading indicator), while quarterly revenue shows what was earned after the period (a lagging indicator). The other options either misstate the real-time status aspect or describe lagging indicators without contrasting them to leading indicators.