Divisional Performance Measurement: Difference between revisions

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(Created page with "See Divisionalization eg Sales...........................900 less VC............................400 CONTRIBUTION................500...no good for management performance mmea...")
 
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See [[Divisionalization]]
A Divisional performance measurement could look like this:


eg Sales...........................900
For Example
less VC............................400
CONTRIBUTION................500...no good for management performance mmeasurement because Mgr can control FC
less controllable FC...........100
CONTROLLABLE PROFIT.....400...Good for manager perfoermance measurement. But if its a profit center they have no control over depreciation
less Non-con FC................100
DIV PROFIT BF Corp Exp...300Good measure of Fiv's economic perforamance
Corp Exp..........................100 Arbitrary allocation
DIV NET PROFIT................200Good measure of comaprison with peer companies


See [[Residual Income]]
{| border="1" align="center" style="text-align:left;"
|Sales
|900.00
|-
|less VC
|400.00
|-
|CONTRIBUTION+
|500.00
|''No good for management performance measurement because Mgr can control FC''
|-
|less controllable FC
|100.00
|-
|CONTROLLABLE PROFIT
|400.00
|''Good for Mgr performance measurement unless it's a profit center they have no control over depreciation''
|-
|less Non-controllable FC
|100.00
|-
|DIV PROFIT Before Corp Exp's
|300.00
|''Good measure of Division's economic performance''
|-
|Corp Exp
|100.00
|''Arbitrary allocation''
|-
|DIV NET PROFIT
|200.00
|''Good measure of comparison with peer companies''
|}
 
*See [[Divisionalization]]
*See [[Residual Income]]
*See [[Performance Pyramid]]


[[Category:Finance]]
[[Category:Finance]]

Latest revision as of 15:49, 19 September 2012

A Divisional performance measurement could look like this:

For Example

Sales 900.00
less VC 400.00
CONTRIBUTION+ 500.00 No good for management performance measurement because Mgr can control FC
less controllable FC 100.00
CONTROLLABLE PROFIT 400.00 Good for Mgr performance measurement unless it's a profit center they have no control over depreciation
less Non-controllable FC 100.00
DIV PROFIT Before Corp Exp's 300.00 Good measure of Division's economic performance
Corp Exp 100.00 Arbitrary allocation
DIV NET PROFIT 200.00 Good measure of comparison with peer companies
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