Divisional Performance Measurement: Difference between revisions
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A Divisional | A Divisional performance measurement could look like this: | ||
For Example | For Example | ||
{| | |||
|Sales | {| border="1" align="center" style="text-align:left;" | ||
|Sales | |||
|900.00 | |||
|- | |- | ||
less VC | |less VC | ||
|400.00 | |||
|- | |- | ||
CONTRIBUTION+ | |CONTRIBUTION+ | ||
|500.00 | |||
|''No good for management performance measurement because Mgr can control FC'' | |||
|- | |- | ||
less controllable FC | |less controllable FC | ||
|100.00 | |||
|- | |- | ||
CONTROLLABLE PROFIT | |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 | |less Non-controllable FC | ||
|100.00 | |||
|- | |- | ||
DIV PROFIT Before Corp Exp's | |DIV PROFIT Before Corp Exp's | ||
|300.00 | |||
|''Good measure of Division's economic performance'' | |||
|- | |- | ||
Corp Exp | |Corp Exp | ||
|100.00 | |||
|''Arbitrary allocation'' | |||
|- | |- | ||
DIV NET PROFIT | |DIV NET PROFIT | ||
|200.00 | |||
|''Good measure of comparison with peer companies'' | |||
|} | |} | ||
See [[Divisionalization]] | *See [[Divisionalization]] | ||
See [[Residual Income]] | *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 |
- See Divisionalization
- See Residual Income
- See Performance Pyramid
