Divisional Performance Measurement: Difference between revisions

Revision as of 08:29, 9 February 2011

A Divisional performance measurement could look like this:

For Example

Sales	900
less VC	400
CONTRIBUTION+	500	(note:no good for management performance measurement because Mgr can control FC)
less controllable FC	100
CONTROLLABLE PROFIT	400	(Good for Mgr performance measurement unless it's a profit center they have no control over depreciation)
less Non-controllable FC	100
DIV PROFIT Before Corp Exp's	300	(Good measure of Division's economic performance)
Corp Exp	100	(Arbitrary allocation)
DIV NET PROFIT	200	(Good measure of comparison with peer companies)

@@ Line 13: / Line 13: @@
 |500
 |''(note:no good for management performance measurement because Mgr can control FC)''
-|}
 |-
-less controllable FC|100
+|less controllable FC
+|100
 |-
-CONTROLLABLE PROFIT|400|''(Good for Mgr performance measurement unless it's a profit center they have no control over depreciation)''
+|CONTROLLABLE PROFIT
+|400
+|''(Good for Mgr performance measurement unless it's a profit center they have no control over depreciation)''
 |-
-less Non-controllable FC|100
+|less Non-controllable FC
+|100
 |-
-DIV PROFIT Before Corp Exp's|300|''(Good measure of Division's economic performance)''
+|DIV PROFIT Before Corp Exp's
+|300
+|''(Good measure of Division's economic performance)''
 |-
-Corp Exp|100|''(Arbitrary allocation)''
+|Corp Exp
+|100
+|''(Arbitrary allocation)''
 |-
-DIV NET PROFIT|200|''(Good measure of comparison with peer companies)''
+|DIV NET PROFIT
+|200
+|''(Good measure of comparison with peer companies)''
 |}