Divisional Performance Measurement: Difference between revisions
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A Divisional perfoamnce measurement could look like this: | |||
For Example | |||
less VC............................ | *Sales...........................900 | ||
*less VC.........................400 | |||
less controllable FC...........100 | *CONTRIBUTION+...................500...'(note:no good for management performance measurement because Mgr can control FC' | ||
CONTROLLABLE PROFIT.....400...Good for | *less controllable FC............100 | ||
less Non- | *CONTROLLABLE PROFIT.............400...'(Good for Mgr performance measurement unless it's a profit center they have no control over depreciation | ||
DIV PROFIT | *less Non-controllable FC........100 | ||
Corp Exp.......................... | DIV PROFIT Before Corp Exp's.....300...'(Good measure of Division's economic performance)' | ||
DIV NET PROFIT................ | Corp Exp.........................100...'(Arbitrary allocation) | ||
DIV NET PROFIT...................200...'(Good measure of comparison with peer companies)' | |||
See [[Divisionalization]] | |||
See [[Residual Income]] | |||
[[Category:Finance]] | [[Category:Finance]] | ||
Revision as of 07:57, 9 February 2011
A Divisional perfoamnce 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)'
See Divisionalization See Residual Income
