Divisional Performance Measurement
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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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| − | + | A Divisional perfoamnce measurement could look like this: | |
| − | + | For Example | |
| − | less VC | + | *Sales...........................900 |
| − | CONTRIBUTION................500...no good for management performance | + | *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 09:57, 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
