Divisional Performance Measurement
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Line 3: | Line 3: | ||
For Example | For Example | ||
− | {| border="1" align="center" style="text-align: | + | {| border="1" align="center" style="text-align:left;" |
|Sales | |Sales | ||
|900.00 | |900.00 | ||
Line 12: | Line 12: | ||
|CONTRIBUTION+ | |CONTRIBUTION+ | ||
|500.00 | |500.00 | ||
− | |'' | + | |''No good for management performance measurement because Mgr can control FC'' |
|- | |- | ||
|less controllable FC | |less controllable FC | ||
Line 19: | Line 19: | ||
|CONTROLLABLE PROFIT | |CONTROLLABLE PROFIT | ||
|400.00 | |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 | ||
Line 26: | Line 26: | ||
|DIV PROFIT Before Corp Exp's | |DIV PROFIT Before Corp Exp's | ||
|300.00 | |300.00 | ||
− | |'' | + | |''Good measure of Division's economic performance'' |
|- | |- | ||
|Corp Exp | |Corp Exp | ||
|100.00 | |100.00 | ||
− | |'' | + | |''Arbitrary allocation'' |
|- | |- | ||
|DIV NET PROFIT | |DIV NET PROFIT | ||
|200.00 | |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 17:49, 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