Divisional Performance Measurement
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| − | + | A Divisional performance measurement could look like this: | |
| − | + | For Example | |
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| − | + | {| border="1" align="center" style="text-align:left;" | |
| + | |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]] | ||
[[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
