tailieunhanh - Management accounting: Information for creating and managing value (4/e): Chapter 13 - Kim Langfield-Smith, Helen Thorne

Chapter 13 - Financial performance measures for investment centres and reward systems. After completing this chapter, you should be able to: calculate an investment centre’s return on investment (ROI), and residual income; describe some advantages and limitations of both ROI and residual income as performance measures; explain how to minimise the negative behavioural incentives associated with using return on investment to evaluate performance;. | Chapter 13 Financial performance measures for investment centres and reward systems 13- Financial measures in investment centres Focus on summary profit-based measures used to evaluate the performance of profit centres and investment centres Return on investment (ROI) Residual income (RI) Economic value added (EVA) 13- Return on investment Return on investment (ROI) Used to measure the performance of an investment centre 13- Return on investment 13- Return on investment Invested capital The assets that the investment centre has available to generate profits Return on sales The percentage of each sales dollar that remains as profit after all the expenses are covered Investment turnover The number of sales dollars generated by every dollar of invested capital 13- Return on investment Improving ROI Increase return on sales By increasing the selling price or sales revenue, or decreasing expenses Increase investment turnover By increasing sales revenue or reducing invested capital Actions that are taken with the sole purpose of making these ratios more favourable in the short term may have adverse effects on performance in future years 13- The advantages of ROI Very widely used to measure the performance of divisions and managers Encourages managers to focus on profits, and the assets required to generate those profits Promotes an understanding of the relationship between revenues, costs and assets Can be used to evaluate the relative performance of investment centres Even when those business units are of different sizes 13- The limitations of ROI Encourages managers to focus on short-term financial performance at the expense of long-term viability and competitiveness Encourages managers to defer asset replacement To maintain high divisional ROI and apparent high performance Discourages managers from investing in projects which are acceptable from the organisation’s point of view, but decrease the investment centre’s ROI 13- Minimising | Chapter 13 Financial performance measures for investment centres and reward systems 13- Financial measures in investment centres Focus on summary profit-based measures used to evaluate the performance of profit centres and investment centres Return on investment (ROI) Residual income (RI) Economic value added (EVA) 13- Return on investment Return on investment (ROI) Used to measure the performance of an investment centre 13- Return on investment 13- Return on investment Invested capital The assets that the investment centre has available to generate profits Return on sales The percentage of each sales dollar that remains as profit after all the expenses are covered Investment turnover The number of sales dollars generated by every dollar of invested capital 13- Return on investment Improving ROI Increase return on sales By increasing the selling price or sales revenue, or decreasing expenses Increase investment turnover By increasing sales revenue or reducing .

• Ngân hàng - Tín dụng
• Management accounting
• Lecture Management accounting
• Management accounting information
• Managing value
• Financial performance measures
• Investment centres
• Financial accounting
• Management accountants
• Business environment
• Bài giảng Kế toán quản trị
• Nature of management accounting
• Component of accounting system
• Managerial accounting
• Management accounting systems
• Costing systems
• Environmental management accounting
• Cst accounting in action
• Management cost accounting
• Accounting for management
• Cost accounting in action
• Advanced fraud
• Managing resources
• Australian organisations
• Emphasis on cost
• Social management accounting
• Corporate social responsibility
• Paper F2
• Revision kit 2016
• Document management accounting
• Management accounting Review
• Implementation of management accounting
• Study text 2016
• Tiếng Anh kinh doanh
• F2 Management Accounting
• ACCA Paper F2
• Paper F2 Management Accounting
• Book ACCA Management Accounting
• Lecture Advanced management accounting
• Bài giảng Kế toán quản trị nâng cao
• Advanced management accounting
• Inflation accounting
• Current purchasing power method
• Current cost accounting method