Control ratios, Financial Management

Control ratios: Three important ratios are usually used by the management to find out whether the variations from budgeted results are unfavorable or favorable.  These ratios are expressed as percentages and any ratio beyond 100% is favorable and an ratio less than 100% is unfavorable. The three ratios are:

a)      Activity Ratio: this ratio is a measure of the level of activity attained over a period.

244_activity ratio.png

b) Capacity Ratio:  capacity ratio specifies whether and to what extent budgeted hours of activity are actually utilized..

1934_capacity ratio.png

c) Efficiency Ratio:   Efficiency ratio specifies the degree of efficiency attained in production.

1494_efficiency ratio.png

Posted Date: 10/15/2012 8:25:13 AM | Location : United States







Related Discussions:- Control ratios, Assignment Help, Ask Question on Control ratios, Get Answer, Expert's Help, Control ratios Discussions

Write discussion on Control ratios
Your posts are moderated
Related Questions
A regional division of a water company is upgrading its water filtration & purification plant; the new system is expected to last 20 years & to cost $40m. The parent company has ha

Various bond features largely affect the degree of correlation between the bond's prices and the bond's interest rates. Some of the bond feature

MARGINAL ANALYSIS It is difficult to develop the conditional profit table when there are a large number of scenarios and possible actions. The marginal analysis approach sides

Q. How Amount of financing affecting cost of capital? Amount of financing as the financing require of the firm become larger , the weighted cost of capital increased several re

Determine the factors of Large organisations -  Greater efficiency and productivity achieves economies of scale -  Easier to manage, organise and control workers through hie

Option-Adjusted Spread (OAS) The prime objective of an investor is to buy securities which have values greater than their market prices. The discussion made on the above valuat

6 KEY STAGES OF INVESTMENT DECISION WITH APPROPRIATE DIAGRAM

Determination of explicit cost of capital Approach of determination of explicit cost of capital is similar to the one used to ascertain IRR, with one difference, in case of co

What are compensating balances and why do banks require them from some customers?  Under what circumstances would banks be most likely to impose compensating balances? Compensa

Explain the terminal value calculation at the end of the forecast period.  Why is it necessary? The firm whose business operation is being valued isn't expected to suddenly cea