Methods for evaluating the performance of divisions, Strategic Management

Assignment Help:

Q. Methods for evaluating the performance of divisions?

Profit based methods for evaluating the performance of divisions

Operating profit (net profit) margin 

=           (Profit before interest and tax (PBIT)/ Turnover)x 100% 

Gross profit (sales) margin 

   =            (Turnover less cost of sales (gross profit)/ Turnover)   x 100%                

Generally the gross profit or sales margin can also be referred to as the contribution to sales (C/S) ratio e.g. gross profit (sales less variable cost) ÷ sales.                

Mark up

        =          (Turnover less cost of sales (gross profit) / Cost of sales) x 100%          

Controllable profit

The controllability principle indicated that a manager should not be assessed on costs which are not within their own control.


Related Discussions:- Methods for evaluating the performance of divisions

Divisional structures – product organisation, Q. Divisional structures – pr...

Q. Divisional structures – product organisation? The functional structure is normally adopted by an entrepreneurial structure e.g. small business, because the organisation grow

Developing corporate culture, propose a framework of organisational values ...

propose a framework of organisational values that meet the specific strategic and operational needs of an organisation

Cues of unmet demand, what cues that might cause a company to suspect there...

what cues that might cause a company to suspect there is unmet demand for its products or services. How would I design a test to determine whether My suspicions are correct?

Discuss the organizational structure of a restaurant, Question 1: (i) ...

Question 1: (i) In food production, the success of the operation depends on the Executive Chef and his various heads of sections in the main kitchen. What are these sections

Assignment, how much assignment cost if maximum 3000 world

how much assignment cost if maximum 3000 world

Restructuring, What is the difference between restructuring, Reengineering ...

What is the difference between restructuring, Reengineering and Development

Strategic management system, 1. Find one research article entitled 'Using t...

1. Find one research article entitled 'Using the balance scorecard as a strategic management system' attached here with. Read this article carefully and give your comments. You may

Explain two-part tariff system, Q. Explain Two-part tariff system? With...

Q. Explain Two-part tariff system? With a two-part tariff system the buyer is charged: A transfer price equal to the seller's variable (marginal) cost for each unit sold

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd