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

Explain about opportunity cost pricing, Q. Explain about Opportunity cost p...

Q. Explain about Opportunity cost pricing? Opportunity cost pricing is considered most mathematically correct way of viewing transfer pricing. Reason is that it looks at transf

What do you mean by inventory days, Q. What do you mean by Inventory days? ...

Q. What do you mean by Inventory days? (Average inventory / Cost of sales)     x      365 days Average inventory can be arrived by taking this year's and last year's invento

The strategic option of withdrawal might be considered where, An organizati...

An organization is unable to secure enough resources or competence.

Organisation and develop a strategic plan, Develop Strategic Plan This...

Develop Strategic Plan This assessment requires that you analyse the capabilities of an organisation and develop a strategic plan. To enable you to do this you must complete t

Illustrate about return on capital employed, Q. illustrate about Return on ...

Q. illustrate about Return on capital employed? Return on capital employed (ROCE)       =    (Profit before interest and tax (PBIT) / Capital employed) x 100%       RO

Free cash-flow valuations, Q. Free cash-flow valuations? Earnings creat...

Q. Free cash-flow valuations? Earnings create dividends for shareholders. In theory the value of a company is the value of the company's future earnings, discounted at a rate,

Briefly explain the it merger process, Question: (a) Company mergers a...

Question: (a) Company mergers are major change projects. Briefly explain the IT merger process involved. (b) A study showed that successful steering committees introduce a

Show the relationship between equity and debt, Q. Show the relationship bet...

Q. Show the relationship between equity and debt? Gearing is the relationship between equity and debt.  Debt is generally long term liabilities that the organisation has.  Equi

What is benchmarking, A technique employed to help with deciding which soft...

A technique employed to help with deciding which software package to select.

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