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 developing a strategic vision, Developing a Strategic Vision: Phase...

Developing a Strategic Vision: Phase 1 of the Strategy Executing, Strategy Making Process 1.   Very early in the strategy making process, a company's higher-ranking managers mu

Influences on consumer behavior, Using online research and the resources on...

Using online research and the resources on the Student Portal: 1. Identify aspects of culture which may have an impact on the international marketing of your selected marketing

Swot analysis, Before conducting SWOT analysis, it is essential to conduct ...

Before conducting SWOT analysis, it is essential to conduct internal and external analysis for the company. Internal Analysis Product quality and variety: The cCompany is goo

Show the arguments against the controllability principle, Q. Show the Argum...

Q. Show the Arguments against the controllability principle? -  Political arguments may occur over such costs which are more subjective than objective when determining controll

Opportunities in swot analysis , Opportunities: The hotel has now 20 spaci...

Opportunities: The hotel has now 20 spacious rooms that can offer excellent comfort and luxury to the upper middle class people who visit the place. The rooms are completely booke

Swot anlaysis, SWOT ANLAYSIS : The swot analysis of hotel arpanaa reve...

SWOT ANLAYSIS : The swot analysis of hotel arpanaa reveals interesting information about the features and services that are offered by the hotel along with the upcoming opport

Portfolio analysis, In portfolio analysis, the business views its product l...

In portfolio analysis, the business views its product lines and business units as separate investments, each responsible for producing a positive return. These separate investments

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

An organization is unable to secure enough resources or competence.

Process of performing an internal audit, 1. Explain the process of performi...

1. Explain the process of performing an internal audit. Evaluate why prioritizing the relative importance of strengths and weaknesses to include in an IFE Matrix is an important st

Student, explain the role of communication in strategy implementation

explain the role of communication in strategy implementation

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