Control ratios, Financial Management

Assignment Help:

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


Related Discussions:- Control ratios

Value of conversion benefits, Having seen the measure used for ...

Having seen the measure used for analyzing the convertible bonds, let us now examine the merits and demerits of convertible bonds, and why or wh

Measurement of interest rate risk, Changes in the bond value is inversely ...

Changes in the bond value is inversely related to the change in the interest rates. If an investor holds a long bond position, he would incur loss if the in

Explain dividend policy decision, Q. Explain Dividend Policy Decision? ...

Q. Explain Dividend Policy Decision? Dividend Policy Decision: - The financial management has to make a decision as to which portion of the profits is to be distributed as divi

Financial analysis, are footnotes important in analysing ratios

are footnotes important in analysing ratios

Explain about the financial risk, Explain about the Financial risk fina...

Explain about the Financial risk financial risk are presumed to be constant, changing cost of each type of capital, j, over time must be affected only by changes in the supply

Define main trends which prevailed in international business, Discuss the t...

Discuss the three main trends which have prevailed in international business throughout the last two decades. The 1980s brought a fast integration of financial markets and inter

Define u.s. dollar and the canadian dollar, Under what circumstance would t...

Under what circumstance would the U.S. dollar and the Canadian dollar be said to have achieved purchasing power parity? The U.S. dollar and the Canadian dollar would be referred

Capital budgeting, identify and explain the key stages in the capital inves...

identify and explain the key stages in the capital investment decision-making process and the role of investment appraisal in this processs..

Financial statement, Telephone service costs the Eggleston Motor Hotel $250...

Telephone service costs the Eggleston Motor Hotel $250 per week. The business pays its phone service bill on the fifteenth day of each month, but it prepares its financial statemen

Financial decision, Should a company pursue price hike or focus on increasi...

Should a company pursue price hike or focus on increasing sales volume

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