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

Decision table, drow decision table of financee managment system

drow decision table of financee managment system

Stock Valuation, You have just purchased a stock that would pay the dividen...

You have just purchased a stock that would pay the dividends of the first four years as D1 = $0.65, D2 = $0.74, D3 = $0.79, D4 = $0.84. You were also told that the dividends would

Graphical method, The graphical method is a simple one, and is the mo...

The graphical method is a simple one, and is the most easily understood of the several linear programming methods. A thorough knowledge of the graphical procedure

How do risk-averse investors compensate for risk, How do risk-averse invest...

How do risk-averse investors compensate for risk when they take on investment projects? Due to the risk aversion, people demand higher rates of return for taking on higher-risk p

Debt and payment, Jane has agreed to sell her Porshe 911 Cabriolet worth RM...

Jane has agreed to sell her Porshe 911 Cabriolet worth RM1.3 million to Lim for the price of RM 500,000. The decision was made rather hastily as Jane need money to pay her creditor

Future value, you just started your first job, and you want to buy a house ...

you just started your first job, and you want to buy a house within 3 years. you are currently saving for the down payment. you plan to save $5,000 the first year. You also anticip

Financial accounting, Briefly explain the accounting concepts which guide t...

Briefly explain the accounting concepts which guide the accountant at the recording stage.

Consequence of the cash operating cycle, Q. Consequence of the cash operati...

Q. Consequence of the cash operating cycle? The cash operating cycle is the length of time among paying trade payables and receiving cash from receivables. It is able to be cal

Globalization of the financial markets, Globalization of the Financial Mark...

Globalization of the Financial Markets There are many economies in the world that have opened their gates for foreign participants and companies. Trading takes place not only i

How does continuous compounding benefit an investor, How does continuous co...

How does continuous compounding benefit an investor? The effect of enhancing the number of compounding periods per year is to increase the future value of the investment.  The

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