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

Corporate bonds, Corporate bonds are debt securities issued by privat...

Corporate bonds are debt securities issued by private and public corporations. These bonds are issued to meet specific requirements like building a new plant, pur

How working capital affect incremental cash flow estimation, How and why do...

How and why does working capital influence the incremental cash flow estimation for a planned large capital budgeting project?  Explain. Many large projects need additional worki

Explain the term phishing, QUESTION (a) (i) Describe briefly two potent...

QUESTION (a) (i) Describe briefly two potential E-Banking risks that may have an adverse impact on banks. (ii) Outline some measures to control these two risks. (b) Outli

Distinguish between a promissory note and a bill of exchange, QUESTION ...

QUESTION (a) "A promissory note is an instrument in writing (not being a blank or a currency note) containing an unconditional undertaking, signed by the maker, to pay a certai

Determine wacc- net operating cash flow- npv- irr-pi, Prepare a capital bud...

Prepare a capital budget analysis of the following data, your analysis should determine WACC, Net Operating Cash Flow, NPV, IRR, PI, and Payback analysis. This analysis is for t

Operating cycle, disscus the applicability of operating cycle in vegetable ...

disscus the applicability of operating cycle in vegetable in uganda

Fiancial management, Ashok is to receive an amount of Rs. 15,00,000 from hi...

Ashok is to receive an amount of Rs. 15,00,000 from his relative after 3 years. He wants to buy a house for which he wants the money to be paid now. His relative had al

Federal reserve board, Federal Reserve Board The Federal Reserve Board ...

Federal Reserve Board The Federal Reserve Board controls the nation's monetary policy, regulates banks, and searches to keep the financial stability of the United States. Its t

Zero-volatility spread, The zero-volatility spread is a measure of th...

The zero-volatility spread is a measure of the spread that the investor would realize over the entire Treasury spot rate curve if a mortgage-backed or asset-backe

Portfolio management, Portfolio Management: Project Portfolio Manageme...

Portfolio Management: Project Portfolio Management (PPM) is the centralized management of processes, technologies and methods used by project management offices (PMOs) and pro

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