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

Saving and lone assocition, what is saving and lone function in ethiopian c...

what is saving and lone function in ethiopian context

Define the explicit cost of capital, Define the Explicit cost of capital ...

Define the Explicit cost of capital Explicit cost of retained earnings that involve no future flows to or from firm is minus 100 per cent. This must not tempt one to infer that

Investment consultant , Suppose, you are working as an investment consultan...

Suppose, you are working as an investment consultant in a consultancy firm and most of your clients are habitual investors, who are maintaining their own portfolios comprising of v

Explain about centralised treasury function, Q. Explain about Centralised t...

Q. Explain about Centralised treasury function? Treasury departments are usually a feature of larger companies than Frantic although it is perhaps beneficial to consider the be

Explain the demand for bananas increases, Suppose the demand for bananas in...

Suppose the demand for bananas increases. Explain how the price of bananas adjusts after the increase in demand. If the demand for bananas rises, a shortage is made at the origin

The visitors perceive to justify the renovation, Lincoln Park Zoo in Chicag...

Lincoln Park Zoo in Chicago is considering a renovation that will improve some physical facilities at a cost of $1,800,000. Addition of new species will cost another $310,000. Addi

Help with 4 questions, I need assistance with 4 questions. How do I know s...

I need assistance with 4 questions. How do I know someone can help me and have some idea of what it would cost before submitting the information? Also, how fast is the turnaround

Preparing financial statements using accrual basis, Question: On a pilo...

Question: On a pilot basis a Government Department, PPO, is preparing its financial statements using accrual basis. The following information is provided: The following bala

Essential features of a sound capital mix, ESSENTIAL FEATURES OF A SOUND CA...

ESSENTIAL FEATURES OF A SOUND CAPITAL MIX A sound or an appropriate Capital structure should have the following essential features : highest possible use of leverage

Prepare a statement of financial position, Brown has been in business for s...

Brown has been in business for some years and has kept her drawings slightly below the level of profits each year. You are her accountant, and she has passed you the following list

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