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Application of zero base budgeting In the following areas ZBB may be applied: 1) redundant schemes may be discontinued 2) identify the duplicate schemes and merge them in
Explain Profitability ratios in relation to sales a) Gross profit ratio b) Net profit ratio c) Operating ratio d) Operating profit ratio e) Expenses ratio
Debt equity ratio Meaning: this ratio establishes a relationship among long term debts and share holders funds. Objective: the objective of computing this ratio is to me
POINT ESTIMATE OF PROBABILITIES This approach requires a number of different values for each of the uncertain variables to be selected. These might be values that are reasonabl
It refers to the length of time given to the buyer to pay for their purchases. Throughout this period no interest is charged on the excellent amount. The credit period usually vari
Advantages of zero base budgeting 1) it provides a basis for evaluating decision packages on the basis of benefit considerations 2) it reduces inefficiency and achieves high
Elimination of non-value added activity JIT manufacturing can be described as a philosophy of management, dedicate to the elimination of waste. Waste is stated as anything whic
Definition of Cost reduction Cost reduction is planned positive approach to reducing expenditure. Cost reduction exercises are planned campaigns to cut expenditure. It is a con
Receivable management is a specialized activity and needs various time and effort on the part of the firm. Collection of receivables frequently poses problems, mainly for small and
What is traditional costing In traditional costing overheads are first related to cost centers (production and service centres) and then to cost object, i.e. production. ABC o
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