MultiMedia by Stephen M. Peters© 2002 South-Western Control Techniques.
-
Upload
ezra-harrell -
Category
Documents
-
view
224 -
download
1
Transcript of MultiMedia by Stephen M. Peters© 2002 South-Western Control Techniques.
MultiMedia by Stephen M. Peters © 2002 South-Western
Control Techniques
MultiMedia by Stephen M. Peters © 2002 South-Western
Functional Subsystems
Finance
Human resources
MarketingOperations
(production)
Management information systems
MultiMedia by Stephen M. Peters © 2002 South-Western
Control Techniques
MultiMedia by Stephen M. Peters © 2002 South-Western
Control Techniques
MultiMedia by Stephen M. Peters © 2002 South-Western
Control Techniques
MultiMedia by Stephen M. Peters © 2002 South-Western
Control Techniques
MultiMedia by Stephen M. Peters © 2002 South-Western
Control Techniques
MultiMedia by Stephen M. Peters © 2002 South-Western
Finance Managers
Prepare estimates and forecasts for future sources
and uses of funds.
Determine current and future ability to
meet financial obligations.
Measure and monitor ongoing
operations.
MultiMedia by Stephen M. Peters © 2002 South-Western
Financial Controls
Ratio Analysis Audits
Responsibility Centers
Financial Statements
MultiMedia by Stephen M. Peters © 2002 South-Western
The Equation thatDescribes a Balance Sheet
Assets = Liabilities + Stockholders’ Equity
MultiMedia by Stephen M. Peters © 2002 South-Western
Assets Fall IntoOne of Two Categories
1. Current assets are cash or items that are normally converted into cash within one year from the date of the balance sheet.
2. Fixed assets are assets not intended for sale or conversion to cash. Fixed assets include land, buildings, and equipment.
MultiMedia by Stephen M. Peters © 2002 South-Western
Liabilities Current and Long-Term Debts
Current liabilities are debts due and payable within one year of the date of the balance sheet.
Current liabilities are debts due and payable within one year of the date of the balance sheet.
Long-term liabilities are those due after one year from that date.
Long-term liabilities are those due after one year from that date.
MultiMedia by Stephen M. Peters © 2002 South-Western
Income Statement Equation
Income - Expenses = Profit or Loss
MultiMedia by Stephen M. Peters © 2002 South-Western
Income Statement Seven Categories
Net sales Costs of goods sold Gross profit Operating expenses Net income (or loss) before taxes Taxes Net income, the profit left after paying taxes
MultiMedia by Stephen M. Peters © 2002 South-Western
Financial Audits
• Internal Audits– Keep problems in-house.– Are likely to be conducted by people who know operations well.– May lack objectivity.– May also lack the power to penetrate cover-ups.
• External Audits– An independent public accounting firm conducts an external
audit.– Federal regulations require publicly traded companies to
conduct certified external audits each year.– Enhances creditability.
MultiMedia by Stephen M. Peters © 2002 South-Western
Budgets Serve Managersin Four Important Ways
1. They expedite allocation and coordination of resources for programs and projects.
2. They operate as a powerful monitoring system when supplemented with periodic budget updates.
3. They provide rigorous control guidelines for managers by setting limits on expenditures.
4. They facilitate evaluation of individual and department performance.
MultiMedia by Stephen M. Peters © 2002 South-Western
Five Budget Considerations
Setting goalsPlanning and scheduling to
reach the goals Identifying and pricing
resources Locating needed funds Adjusting goals, plans, and
resources to match actual fund availability.
MultiMedia by Stephen M. Peters © 2002 South-Western
BudgetsFour Standardized Approaches (1 of 4)
Top-Down Budgeting
Senior managers prepare budgets and distribute them to lower levels, with or without input from below.
This method may plan and control without cooperation and knowledge of subordinates.
MultiMedia by Stephen M. Peters © 2002 South-Western
BudgetsFour Standardized Approaches (2 of 4)
Bottom-Up Budgeting
Taps the knowledge and experiences of all organization members.
Those closest to the planned activities contribute to building the budget that affects them.
MultiMedia by Stephen M. Peters © 2002 South-Western
BudgetsFour Standardized Approaches (3 of 4)
Zero-Based Budgeting Eliminates complacency. Must justify every dollar requested in light of
strategic plans and goals. Must list the costs of all resources. Must choose priorities and create alternatives for
accomplishing the unit’s part in the overall strategic plan.
MultiMedia by Stephen M. Peters © 2002 South-Western
BudgetsFour Standardized Approaches (4 of 4)
Flexible Budgeting
Levels of expense are correlated with specified output levels.
Sets “meet or beat” standards with which expenditures can be compared.
Unit expenses within budgeted amounts are usually permitted.
MultiMedia by Stephen M. Peters © 2002 South-Western
Financial Budgets
Cash Budgets project the amount of cash that will flow into and out of an organization and its subsystems during a fixed period.
Capital Expenditure Budgets project the short- and long-term funding needed to acquire capital goods.
MultiMedia by Stephen M. Peters © 2002 South-Western
Marketing Umbrella
Product design
Packaging
Pricing
Distribution
Sales
Customer service
MultiMedia by Stephen M. Peters © 2002 South-Western
Marketing Control Techniques
Market research
StockageSales quotas
Test marketing
Marketing ratios
MultiMedia by Stephen M. Peters © 2002 South-Western
Marketing Research
A feedforward control technique
Consists of gathering and analyzing geographic, demographic, and
psychographic data
.
.
MultiMedia by Stephen M. Peters © 2002 South-Western
Test Marketing–Four Points
1. Introduce it to a limited market on a small scale to assess its acceptance.
2. Disadvantage of extensive test marketing is that it can tip a company’s hand to competitors.
3. Planners analyze the results of testing to determine if the company should proceed with manufacturing, distribution, or modifications.
4. Limits the risks a company faces when introducing something new.
MultiMedia by Stephen M. Peters © 2002 South-Western
Marketing Ratios
Frequently used measures include: Ratio of profit to sales Costs of selling to gross profit Sales calls to orders generated Profitability of each order Changes in sales volume to price changes Ratio of bad debts to total credit granted Sales volume to production capacity for the entire organization Market share Order turnaround time
Frequently used measures include: Ratio of profit to sales Costs of selling to gross profit Sales calls to orders generated Profitability of each order Changes in sales volume to price changes Ratio of bad debts to total credit granted Sales volume to production capacity for the entire organization Market share Order turnaround time
MultiMedia by Stephen M. Peters © 2002 South-Western
Stockage Level of inventory. Money tied up in inventories is
unavailable for other uses. Must reduce the number of slow-moving
items or eliminate the items altogether. Devote most of the best display areas to
items that yield the largest profits. Tracking stockage levels, managers can:
Determine normal usage rates.Maintain minimum levels.Set efficient reorder points.
MultiMedia by Stephen M. Peters © 2002 South-Western
Cost of Maintaining Inventories