CHAPTER 14 PART 2 Flashcards
The process of investigating what is being done and comparing the results
with the corresponding budget data to verify accomplishments or remedy differences
• Also called budgetary controlling
Frequently Used Budget Types • Sales • Production • Cost • Cash • Capital • Master
Budgeting
A report that shows the financial picture of a company at a given time and itemizes assets, liabilities, and. stockholders’ equity
Balance Sheet
A liquidity ratio that indicates the extent to which short term assets can decline and still be adequate to pay short-term liabilities
Current Ratio
A leverage ratio that indicates the company’s ability to meet its long-term financial obligations
Debt-equity ratio
A ratio of profit to capital used, or a rate of return from capital
Return on investment (ROI)
_________ should be used when it is difficult to create good measures of work behavior and when the culture is strong.
Normative Controls
To be effective, __________ must use multiple approaches to meet various employee needs.
Control Systems
Preliminary, preventive or pre-action controls. As the name implies, these controls take place before a process to make sure bad things do not happen in the first place. The controls identify actions to be taken before a problem occurs.
EX: Applied to the thermostatically controlled room by installing a temperature sensor outside of the room, which would warn the thermostat about a drop in the outside temperature, so that it could start heating before this would affect the inside temperature.
Feedforward Control
Steering or preventive controls, are ongoing controls that help maintain quality and consistency. They usually involve the monitoring of employees directly involved with customers or the manufacturing process.
EX: Fleet tracking. Fleet tracking by GPS allows managers to monitor company vehicles. Managers can determine when vehicles reach their destinations and the speed in which they move between destinations.
Concurrent Control
A process used by managers to assess the performance of the team. It helps to determine the performance of an individual member of the team. The implementation of the feedback control puts the manager in a position to lead the team effectively.
EX: When a sales goal is set, the sales team works to reach that goal for three months, and at the end of the three-month period, managers review the results and determine whether the sales goal was achieved.
Feedback Control
