Flash Cards 1
What’s a balanced scorecard?
- Financial Perspective, customer spend
- Customer Perspective, customer feedback
- innovative and learning perspective, staff turnover
- internal perspective - website offerings
What are the benefits of data analytics?
- increase/better inventory management
- improved purchase data analysis reducing expenditure
- customer profiling, personalised product offerings
- Predictive analysis, measure affects of potential changes
- aid control management through production process through more information
What is Value analysis?
4 Characteristics
- Cost
- Exchange
- Use
- Esteem Value
Reduce costs of features not adding value to customer, value and quality of product kept the same, or improved at a reduced cost, process involves reviewing material and labour cost.
What is the product life cycle?
- Introduction, limited competition
- Growth, more competition
- Maturity, reduction in competition
- Decline, decline in demand, price reductions likely
What is the equation for asset turnover?
Revenue % net assets
What is the equation for return on capital employed?
Operating profit % net assets x 100
What is the equation for the average accounting profit per year?
Profit - Depreciation
What are the benefits of technology in production?
- Speeds processes
- replace time consuming tasks, managers focus on other tasks
- more efficient
- ABC aided by improved technology, calculate cost drivers easier
What are the benefits of ABC over OAR?
- more accurate cost per unit
- provides information in how activities drive costs and recognises costs are not just related to production and sales volume
- as technology increases overheads become a greater cost
- sees how costs are controlled
What are the factors that limit total sales in the sales budget?
- Production capacity
- availability or raw materials and labour
- financial constraints
- market share
What is the NPV?
- Compares the cash invested today with the present value of future cash flows from the investment.
- Cash received in the future worth less than cash today
- Discount cash
- Positive NPV, the present value of cash receipts exceeds the present value of cash expenditure, investment will earn a higher rate of return than cost of capital, investment go ahead
- NPV Negative, present value of cash lower than the present value of expenditure, lower return than cost of capital, not go ahead
What are index numbers?
- Trend to seasonal variance - follow % change
- price per kilo to trend, price per kilo % index X100
- trend to price per kilo, trend % 100 X index
What is IRR?
- Higher IRR, and higher than capital - good
5000 15%, (200) 25% - Step 1, positive NPV figure 5000
- Step 2, positive NPV figure add the negative NPV figure 5200
- Step 3, minus two percentages from each other 10
- Step 4, step 1 figure % step 2 figure, 0.96
- Step 5, 0.96 * 10
- Step 6, take lower NPV percentage plus figure from Step 5
What is the ARR?
- Looks at the average return for a project to see if it meets the target return
- ( Average annual return (average profit less depreciation) % investment X100 ) Calculation
What is the formula for ROI?
Controllable profit % capital employed X100
