CONTROLLERSHIP

Very useful for determining the

interrelationships between numbers.

Commonly used to plot revenues or

specific expense line items.

It is a performance measure to evaluate the efficiency or profitability of investment.

A good manager uses measurements only as part of the body of knowledge required to do a thorough job of effectively and efficiently running a business.

Other items that a controller should know about in order to plot a strong management

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Answer explanation

1. Branding

2. Company Organization

3. Competitors

4. Goals

5. Management Team

6. Marketplace

7. Monopoly Situations

8. New Market Activities

9. Product Pricing

WHAT ARE THE 4 FINANCIAL PERFORMANCE?

A controller needs to accurately judge the amount of profit extracted from a company’s operations, which means knowing the exact margin earned by division, product line, and product.

GIVE THE 6 MEASURES OF PROFITABILITY

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Answer explanation

1. BREAKEVEN POINT

2. NUMBER OF TIMES INTEREST IS EARNED

3. OPERATING MARGIN BY DIVISION, SEGMENT, PRODUCT LINE

4. PERCENTAGE RETURN ON NET SALES

5. RATIO OF SALES RETURNS AND ALLOWANCES TO GROSS SALES

6. SALES/PROFIT PER PERSON

One of the most heavily measured areas. When used properly, the ratios and percentages noted in this section reveal a great deal of information about a company’s financial health, as well as its financial strengths and weaknesses.

GIVE THE 13 MEASURES OF BALANCE SHEET

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Answer explanation

1. DEBT/EQUITY RATIO

2. RETURN ON SHAREHOLDER EQUITY

3. CURRENT RATIO

4. QUICK RATIO

5. RATIO OF SALES TO ACCOUNTS RECEIVABLE

6. ACCOUNTS PAYABLE TURNOVER

7. RATIO OF REPAIRS AND MAINTENANCE EXPENSE TO FIXED ASSETS

8. RATIO OF DEPRECIATION TO FIXED ASSETS

9. FIXED ASSET TURNOVER

10. RATIO OF RETAINED EARNINGS TO CAPITAL

11. ECONOMIC VALUE ADDED (EVA)

12. WORKING CAPITAL PRODUCTIVITY

13. RETURN ON ASSETS