11 Performance measurement and control Flashcards Preview

F5 Performance Management > 11 Performance measurement and control > Flashcards

Flashcards in 11 Performance measurement and control Deck (24)
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1
Q

How do you calculate ROCE?

A

Net profit / capital employed

2
Q

What is capital employed?

A

Total assets less current liabilities or total equity + long terms be

3
Q

What kind of ROCE score do you want ?

A

A high one which can be achieved by increasing profit

4
Q

How do you calculate asset turnover?

A

Turnover / capital employed

5
Q

What kind of asset turnover do you want?

A

A high one

6
Q

How do you calculate current ratio?

A

Current assets / current liabilities

7
Q

What does the current ratio show?

A

Company’s ability to meet its short term liabilities as they fall due

8
Q

How do you calculate quick ratio?

A

Current assets - inventory / current liabilities

9
Q

How do you calculate inventory holding period?

A

Inventory / cost of sales x 365

10
Q

How do you calculate debtor days?

A

Receivables / turnover x365

11
Q

How to work out creditor days?

A

Payable /purchases x365

12
Q

How to calculate gearing?

A

Debt / equity

13
Q

What does a high level of gearing show?

A

That the company relies heavily on debt to finance debt its long term needs

14
Q

How to work out interest cover?

A

Operating profit / finance cost

15
Q

How to work out dividend cover?

A

Net profit / dividend

16
Q

What does a decrease in dividend cover show?

A

Increased risk of not being able to make its dividend payments to shareholders

17
Q

What are the four perspectives of the balance score card?

A

Customer, internal, innovation and learning, and financial

18
Q

What are the three areas on the building block model?

A

Dimensions
Standards
Rewards

19
Q

What is meant by dimensions in the building block model?

A

Dimensions are the goals for the business and suitable measures must be developed to measure each performance dimensions

20
Q

What are the six dimensions

A
Profit
Competitiveness
Quality
Resource utilisation
flexibility
Innovation
21
Q

What are standards?

A

Targets set for the metrics chosen from the dimensions

22
Q

What are the three standards?

A

Ownership
Achievability
Equity

23
Q

What is meant by rewards?

A

The reward system should be clearly understood by the staff and ensure their motivation

24
Q

What are the three rewards

A

Clarity
Motivation
Controllability