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Financial results controls Financial resposability centers - Coggle…
Financial results controls
Financial resposability centers
investment
centers
are held accountable for the accounting returns (profits) on the investment made to generate those returns
objectives ROI
Generate maximum profits from the resources at their disposal
Invest in additional resources only when such an investment will produce an adequate return
profit
centers
Managers of profit centers are held accountable for generating profits
profit
EBITDA - advertising and promotion
EBIT
EBITDA
profit after tax
revenues
centers
Managers of revenue centers are held accountable for generating revenues
then revenue responsibility will not necessarily lead to the most profitable sales
most revenue center managers are also held accountable for some expenses (Such costs are only a small fraction of the revenues generated)
expences
centers
Managers of expense (cost) centers are held accountable for expenses
Standard
” or “engineered” expense centers
Inputs and outputs can be measured in monetary terms
Standard cost vs. actual cost
“Managed
” or “discretionary” expense centers
Outputs produced are difficult to measure
Subjective, non-financial controls
For example, quality of service provided