Performance Management

This category covers all aspects of performance management such as budgeting, forecasting, performance measure and performance evaluation.

How to Calculate Throughput Accounting Ratio?

What is Throughput Accounting? Throughput accounting is a process used in management accounting that focuses on a company’s production efficiency. It looks at the rate at which a company converts its raw materials into finished goods and makes money from them. The purpose of throughput accounting is to identify any bottlenecks in a production process. …

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Variance Analysis in Management Accounting

Management accounting is a part of accounting that concerns a company’s internal matters. Usually, it consists of establishing costs for various products or services and preparing forecasts or budgets. The purpose of management accounting is to help companies with planning, controlling, and decision-making. There are no specific requirements for management accounting, unlike financial accounting, which …

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Return on Net Operating Assets (RNOA): Definition, Formula, and How to Calculate It

Operating assets of a company are directly responsible for producing income from operations. These assets include both fixed and current assets. The net operating assets figure deducts the operating liabilities from the operating assets. The return on net operating assets would then indicate the relation between the net income and operational efficiency of the business. …

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Segment Margin: Definition, Formula, and How to Calculate It

Large companies work with several divisions and different segments. For publically held companies, the SEC requires them to report profits from each segment or division separately. The profit margins arising from each segment or division are termed as the Segment margin. What is Segment Margin? The segment margin is the profit (or loss) arising from …

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Return on Net Assets Ratio: Definition, Formula, and How to Calculate

Net assets are an important metric for equity evaluation for shareholders and lenders. Shareholders in particular are keener on evaluating the impact of their investment. Net assets are theoretically equal to the book value of equity of the shareholders. However, equity is always higher than the book value of net assets with goodwill and fair …

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What is the Weighted Average Contribution Margin in Break-Even Analysis?

The contribution margin for a single product is deducting the variable costs from the sales or revenue figure. The break-even point is the stage where the company makes no profit or losses. Estimating the break-even point for a multiple product facility can take different methods. One of such methods in calculating the weighted average contribution …

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