Ashish Singh Himanshu Pandey

BY

TRADITIONAL NONBUDGETARY CONTROL DEVICES

BALANCED SCORECARD

BUDGETING

BENCHMARKING

MANAGEMENT AUDIT

CONTROL TECHNIQUES

COST COTROL

PERT FINANCIAL RATIO ANALYSIS GANTT CHART

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CRITICAL PATH METHOD

BUDGETING: THE FORMULATION OF PLANS FOR A GIVEN FUTURE PERIOD IN NUMERICAL TERMS.ITS A STATEMENT WHICH HELP US TO KNOW THE FUTURE RESULTS AND TO ACHIEVE THESE RESULTS HOW MUCH WE WILL HAVE TO SPEND. EXAMPLES: CASH BUDGET, FINANCIAL BUDGET, PRODUCTION BUDGET WHICH ARE PREPARED BY AN ORGANISATION.

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BUDGETING FOCUSES ON STANDARD AND OBJECTIVES. BUDGET HELPS SUBORDINATE TO COMPARE THERE PERFORMANCE WITH BUDGETARY STANDARDS AND CAN DO SELF APPRAISAL. THROUGH BUDGETING MANAGER CAN ALLOCATE RESOURCES TO DEPARTMENTS ACCORDING TO THEIR BUDGETARY ALLOCATION. BUDGET HELPS TO IMPROVE COORDINATION BETWEEN VARIOUS DEPARTMEMNTS . AS BUDGET OF ONE DEPARTMENT DEPENDS ON OTHER. BUDGET PROVIDES STANDARD TO BE ACHIEVED.
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2.

3.

4.

5.

SPECIAL REPORTS AND STATISTICAL REPORT PERSONAL OBSERVATION SUCH AS BY WALKING AROUND BREAK EVEN ANALYSIS

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BREAK-EVEN POINT IS DEFINED AS THAT LEVEL OF VOLUME AT WHICH REVENUE EXACTLY EQUALS TO THE TOTAL COST. THROUHGH A GRAPHIC REPRESENTATIONTHE BREAK-EVEN POINT PROVIDES A POINT OF CAPACITY WHERE OPERATIONS PASS FROM BEING PROFITABLE TO A LOSS OR VICE-VERSA. THIS HELPS MANAGEMENT IN DECIDING THE LEVEL OF OUTPUT AND SALES.

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EXAMINES THE RELATIONSHIP BETWEEN SPECIFIC FIGURES ON THE FINANCIAL STATEMENTS AND HELPS TO EXPLAIN THE SIGNIFICANCE OF THESE FIGURES.
1. LIQUIDITY RATIO 2 . PROFITABILITY RATIO 3. DEBT RATIO 4. ACTIVITY RATIO

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LIQUIDITY RATIO

1)

CURRENT RATIO

CURRENT ASSETS CURRENT LIABILITIES C.A- INVENTORIES C.L TOTAL DEBT TOTAL ASSETS

2)

ACID TEST

LEVERAGE RATIO

1)

DEBT TO ASSETS

2)

TIMES INT. EARNED INVENTORY TURNOVER TOTAL ASSETS TURNOVER

PBIT TOTAL INT. CHARES

SALES INVENTORY SALES T.A

ACTIVITY RATIO

1)

2)

PROFATABILITY RATIO

1)

PROFIT MARGIN ON SALES ROI

NPAT TOTAL ASSETS NPAT TOTAL ASSETS

2)

COST CONTROL- COST CONTROL IS APPLIED MAINLY BY BIG MANUFACTURING COMPANY, HOTELS ETC TO HAVE STRICT CONTROL OVER COST AND REDUCE PER UNIT COST. THE OTHER OBJECTIVES OF THE COST CONTROL INCLUDE: 1. ACCURATELY ASSERTING PER UNIT, PER PROCESS AND PER DEPARTMENT COST.
2.

DETERMINING SOURCES OF WASTAGE RELATED TO LABOUR AND MATERIALS.

3.

ON THE BASIS OF STANDARD COST FIGURES, ESTIMATING THE COST OF PROPOSED PRODUCTION .

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4.

PREPARING COMPARATIVE COST FIGURES OF REPLACEABLE MATERIALS, MACHINES OR LABOUR. COMPARING FINANCIAL FIGURES WITH COST FIGURES.

5.

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BENCHMARKING- THE SEARCH FOR THE BEST PRACTICES AMONG COMPETITORS OR NONCOMPETITIVES THAT LEAD TO THEIR SUPERIOR PERFORMANCE.
BENCHMARK- THE STANDARD OF EXCELLENCE AGAINST WHICH TO MEASURE AND COMPARE. THE METHODOLOGY ADOPTED IS AS UNDER:
1.

IDENTIFY THE PROBLEM AREAS.

IDENTIFY OTHER INDUSTRIES.

2.

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3.

IDENTIFY ORGANISATIONS WHO ARE LEADERS IN THESE AREAS.

4.

SURVEY COMPANIES FOR MEASURES AND PRACTICES.

VISIT THE BEST PRACTICE COMPANIES TO IDENTIFY LEADING EDGE PRACTICES. IMPLEMENT NEW AND IMPROVED BUSINESS PRACTICES.

5.

6.

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THIS CONTROL TECHNIQUE HELPS TO MEASURE THE EFFICIENCY LEVEL OF MANAGERS . IT IS A COMPREHENSIVE AND CONSTRUCTIVE REVIEW OF THE PERFORMANCE OF MANAGE MENT TEAM OF ANY ORGANISATION. MANAGERS PERFORM VARIOUS FUNCTIONS SUCH AS PLANNING , ORGANISING , STAFFING , DIRECTING AND CONTROLLING ETC. THE MAIN PURPOSE OF MANAGEMENT AUDIT IS TO SEE THAT THESE FUNCTIONS ARE PERFORMED EFFICIENTLY AND EFFECTIVELY.

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IT REVIEW OVERALL PLAN AND POLICIES OF MANAGER.

IT HELPS TO LOCATE PRESENT AND FUTURE DEFICIENCY IN PERFORMANCE OF MANAGEMENT FUNCTIONS. IT WOULD HIGHLIGHT POSSIBLE OPPORTUNITIES FOR THE ORGANISATION. IT WOULD DETERMINE WHETHER OR NOT ORGANISATION IS WORKING EFFICIENTLY.

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THERE IS NO STANDARD TECHNIQUE OF MANAGEMENT AUDIT. IT IS NOT COMPULSORY BY LAW LIKE FINANCIAL AUDIT. THERE IS SHORTAGE OF QUALIFIED MANAGEMENT AUDITORS. THE SCOPE AND CONTENTS OF MANAGEMENT VARY FROM FIRM TO FIRM.

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1.
2. 3. 4. 5.

DEVELOPED BY M.R. WALKER OF USA IN 1956. IT DITERMINES THE CRITICAL ACTIVITIES OF COMPLEATION OF THE PROJECT AND SEQUENSE OF ACTIVITIES OF OPTIMISING THE USE OF TIME AND RESOURCES. PROCEDUREBREAK DOWN THE PROJECT INTO VARIOUS ACTIVITIES SYSTEMATICALLY. NUMBER ALL THE EVENTS AND ACTIVITIES. CALCULATE THE EARLIEST START TIME, EARLIER FINISH TIME, LATEST START TIME AND LATEST FINISH TIME. IDENTIFY THE CRITICAL ACTIVITIES AND IN THE CHART CONNECT THEM WITH DOUBLE LINE ARROW. CALCULATE TOTAL DURATION OF PROJECT.

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4 9 6 4 1 2 2 3 3 6

5 2 5 7 7 10 8

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HIGHLIGHTS THE CRITICAL ACTIVITIES.

PROVIDES A TECHNIQUE OF PLANNING AND SCHEDULING. GIVES COMPLETE INFORMATION OF ACTIVITY. HELPS TO IDENTIFY POTENTIAL BOTTLENECKS.

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BALANCED SCORECARD- A PERFORMANCE MEASUREMENT TO THAT LOOKS AT FOUR AREAS- FINANCIAL, CUSTOMER, INTERNAL PROCESSES, AND PEOPLE/INNOVATION/GROWTH ASSETS-THAT CONTRIBUTES TO A COMPANYS PERFORMANCE.

FINANCIAL PERSPECTIVE

CUSTOMER PERSPECTIVE

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INTERNAL PROCESS PERSPECTIVE

INNOVATION AND LEARNING PERSPECTIVE.

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THIS CHART SYSTEM WAS DEVELOPED BY HENRY L. GANTT.

GANTT CHART- A BAR CHART THAT SHOWS THE TIME RELATIONSHIPS BETWEEN THE EVENTS OF A PRODUCTION PROGRAM. IT VISUALY SHOWS WHEN TASK ARE SUPPOSED TO BE DONE AND COMPARE THAT WITH ACTUAL PROGRESS ON EACH. IT LETS MANAGERS EASILY DETAIL WHAT HAS YET TO BE DONE TO COMPLETE A JOB OR PROJECT AND TO ASSESS WHETHER THE ACTIVITY IS AHEAD OF,BEHIND OR ON SCHEDULE.
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PERT- A TIME EVENT NETWORK ANALYSIS SYSTEM IN WHICH THE VARIOUS EVENTS IN A PROJECT OR PROGRAM ARE IDENTIFIED WITH A PLANNED TIME ESTABLISHED FOR EACH.
METHODOLOGY PREPARATION OF THE NETWORK . NETWORK ANALYSIS. SCHEDULING. TIME COST TRADE OFFS. RESOURCE ALLOCATION. PROJECT CONTROL.

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FORCES MANAGER TO PLAN.

FORCES PLANNING ALL THE WAY DOWN THE LINE. CONCENTRATES ATTENTION ON CRITICAL ELEMENT THAT MAY NEED CORRECTION. MAKES POSSIBLE A KIND OF FORWARD LOOKING CONTROL.

ENABLES MANAGERS TO AIM REPORTS AND PRESSURE FOR ACTION AT THE RIGHT SPOT AND LEVEL IN THE ORGANISATION STRUCTURE AT THE RIGHT TIME.

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TECHNIQUE IS NOT USEFUL WHEN THE PROGRAM IS NEBULOUS AND NO REASONABLE ESTIMATES OF SCHEDULE CAN BE MADE.
PERT HAS ITS EMPHASIS ONLY ON TIME AND NOT COST. NOT PRACTICABLE FOR ROUTINE PLANNING OF RECURRING ACTIVITIES.

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PLANNING IS SUICIDAL WITHOUT CONTROL AND VICEVERSA. ORGANISATIONS USE VARIOUS TOOLS FOR CONTROLLING. HOWEVER APPLICATION OF THESE CONTROL TECHNIQUES DEPEND ON SITUATION AND REQUIREMENTS OF THE ORGANISATION.

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