Short-Term Solvency and Liquidity Short-Term Solvency and Liquidity Short-Term Solvency and Liquidity Short-Term Solvency and

idity Short-Term Solvency and Liquidity Short-Term Solvency and Liquidity Short-Term Solvency and Liquidity

Acid-test Working
Current Working Cash flow Defensive
ratio Capital to
ratio Capital liquidity Internal
or quick total
ratio ratio
ratio assets

Total Quick
Total Current Assets* Working Current Cash + Marketable Quick Assets
Assets Securities + Cash
Total Current Capital Assets less flow from Operating Projected Daily
Total Current Assets Current Activities Operating
Assets Total Assets Expenses
Liabilities Current Liabilities
*Cash + Marketable Securities +
Accounts Receivable

Asset Liquidity and Management Efficiency Asset Liquidity and Management Efficiency Asset Liquidity and Management Efficiency Asset Liquidity and Management Efficiency Asset Liquidity and Management Efficiency Asset Liquidity and Management Efficiency
Inventory Turnover Inventory Turnover Inventory Turnover Inventory Turnover

Trade Average
Collection period Finished Goods in Raw
receivable Merchandise goods materials
or number of process
days’ sales turnover
turnover uncollected inventory turnover turnover
 Net credit
360 days
sales* Receivable turnover Cost of goods Raw materials
Cost of goods sold Cost of goods sold manufactured used
Average Trade or Ave Merchandise Ave Finished Ave Goods-in Ave raw materials
Receivable Accounts Receivable Inventory goods Inventory Process Inventory inventory
(net) Net Sales / 360
*or Net Sales if net credit sales figure
is not available

Asset Liquidity and Management Efficiency Asset Liquidity and Management Efficiency Asset Liquidity and Management Efficiency Asset Liquidity and Management Efficiency Asset Liquidity and Management Efficiency Asset Liquidity and Management Efficiency
Inventory Turnover I

Trade receivable
turnover Working Percent of Current
Days supply Each current Payable Operating
InNet
inventory
credit sales* capital asset to total
assets turnover cycle
Average Trade
Receivable (net)
turnover current assets turnover
*or Net Sales if net credit sales figure
is not available

Asset Liquidity and Management Efficiency

Ave Conversion
Trade receivable Amount of each Cost of sales +
Period of Inventories
360 days
turnover Net sales current asset
Operating Expenses +
Income Taxes + Other
Net purchases
+
Inventory
Net credit sales* Ave Working item Expenses (net) Ave Accounts Ave Collection
(excluding depreciation
turnover
Average Trade Capital Total Current and amortization) Payable Period of Receivable
Receivable (net) +
*or Net Sales if net credit sales figure
Assets Ave Current Assets Days Cash
is not available
Asset Liquidity and Management Efficiency Asset Liquidity and Management Efficiency Asset Liquidity and Management Efficiency Asset Liquidity and Management Efficiency Asset Liquidity and Management Efficiency Long-Term Financial Position or Stability/Leverage

Trade receivable
Free Investments Sales to Capital
Days
turnover
Debt
cash or assets fixed assets intensity
Net credit sales*
cash turnover (plant assets ratio ratio
flow
Average Trade
Receivable (net)
*or Net Sales if net credit sales figure
turnover)
is not available

Asset Liquidity and Management Efficiency

Trade Avereceivable
Cash Net cash from Net Sales
Net Sales Total Assets
Balance
turnover operating activities Ave Total Total Liabilities
Cash Operating – Cash used for Investments Ave Fixed Net Sales
Net credit sales* Total Assets
costs Investing activities or Assets (net)
Average Trade
Receivable ÷ (net) and Dividends Total Assets
360
*or Net Sales if netdays
credit sales figure
is not available

Long-Term Financial
Asset Liquidity Position or Stability/Leverage
and Management Efficiency Long-Term Financial Position or Stability/Leverage Long-Term Financial Position or Stability/Leverage Long-Term Financial Position or Stability/Leverage Long-Term Financial Position or Stability/Leverage Long-Term Financial Position or Stability/Leverage

Trade receivable FIXED BOOK VALUE

DEBT TO FIXED FIXED
EQUITY
turnover
ASSETS TO PER SHARE
EQUITY ASSETS TO ASSETS TO
RATIO
Net credit sales* LONG-TERM OF
RATIO TOTAL TOTAL
Average Trade
LIABILITIES ORDINARY
Receivable (net) EQUITY ASSETS
*or Net Sales if net credit sales figure SHARES
is not available
Long-Term Financial
Asset Liquidity Position or Stability/Leverage
and Management Efficiency Long-Term Financial Position or Stability/Leverage Long-Term Financial Position or Stability/Leverage Long-Term Financial Position or Stability/Leverage Long-Term Financial Position or Stability/Leverage Long-Term Financial Position or Stability/Leverage

Trade receivable
Ordinary
turnover
Total Equity Total Liabilities Fixed Assets (net) Fixed Assets (net) shareholders’ equity
Fixed Assets (net)
Total
Net Assets
credit sales* Total Equity Total Long-term Total Equity Total assets No. of outstanding
Liabilities ordinary shares
Average Trade
Receivable (net)
*or Net Sales if net credit sales figure
is not available

Long-Term Financial
Asset Liquidity Position or Stability/Leverage
and Management Efficiency Long-Term Financial Position or Stability/Leverage
Long-Term Financial Position or Stability/Leverage Profitability and Returns to Investors Profitability and Returns to Investors Profitability and Returns to Investors

Trade receivable Times

Times Times fixed Gross Operating Net profit
turnover preferred
interest
Net credit sales* dividend charges profit profit margin (Rate
margin of return on
Average Trade
earned
Receivable (net)
required earned margin net sales)
*or Net Sales if net credit sales figure
is not available
earned

Asset Liquidity and Management Efficiency

Net Income before

Net receivable
Income Net Income Taxes and Fixed
Trade
before Interest
turnover After Taxes Charges
Gross Profit Operating
and Taxes Preferred
Fixed Charges (Rent +
Profit Net Profit
Net credit sales*
Interest + Sinking Net Sales
Annual AverageInterest Trade Dividends Fund Payment before
Net Sales Net Sales
taxes*)
Receivable (net)
Charges Requirement *Sinking fund payment before taxes =
Sinking fund payment after taxes
*or Net Sales if net credit sales figure
1 – Tax rate
is not available
Profitability andand
Asset Liquidity Returns to Investors
Management Efficiency Profitability and Returns to Investors Profitability and Returns to Investors
Profitability and Returns to Investors

*If there is interest-bearing **May also be computed as follows:

Trade receivable Rate of debt, Rate of return on assets

Cash flow
is computed as follows:
Rate of ROE = Return on Assets
turnover
return on
X
Earnings
margin
Net credit sales* Net Income + return on Equity Multiplier

per share
assets Equity Multiplier =
equity**
[Interest expense (1 – Tax
Average Trade rate)] 1
Receivable (net)
*or Net Sales if net credit sales figure
(ROA)* Average Total Assets Equity Ratio
is not available

Asset Liquidity and Management Efficiency

Cashreceivable
Trade Flow for Net Profit Net Income less
turnover Ave Total Assets Net Income preference
operating dividends
activities
Net credit sales* Alternative Formula: Ave Ordinary requirement
Net Sales
Average Trade Asset Turnover Equity Ave ordinary
Receivable (net) X
shares outstanding
*or Net Sales if net credit sales figure Net Profit Margin
is not available

Profitability and Returns to Investors Profitability and Returns to Investors Profitability and Returns to Investors Profitability and Returns to Investors Profitability and Returns to Investors
Profitability and Returns to Investors

Rate of return Rate of return

Price/earnings
ratio
Dividend Dividend Dividends on average per turnover
Payout Yield per share current of current
assets
assets
 Market Value Annual
Dividends Rate of return
per Share of Dividends Dividends per Net Income
Paid/Declared on Ave Current
Ordinary Shares per share share
Ave Current
Earnings per Market Value per Ordinary Assets
Earnings shares Assets Current Assets
share of share of
Ordinary Shares per share Ordinary Shares outstanding turnover

Cost-Volume Profit Analysis Cost-Volume Profit Analysis for Breakeven Planning Cost-Volume Profit Analysis for Breakeven Planning Cost-Volume Profit Analysis for Breakeven Planning
Cost-Volume Profit Analysis Cost-Volume Profit Analysis for Breakeven Planning

Contribution Break-even
Break-even Weighted
on Margin per Contribution Break-even sales for multi-
Contribution
point products firm
unit or Margin Ratio point (combined Margin per
income per (pesos)
unit
(units) units) unit

Cost-Volume Profit Analysis

Cost-Volume Profit Analysis

Unit Selling Total Fixed Total Fixed Unit CM x No. of

units per Mix
price Contribution Costs Total Fixed Costs Costs +
1 – Variable Costs
-- margin Contribution
Sales
Weighted Ave Unit CM x No. of
units per Mix
Unit variable Margin Contribution
costs Sales Margin
Total number of units
per unit per Sales Mix
Cost-Volume Profit Analysis for Breakeven Planning Cost-Volume Profit Analysis for Revenue and Cost Summary of Variance Analysis to Assess
Cost-Volume Profit Analysis for Breakeven Planning Planning
marketing Effectiveness

Break-even
sales for
multi-products Weighted Sales Net Profit Operating Total Sales
firm CM ratio (units) Leverage Variance
(combined
pesos)

Total Fixed Total Weighted Total Fixed

Net Sales xx Contribution
Costs + Desired
Costs CM (P) Profit
Variable Costs (xx)
Contribution Margin xx
Margin Total actual sales
Less: Total budgeted sales xx
Pxx

Weighted Total Weighted Contribution

Fixed Costs
Net Profit
(xx)
xx
Profit or Net (Unfavorable) Favorable xx

CM ratio Sales (P) Margin Per Unit Operating

Income

Sales Sales Sales Market Market

Sales Mix
Price Volume Quantity Size Share
Variance
Variance Variance Variance Variance Variance
 (Actual total units of all (Actual total units of the
(Number of units sold (Actual sales mix products sold (Actual market share
(Actual selling price percentage for the product –
market –
per unit – – –
Budgeted market share)
Budgeted total sales units
– Number of units in Budgeted sales mix of all products)
Budgeted total units of X
the master budget) percentage for the product) X the market) Actual total units of the
Budgeted selling X X
X Budgeted sales mix industry
price per unit) Actual units of all products percentage of the product Budgeted market share
Budgeted contribution X
X sold X X
Weighted-ave. budgeted
Actual number of margin per unit X Budgeted contribution Weighted-ave. budgeted
Budgeted unit contribution margin per unit of the contribution margin per contribution margin per
units sold margin of the product product unit
unit

The High-Low Method The High-Low Method Regression Analysis Method Correlation Analysis
The High-Low Method
Y = costs to be predicted
(dependent variable)
Simple regression X, X1, X2, … = independent variables

Variable
on which the prediction

Fixed Fixed analysis Coefficient of

is to be based
a = fixed cost

cost rate determination

b, b1, b2, … = estimated coefficients of
the regression model

Cost Cost
u = residual term that
Multiple includes the net effect of
or r2
or per unit regression
other factors not in the
model and
measurement errors in
analysis the dependent and
independent variables

The High-Low Method

The High-Low Method

Total Cost at lowest 1 --

Total Cost at highest activity [(Estimated conditional
activity Y = a + bX
Cost at highest activity – – standard deviation
Cost at lowest activity – [Variable cost per measured from line of
Highest activity – [Variable cost per unit unit regression)2
X Y = a + b1X1 + b2X2 ….. + u (Standard deviation
Lowest activity X
Highest activity stated measured from the
in units] Lowest activity average of all data)2]
stated in units]
 Estimated Standard
conditional
standard deviation Return Return Return Sales
deviation measured on on on Price
measured from
from average Investment Investment Investment
the line of
regression of all data Variance

√ Operating Profit (Actual Sales

∑(Y −Y )2 Net Operating
ത
∑(𝐘 − 𝒀 )𝟐 n Net Operating Income Margin Price
ඨ Income Sales –
𝑛 − 2 Y = actual cost
X
Y = average cost
Average X Master Budget
n = number of items of data
Asset Turnover Sales Price)
Y = actual cost Operating Sales
X
ഥ= line of regression cost
𝐘
assets Average operating (Return on
n = number of items of data
asset Sales) Actual Unit Sales

Minimum Transfer Price Operating Performance Evaluation Operating Performance Evaluation

Analysis of Variances Analysis of Variances

Sales *Master budget average

contribution margin per Sales
Volume
unit
=
Master budget Mix Transfer Price Efficiency
Total contribution margin
Price Variance Variance
Variance Master budget sales
Variance
 (Actual Unit Sales (Flexible Budget (Actual quantity of
**Flexible budget Average Contribution Differential costs per (Actual unit price of
– average contribution unit input input
Margin per unit***
Master Budget Unit margin per unit – + – –
Sales) = Master Budgeted Lost contribution Standard unit price Standard quantity of
Flexible budget
X Total contribution margin
Average Contribution margin per unit on of input) input)
Master Budget Ave. Margin per unit) X
Actual unit sales outside sales (or X
X
Contribution Margin Actual Unit Sales margin opportunity costs per Actual quantity of Actual unit price of
per unit* of the product unit) input input

Alternative Presentation: Alternative Presentation:

Alternative Presentation: Alternative Presentation:

Direct Direct
Materials
Materials Materials Materials Materials Labor
Variance Price Quantity Mix Yield Variance
Analysis Variance Variance Variance Variance Analysis

Actual Price Pxx

Less: Standard Price xx Actual Quantity Pxx
Unfavorable (Favorable) Pxx Less: Standard Quantity xx Actual Quantity x Standard Price
Unfavorable (Favorable) Pxx Actual Input Ave
X Actual Quantity Purchased* xx (per material) Pxx
X Standard Price xx Standard Price Pxx
Unfavorable (Favorable) Pxx Less: Total Actual Input x Average
Unfavorable (Favorable) Pxx Less: Total ActualInput x Ave
Standard Price xx Standard Price (per material) xx
*or Actual quantity used if quantity Unfavorable (Favorable) Pxx Unfavorable (Favorable) Pxx
purchased is not known *or Actual quantity used if quantity
purchased is not known
 Alternative Presentation: Alternative Presentation:
Alternative Presentation: Factory Overhead Variance Analysis

Labor Labor Labor Labor Variable Variable

Efficiency Efficiency Manufacturing Overhead
Rate
or Time
Yield Overhead Spending
Variance Variance Variance
Variance Variance

Actual Labor rate Pxx

Less: Standard labor rate xx Actual hours Pxx Actual hours x Standard labor rate Pxx SHAI x Standard labor rate Pxx Actual Variable OH Pxx
Unfavorable (Favorable) Pxx Less: Standard hours xx Less: Standard hours based on Less: Standard hours based on Less: Actual Hours x Standards
X Actual hours xx Unfavorable (Favorable) Pxx actual input (SHAI) x Standard actual input (SHAI) x Standard variable OH rate xx
Unfavorable (Favorable) Pxx labor rate xx labor rate xx
X Standard labor rate xx Unfavorable (Favorable) Pxx
Unfavorable (Favorable) Pxx
Unfavorable (Favorable) Pxx
Unfavorable (Favorable) Pxx

Combined manufacturing Overhead (Variable and Combined manufacturing Overhead (Variable and Combined manufacturing Overhead (Variable and
Alternative Presentation: Combined manufacturing Overhead (Variable and Combined manufacturing Overhead (Variable and
Fixed) Variance Analysis Fixed) Variance Analysis Fixed) Variance Analysis
Fixed) Variance Analysis Fixed) Variance Analysis
(flexible budget) (flexible budget) (flexible budget)
(flexible budget) (flexible budget)

Variable Under **Budgeted

Under *Budgeted
Under the allowed
Overhead Two-Variance
the
the allowed
Three - based on
Efficiency Method Four -Variance based on Standard
Variance
Variance Method Actual Hours Hours
Method
 Controllable Variance
Actual Manufacturing OH
Less: Budget allowed based on
Std. hours
Fixed (at normal capacity) Pxx
Actual hours Pxx Variable (Std. Hours*
Less: Standard hours xx x Variable OH rate) xx xx
Unfavorable (Favorable) Pxx Unfavorable (Favorable)
X Standard VOR xx Capacity Variance
Unfavorable (Favorable) Pxx Budgeted allowed based on
Std. Hours
Spending Variance Spending Variance
Pxx Actual Manufacturing Overhead Pxx Actual Manufacturing Overhead Pxx
Less: Budget allowed on Actual hours Less: Budget allowed on actual hours xx
Fixed (at normal capacity) Pxx Unfavorable (Favorable) xx
Variable (Actual hours
[Fixed Overhead [Fixed Overhead
x Variable OH rate) xx xx
Unfavorable (Favorable) xx Variable Efficiency Variance
Budgeted allowed on actual hours Pxx
+ +
Less: Budget allowed on standard hours xx
xx Variable Efficiency Variance Unfavorable (Favorable) xx
Budgeted allowed on Actual Hours Pxx Fixed Efficiency or Effectiveness Variance
Pxx
Less: Budget allowed on Standard hours
Fixed (at normal capacity)
Variable (Standard hours
Pxx
Standard hours
Less: Actual hours
Unfavorable (Favorable)
Pxx

xx
xx (AH x Std. VOR)] (SH x Std. VOR)]
x Variable OH rate) xx xx X Fixed Overhead rate xx
Less: Std Hrs x Std OH rate xx Unfavorable (Favorable) xx (Favorable) Unfavorable xx
Unfavorable (Favorable) xx Volume Variance Idle Capacity Variance
Budgeted allowed on standard hours Pxx Normal capacity hours Pxx
Total Manufacturing OH variance Pxx Less: Standard hours x Standard OH rate xx Less: Actual hours xx
*Standard hours = Unfavorable (Favorable) xx Unfavorable (Favorable) xx
Equivalent Production or Allowed hours based on actual production x
Standard hours per unit.
X Fixed Overhead rate xx
Total Overhead variance Pxx (Favorable) Unfavorable xx

Combined manufacturing Overhead (Variable and Combined manufacturing Overhead (Variable and
Combined manufacturing Overhead (Variable and Fixed) Variance Analysis Fixed) Variance Analysis
Fixed) Variance Analysis

Variation
(fixed or static budget) (fixed or static budget)
(flexible budget)

Expected Standard
*** Along
Under the Under the
Two -Variance Three - Activity Deviation
Method Variance (σ) a Path
May also be analyzed using
the following presentation: Time of activity time (σ path)
Method

Spending variance
Actual Overhead Costs
Less: Budget allowed based
Pxx Budget Variance
Actual Manufacturing OH Pxx
Budget Variance
Actual Manufacturing Overhead Pxx
te =
on Actual hours xx Less: Budget Overhead xx
Less: Budget Overhead Unfavorable (Favorable) xx
Unfavorable (Favorable) Pxx
(at normal capacity) xx
Capacity Variance
Budget allowed based Unfavorable (Favorable) xx
Capacity Variance to + 4 tm +tp Pessimistic Estimate
on Actual hours Pxx Capacity Variance Budgeted hours x Std OH rate Pxx
– √ ∑ Deviations2
6
Less: Actual hours x SOR xx Less: Actual hours x Std OH rate xx
Budgeted Overhead Pxx Unfavorable (Favorable) xx
Unfavorable (Favorable) Pxx Less: Standard or Applied OH
Efficiency (Fixed and Variable) (Std hours x Std OH rate) xx
Efficiency Variance
Actual hours x Std OH rate Pxx Optimistic Estimate
Actual hours x SOR Pxx Unfavorable (Favorable) xx Less: Std hours x Std OH rate xx

6
Unfavorable (Favorable) xx
Less: Standard hours x SOR xx
Unfavorable (Favorable) Pxx Net Unfavorable (Favorable) te = expected time
variance Pxx Net Unfavorable (Favorable) Variance Pxx to = optimistic time estimate
Net Unfavorable (Favorable) tm = most likely time estimate
Variance Pxx
tp = pessimistic time estimate
 Economic ELS Annual
Order [optimal (least cost)
Annual Reorder Average
Quantity production or
economic production
Ordering Carrying Point lead time
(EOQ
Q*)
run (lot) size]
Costs Costs (ROP) usage

Average lead Lead time

Order ¿ ¿ 2 x Carrying costs per unit ¿time usage
x
√ √
2 x Annual usage (units ) x Costs per
Carryingcost per unit
Annual usage (units ) x Set−up
2 xorder
Carrying cost per unit
costsUsage (demand)
Annual
EOQ
x Cost per order
+ Average
safety stock usage per
unit of time

CAPITAL BUDGETING DECISIONS

COST-PLUS
Shut COST-PLUS
PRICING
COST-PLUS
PRICING TARGET NET CASH
down PRICING (Absorption Approach) (Contribution Approach) COSTING RETURNS
Target selling price MARKUP PERCENTAGE MARKUP PERCENTAGE

point ABSORPTION COST ABSORPTION COST

 Annual incremental revenue from
(Fixed Costs if the project
operations are Desired return on assets Less: Incremental cash operating
employed – SGA Desired return on assets costs
continued Expenses employed – Fixed Costs
[Cost + (Markup Anticipated Selling Price = Annual cash inflow before
– ---------------------------------- --------------------------------
- taxes
Percentage X Cost)] Volume in units
Shut down costs) Volume in units Desired profit Less: Taxes
X X [ Tax rate (Annual cash inflow
Unit manufacturing costs Unit Variable Costs before taxes – Depreciation)]
Contribution Margin
= Annual net cash inflow after
per unit taxes
or

Annual incremental revenue from the CAPITAL BUDGETING DECISIONS CAPITAL BUDGETING DECISIONS CAPITAL BUDGETING DECISIONS CAPITAL BUDGETING DECISIONS

project Annual cash operating costs (if the old asset

Less: Incremental cash operating or method is used)
Less: COST OF ORDINARY SHARES:
costs
Annual cash operating costs (if the new

STOCK
asset or method is used)
= Annual cash inflow before taxes
NET CASH COST OF
Less: Incremental depreciation
RETURNS
= Cash savings before taxes
Less: Incremental depreciation COST OF PREFERENCE PRICE-BASED
= Net Income before taxes
Less: Income Taxes (Form of cash savings) = Increase in income before taxes
Less: Income Taxes DEBT SHARES
= Net income after taxes = Increase in income after taxes
Add: Incremental Depreciation Add: Incremental Depreciation

= Annual net cash inflow after taxes = Net Cash savings after taxes

Annual cash operating costs (if

the old asset or method is used)
Less: Expected Cash Dividends
Taxes Dividends per share per share
[Tax rate (Annual Cash inflow Interest rate -----------------------------------
before taxes – Incremental ----------------------------
X Current price per share of
Depreciation)]
(1 – Corporate Tax rate) Market value per share Ordinary Shares
of Preference Shares +
= Annual cash savings after
taxes Dividend growth rate
or
CAPITAL BUDGETING DECISIONS CAPITAL BUDGETING DECISIONS

COST F ORDINARY SHARES:

ACCOUNTING ACCOUNTING
BOOK-VALUE COST OF RATE OF RATE OF
BASED RETAINED RETURN AVERAGE PAYBACK
RETURN INVESTMENT RECIPROCAL
EARNINGS (ARR) (ARR)
If a cost reduction project
This is used when dividend growth is involved
rate is unknown

Annual Cash Inflows

Cost savings -----------------------------
Initial investment
Next year’s Projected Average Annual Net - Net Investment
+
Earnings per share Income Depreciation on new
Salvage value of the
------------------------------ ------------------------------ equipment or
asset at the end of
Current price per share Initial Investment or -----------------------------
economic life 1
of Ordinary Shares Average Investment Initial Investment or
------------------------------ ----------------------
Average Investment
2 Payback Period

ECONOMIC PERFORMANCE OF ORGANIZATION ECONOMIC PERFORMANCE OF ORGANIZATION ECONOMIC PERFORMANCE OF ORGANIZATION ECONOMIC PERFORMANCE OF ORGANIZATION
SUB-UNITS SUB-UNITS SUB-UNITS SUB-UNITS

PROFITABILITY MANUFACTURING RETURN ON RESIDUAL ECONOMIC RETURN ON

CYCLE VALUE ADDED
INDEX INVESTMENT INCOME (RI) SALES (ROS)
EFFICIENCY
(ROI) (EVA)
 Income After tax operating income
-------------------- Input –
Value-added time
PV of Cash Inflows Investment – [ Weighted Average Cost Operating Income
----------------------------
------------------------------ or (Required rate of return of Capital -------------------------
Throughput
PV of Net Investment Investment turnover X X Sales
(manufacturing cycle) time
X Investment) (Total Assets – Total
Return on sales Liabilities)]

PRODUCTIVITY AND MARKETING EFFECTIVESNESS PRODUCTIVITY AND MARKETING EFFECTIVESNESS PRODUCTIVITY AND MARKETING EFFECTIVESNESS PRODUCTIVITY AND MARKETING EFFECTIVESNESS PRODUCTIVITY AND MARKETING EFFECTIVESNESS PRODUCTIVITY AND MARKETING EFFECTIVESNESS

OPERATIONAL FINANCIAL WORKFORCE OUTPUT PER OUTPUT PER

PRODUCTIVITY PRODUCTIVITY PERSON
PRODUCTIVITY PRODUCTIVITY LABOR - HOUR
EMPLOYED

Output Output units P output Output Output Output

--------------- ---------------------- ------------------ ------------------------ -------------------------- ------------------------
Input Input units P input Input of materials Input of labor hours No. of labor force
PRODUCTIVITY AND MARKETING EFFECTIVESNESS PRODUCTIVITY AND MARKETING EFFECTIVESNESS TIME VALUE OF MONEY CONCEPTS TIME VALUE OF MONEY CONCEPTS
TIME VALUE OF MONEY CONCEPTS
PRODUCTIVITY AND MARKETING EFFECTIVESNESS

FUTURE
PRESENT VALUE OF AN
PROCESS PARTIAL TOTAL FUTURE
VALUE (PV) ORDINARY
(ACTIVITY) PRODUCTIVITY PRODUCTIVITY VALUE (FV)
OF P1 ANNUITY
PRODUCTIVITY OF P1
(FVA)
OF P1

Number of units or
value or output Unit or Sales Value of
Output manufactured Output FV: PV: FVA:
---------------------------- --------------------------- -----------------------------
Number of units or cost Total Cost of all Input P 1¿ P1 ¿¿
Machine hours used
of a single or part of the ¿¿
Resources
input resources

TIME VALUE OF MONEY CONCEPTS TIME VALUE OF MONEY CONCEPTS TIME VALUE OF MONEY CONCEPTS

PRESENT
PVA: FUTURE FVAD: PRESENT
VALUE OF AN
VALUE OF AN VALUE OF AN PVAD:
ORDINARY 1 ¿
1−
¿¿
¿ ANNUITY DUE ANNUITY DUE ¿
ANNUITY
VALUE (FVAD) VALUE (PVAD)
(PVA)
OF P1 OF P1
OF P1