Concepts of Management Control
The systematic process of regulating organizational activities
What is Organizational Control?
The financial statement that shows the company’s financial position with respect to its assets and liabilities
What is the Balance Sheet?
The continuous process of measuring products, services, and practices against major competitors or industry leaders
What is Benchmarking?
Lenders to organizations typically want high or low Leverage/Debt Ratios (High/Low)
What is Low Debt Ratios?
The step in the risk management process that identifies the odds of the risk occurring
What is Risk Analysis?
The comprehensive management control system that balances traditional financial measures with measures of the 4 major perspectives
What is the Balanced Scorecard?
Type of budgeting involved when lower-level managers anticipate their departments’ resource needs and pass them to top management for approval
What is Bottom-up Budgeting?
The system that measures the stock market’s estimate of the value of a company’s past and expected capital investment projects
What is Market Value Added?
The type of profitability ratio that compares net income to sales
What is Profit on margin = Net income/Sales?
Traditionally, this was defined as the ways of which the organization safeguards the interests of its shareholders
What is Corporate Governance?
The 4 major perspectives of the Balanced Scorecard
What are financial performance, customer service, business process, and potential for learning and growth?
The type of budget that determines the forecasted and actual revenues of the organization
What is Revenue Budget?
Decentralized approach towards an organization-wide commitment to infusing quality into every activity through continuous improvement
What is Total Quality Management?
A set of standards that represent an international consensus of what consists effective quality management, as outlined by the International Organization Standardization
What are the 1S0 9000 Standards?
Risk management is the process of _______, assessing, and controlling threats to the organization
What is Identifying?
Perspective of the Balanced Scorecard that measures how well resources and human capital are being managed for the company’s future
What is Learning and Growth?
This is derived when you divide total sales by average inventory
What is Inventory Turnover?
The quality control approach that emphasizes a disciplined and relentless pursuit of higher quality and lower costs
What is Six Sigma?
The measurement utilized by companies to track its internal performance with regard to key activities as defined by management
What are Activity Ratios?
This step in the risk management process has organizations assess their risks and develop plans to control these risks
What is Risk Mitigation?
The step in the feedback control model that involves managers determining what changes are needed to improve performance of the team
What is the Take Corrective Action step?
The summary of financial performance at a given time interval (usually one year)
What is Income Statement?
The company’s MVA is greater than the capital invested by shareholders, bond holders, and retained earnings, the company has a ______ MVA
What is Positive MVA?
The two numbers that you need to calculate for Current Ratios under Liquidity Ratios
What are Current Assets and Current Liabilities?
Governance ensures the company has accountability, fairness, and ________ with its stakeholders
What is Transparency?