WHAT IS MODERN TECHNIQUES ?
1. Financial Statement
Analysis: Financial
statements are a means of managerial control. They can be used by the
management for measuring and controlling the profitability, liquidity and the
financial position of the business. By comparing the financial statement of the
current year with those of the previous years and also by comparing the
financial statement of their concern with those of other concerns engaged in
the same industry.
2. Return on Investment
Control: Profits are
the measure of overall efficiency of business. Profit earned in relation to the
capital employed in a business is an important control device. ROI is used to
measure the overall efficiency of a concern. It reveals how well the resources
of a concern are used, higher the return better are the results.
3. Management Information
System (MIS): Management
Information System (MIS) is an approach of providing timely, adequate and
accurate information to the right person in the organisation which helps in
taking right decisions.
4. Management Audit: Management audit is an investigation by an
independent organisation to find out whether the management is carried out most
effectively or not. In case there are drawbacks at any level then
recommendations should be given to improve managerial efficiency.
5. Zero-Base Budgeting (ZBB): In the words of Peter A Pyher, “Zero-base
budgeting is a planning and budgeting process which requires each manager to
justify his entire budget request in detail from scratch and shifts the burden
of proof to each manager to justify why he should spend money at all. The
approach requires that all activities be analysed in ‘decision packages’ which
are evaluated by systematic analysis and ranked in order of importance”.
From his definition, it is clear that
Zero-base budgeting is a technique of preparing the budget in which the
previous year is not taken as the base, and every year is taken as a new year
for preparing the current year’s budget.
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