Responsibility Accounting and Performance

Measurement

Use with Management and Cost Accounting 10e

by Colin Drury ISBN 9781473748873
© 2018 Colin Drury
 Financial Performance

• Financial performance measures are

commonly used to assess the
performance of profit centres and
investment centres.

Use with Management and Cost Accounting 10e

by Colin Drury ISBN 9781473748873
© 2018 Colin Drury
 Return on Investment (ROI)

• ROI
Financial measure calculated as profit divided
by invested capital.
• Invested capital
The assets that the investment centre has
available to generate profit.

Use with Management and Cost Accounting 10e

by Colin Drury ISBN 9781473748873
© 2018 Colin Drury
 Return on Investment (ROI)

• Formula:
ROI= Profit
Invested capital

Use with Management and Cost Accounting 10e

by Colin Drury ISBN 9781473748873
© 2018 Colin Drury
Return on Investment (ROI)

Use with Management and Cost Accounting 10e

by Colin Drury ISBN 9781473748873
© 2018 Colin Drury
Return on Investment (ROI)

Use with Management and Cost Accounting 10e

by Colin Drury ISBN 9781473748873
© 2018 Colin Drury
 Balanced Scorecard (BSC)
• A tool that translates an organisation’s
mission, objectives and strategies into
performance measures for each key
strategic area of the business.
• Used to implement strategy and to
monitor and manage organisational
performance.

(cont.)
Use with Management and Cost Accounting 10e
by Colin Drury ISBN 9781473748873
© 2018 Colin Drury
 The Four Perspectives
of the BSC
• Financial perspective

• Customer perspective

• Internal business processes

• Learning and growth

Use with Management and Cost Accounting 10e

by Colin Drury ISBN 9781473748873
© 2018 Colin Drury
Balanced Scorecard

Use with Management and Cost Accounting 10e

by Colin Drury ISBN 9781473748873
© 2018 Colin Drury