Techniques of contolling 

Presented by 
Alan benedict khakha
Abhinav kumar
Financial control 

• Budget summaries- A budget summary is resume of all individual budgets of

the organisation. It overall business loans and identifies limitations and
deficiencies.
• Profit and loss control- This is the most widely used means of control of
overall performance of an enterprise. The profit and loss statement shows
all the revenue, expenses and income for a given period.
• Return on investment- Rate of return on investment is regarded as a useful
technique of control to evaluate the relative as well as absolute success of a
business enterprise. It determine the ratio of earnings of the enterprise to
its investment.
ROI=E/I
The advantages of ROI are as follows:
• It focuses attention on profits and relates them to the most important
stake in the company i.e., capital invested.
• It indicates how effectively resources are being employed
• It helps in locating areas where capital is being fruitfully utilised and in
planning future operations accordingly.
• Rate of return on investment is used to compare the performance of
a company over the years.
Limitations of this technique are as follows:

• It may be troublesome to compile information on sales, costs, assets,

and investment of the products produced and sold.
• Excessive emphasis on ROI may lead to neglect of other
important variables like technological advance and
morale of employees.
• Because of inflation, there is appreciation in the value
of various assets.
• Rate of return on investment may tend to encourage conservation
and discourage risk taking in the long run.
Ratio analysis

• Ratio analysis is the process of analyzing  the relationship between

two sets of figures relating to two important aspects of the company.
A ratio may be financial or non-financial. Financial ratios are
calculated from the financial accounts of the firm such as current
ratio.