Akuntansi Manajemen_Pengukuran Kinerja Pusat Investasi_ROI, Residual Income, &EVA.

Summary

This presentation by Catur Sasongko covers key concepts in management accounting, specifically performance measurement through Return on Investment (ROI), Residual Income (RI), and Economic Value Added (EVA). It explains how companies can organize their responsibility centers into cost, profit, and investment centers, highlighting how each center's performance is evaluated. The presentation dives into calculating ROI, breaking down its components (margin and turnover), and explores the advantages and limitations of ROI, RI, and EVA as tools for measuring managerial performance. For further learning and exercises, the audience is encouraged to visit the e-learning platform mentioned.

Takeaways

• 😀 The presentation discusses performance measurement in management accounting, focusing on Return on Investment (ROI), Residual Income, and Economic Value Added (EVA).
• 📈 ROI is calculated as operating profit divided by the average operating assets, indicating how efficiently a company is using its assets to generate profit.
• 💹 Residual Income is the operating profit before tax minus a minimum required rate of return on assets, showing the performance of a company or unit beyond the minimum return expected by the company.
• 🏦 EVA measures a company's financial performance by subtracting the cost of capital from the operating profit after tax, rewarding companies that earn more than their cost of capital.
• 📊 The script explains that a higher ROI indicates better performance of an investment center within a company.
• 📉 The concept of 'responsibility centers' in a company is introduced, including cost centers, profit centers, and investment centers, each with different performance measurement criteria.
• 🔑 Managers are often held responsible only for controllable costs, which are those that they can influence with their decisions.
• 🚫 A potential issue with ROI is that managers may reject projects that could decrease their unit's ROI, even if those projects are beneficial for the company as a whole.
• ✅ Residual Income encourages managers to accept projects that increase the company's overall profit, as long as the projects yield a positive residual income.
• 💼 The script highlights that EVA considers both the cost of debt and equity, taking into account taxes, to provide a more comprehensive measure of a company's financial performance.
• 🌐 For a comprehensive understanding and practice, the presenter suggests visiting e-learning platforms for management accounting exercises and discussions.

Q & A

What is the main topic of the presentation?

The main topic of the presentation is performance measurement in management accounting, specifically covering Return on Investment (ROI), Residual Income (RI), and Economic Value Added (EVA).

What are the three types of responsibility centers mentioned in the script?

The three types of responsibility centers mentioned are Cost Centers, Profit Centers, and Investment Centers.

How is performance measured in a Cost Center?

Performance in a Cost Center is measured by comparing the actual costs incurred with the budgeted costs, with the goal of operating as efficiently as possible.

What is the primary responsibility of a manager in a Profit Center?

The manager of a Profit Center is responsible for both revenue and costs, with the goal of maximizing profits by increasing revenue while minimizing expenses.

How does the role of an Investment Center manager differ from that of a Profit Center manager?

An Investment Center manager is responsible not only for revenues and costs but also for managing the unit's investments and assets efficiently to maximize returns.

What is the formula for calculating Return on Investment (ROI)?

ROI is calculated as operating income divided by average operating assets.

How can a company improve its ROI according to the script?

A company can improve its ROI by increasing its profit margin (operating income as a percentage of sales) and by increasing the asset turnover (revenue divided by average operating assets).

What is Residual Income (RI) and how is it calculated?

Residual Income (RI) is the operating income minus a required return on the company's average operating assets. It is calculated as Operating Income - (Average Operating Assets × Required Rate of Return).

What is one major criticism of using ROI as a performance measure?

One major criticism is that managers may reject profitable projects if the ROI of the project is lower than the current ROI, even if the project would benefit the company overall.

How does Economic Value Added (EVA) differ from Residual Income?

EVA is similar to Residual Income, but it calculates performance based on operating profit after tax and deducts the weighted average cost of capital (WACC), whereas Residual Income focuses on operating profit before tax and the minimum required return.