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ACCOUNTING
LECTURE :
YULIA HENDRI
GROUPS :
AGUSNI KURNIAWATI (0910532)
CHINTYA LOVITA MATALITO
(0910533176)
KINANTI YURNALIS (0910532)
NINDYA MARETTA ALINI
(0910531021)
PUTRI ANJELIA (0910531018)
YUDHI
Functional Based Responsibility Accounting
Subtopics of discussion
Responsibility Accounting
Application of FBRA
Responsibility centers
Cost center
Revenue center
Profit center
Investment center
Cost Center
Revenue Center
Profit Center
Investment Center
Formula
ROI = NI/Investment
RI = NOPAT
EVA = Nopat (Net Operating Profit After
Tax)-COC(Cost of Capital)
COC = Cost of Debt +Cost Equity
Cost of Debt = interest Rate = Tax
Deductible
Cost Equity : dividend and capital gain=
non tax deductible
sales
Cost center
Revenue
center
Direct cost
only
Profit center
Investment
center
Capital
investmen
t
other
Comparison of ROI
Electronic Division
Medical Supplies
Sales
60.000.000
234.000.000
Operating income
3.600.000
7.020.000
Average operating
assets
20.000.000
39.000.000
ROI
18%
18%
2003:
Comparison of ROI
Electronic Division
Medical Supplies
Sales
80.000.000
234.000.000
Operating income
4.000.000
5.850.000
Average operating
assets
20.000.000
39.000.000
ROI
20%
15%
2004:
Medical supplies
division
2003
2004
2003
2004
Margin
6,0%
5,0%
3,0%
2,5%
Turnover
X3,0
X4,0
X6,0
X6,0
ROI
18%
20%
18%
15%
Advantages of ROI
Disadvantages of ROI
Residual income
Sales 480.000
Cost of good sold 222.000
Gross margin 258.000
Selling and adm. Exp. 210.000
Operating Income 48.000
January 1st net book value of operating assets 227.000
December 31 net book value of operating assets
323.000
Assuming that a minimum rate of return 12%
Residual Income
advantages
Disadvantages
EVA Example:
Mortgage
bonds
Unsecured
bonds
Common
stock
total
Weighted
average cost
of capital
Amount
Percent
x
After-tax
cost
weighted
cost
$
2.000.000
0.133
0.048
0.006
0.2
0.06
0.012
0.667
0.12
0.08
3.000.000
10.000.00
0
$15.000.0
00
0.098
EVA example
EVA
= after tax income cost of
capital
= $900.000 - $784.000
= $116.000
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