Lesson 9: Controlling

Question 1

4 Steps in Controlling

Answer 1

1. establishing performance objectives and standards
2. measuring actual performance
3. comparing actual performance to objectives and standards, and
4. taking necessary action based on the results of the comparisons

Question 2

5 Examples of Objectives and Standards

Answer 2

1. Sales targets
2. Production targets
3. Worker attendance
4. Safety records
5. Supplies used

Question 3

3 Types of Control

Answer 3

1. feedforward control
2. concurrent control, and
3. feedback control

Question 4

6 Components of Organizational Control Systems

Answer 4

1. strategic plan
2. long-range financial plan
3. operating budget
4. performance appraisals
5. statistical reports
6. policies and procedures

Question 5

7 Information Found in Statistical Reports

Answer 5

1. labor efficiency rates
2. quality control rejects
3. accounts receivable
4. accounts payable
5. sales reports
6. accident reports
7. power consumption report

Question 6

2 Strategic Control Systems

Answer 6

1. financial analysis
2. financial ratio analysis

Question 7

4 Types of Financial Ratios

Answer 7

1. liquidity
2. efficiency
3. financial leverage
4. profitability

Question 8

2 Liquidity Ratios

Answer 8

1. Current ratio
2. Acid-test ratio

Question 9

2 Efficiency Ratios

Answer 9

1. Inventory turnover ratio
2. Fixed asset turnover

Question 10

2 Financial Leverage Ratios

Answer 10

1. Debt to total assets ratio
2. Times interest earned ratio

Question 11

3 Profitability Ratios

Answer 11

1. Profit margin ratio
2. Return on assets ratio
3. Return on equity ratio

Question 12

3 Means/Approaches to Identify Control Problems

Answer 12

1. executive reality check
2. comprehensive internal audit
3. general checklist of symptoms of inadequate control