A PRESENTATION

ON
MEASURING ASSET EMPLOYED

Guided by:
Dr. Vedant Pandya

Prepared by:
Sunaina Dhar

Submitted to: Department Of Business Administration,

Faculty Of Management, M.K Bhavnagar University,Bhavnagar.

Measuring Asset Employed

When profit is compared with the assets
employed in earning it, the division is called
Investment Center.

Objectives
To provide information that is useful for making

sound decision.
To measure the performance of business unit as
an economic entity.
To motivate the managers to make such sound
decisions that are in the best interest of the
company.

Objectives of business units

They should generate adequate profits out of the

resources at their disposal.

They should invest in additional resources only

when the investment will produce an adequate

return.

Two ways to relate profits and

investments .
Return on investment(ROI)

ROI = (Gain from Investment Cost of Investment) / Cost

of Investment
Economic value added(EVA)

EVA = NOPAT-(Capital * Cost of Capital)

Working Capital Component

Cash
Receivables
Inventories
Working capital in general
Property ,Plant and Equipment
Leased Assets
Idle Assets
Intangible Assets
Non current liability

Methods of measuring assets by the

graph shown as

Capital
charges

Non Current
Liability

Intangible Assets

Idle Assets

cash

Measurin
g Assets
Employe
d

Receivables

Inventories

Property , Plant &

Equipment

Leased Assets

Bibliography
Anthony , Robert N. & Govindarajan , Vijay.

Management Control Systems , Ninth edition , New

Delhi : TATA Mc Graw Hill , 2002 , Print ,p.no 252-266.
(managementcontrolsystemoverview.blogspot.in/2012/03

/7measuring-and-controlling-assets.html)

THANK YOU..