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The Importance of Operating Figures in Enterprise Controlling. Analysis of the Different Performance Measurement Systems

Hausarbeit 2015 24 Seiten

BWL - Controlling


Table of Contents

Executive summary

List of Abbreviations

List of Figures

1 Introduction
1.1 Problem Definition and Objectives
1.2 Structure of the paper
1.3 Methodology

2 Importance of operating figures
2.1 Types of operating figures
2.2 Functions of operating figures
2.3 Advantages and Disadvantages in using of operating figures

3 Performance Measurement Systems
3.1 ROI System
3.2 Balanced Scorecard (BSC)
3.3 RL System

4 Critical Analysis of the described performance measurement systems
4.1 ROI System
4.2 Balanced Scorecard (BSC)
4.3 RL System

5 Conclusion and Outlook
5.1 Conclusion
5.2 Recommendations / Outlook

List of References

ITM Checklist

Appendix 1 - ROI System

Appendix 2 - RL System profitability part

List of Abbreviations

illustration not visible in this excerpt

List of Figures

Figure 1: Operating Figures

Figure 2: Functions of operating figures

Figure 3: Balanced Scorecard (BSC)

Figure 4: General Part RL System

Figure 5: ROI System

Figure 6: RL System profitability part

Executive summary

This assignment is written as exam in the module international investment and control- ling as the test performance in controlling. Like it is known from everyday working performance it is very important to integrate a controlling system in every company so that the bosses are able to get to know the important figures of the company and to compare them on the one hand with the figures of the past years and on the other hand with them of the competitors. Every company has a publication requirement for some figures and so parts of them are able to be compared inside every branch. With opera- tion figures problems can be defined and it can help to determine operating high and low points as well as to control (target-actual comparison). All in all it can be said that operating figures provide condensed information and that is very important for every company. So with this assignment the need of operating figures should be shown as well as some systems to figure them out are explained and analysed.

1 Introduction

International Investment and Controlling is a very complex theme and so the author will start off with this thesis:

“Operating figures are not needed in business and are a waste of time for the management and all departments involved.”1

In the work on hand, operating figures are explained and three performance measurement systems are presented and analysed.

1.1 Problem Definition and Objectives

Today it is very important to have implemented a reporting system in every company regardless which branch. The problem is that much companies mainly smaller ones are not using a system like this. It is important for the internal and external position because the management is always informed about the performance of its company and is able to compare the own output and performance with the competitors.2 So this assignment should give an overview of the importance of operating figures and of different measurement systems which could be used and implemented in companies.

1.2 Structure of the paper

In the second chapter the importance of operating figures in companies is explained by different kinds and functions as well as the advantages and disadvantages of figures. Following this in the third chapter three different performance measurement systems ROI System, Balanced Scorecard and RL System are explained and these are analysed in chapter four. After that the results and a conclusion with the author’s recommenda- tions are given.

1.3 Methodology

All the information given in this assignment was researched in various books, but also in the internet. In the authors company she is also involved in some processes of devel- oping companies and doing analyses as well as collecting information for monthly reporting. So the author took her own internal knowledge into account but all information given in this assignment is also defined with sources.

2 Importance of operating figures

Operating figures are very important for the reporting of operating controlling. Figures are described by Weber as “quantitative data to inform as conscious compression of the complex reality on numerically detectable economic issues”3.

With figures operating facts can be imaged as long as they are measureable and quantifiable. Furthermore they are concentrated and in summary form, because of this partially some information could be lost.4

2.1 Types of operating figures

There are two different types of operating figures like the following figures shows. The first one is the absolute indicators which are spitted to 1. individual values e.g. turnover, 2. sum e.g. total assets, 3. differences e.g. operating profits and 4. averages e.g. average assets.

illustration not visible in this excerpt

Figure 1: Operating Figures5

The second part of operating figures are ratios which are divided into three parts: 1. outline numbers e.g. indebtedness, 2. relationship numbers e.g. return on investment and 3. index numbers e.g. price index.6

Absolute indicators are limited comparable in their applicability and their significance is low. These metrics provide too little information for very detailed analyses because they refer to particular situations and are usually used to represent approximate values.7

Ratios are used to relate two absolute indicators to each other. They are much more meaningful than absolute figures because they show certain relationships between eco- nomic issues.8

2.2 Functions of operating figures

Operating figures are an important information base and indicator, and support the corporate governance of management tasks in all areas. In this context, indicators have five essential functions assigned which will be shown in the figure below. Another very important function is the information function in terms of company profitability. Ratios are used to determine a target-actual comparison, a time comparison, a comparison operation, or to perform a comparison follow.9

illustration not visible in this excerpt

Figure 2: Functions of operating figures10


1 Own creation

2 Brühl, R. (2012)

3 Müller, A. p.142 (2008)

4 Siegwart, H.; Reinecke, S.; Sander, S. (2010)

5 Own creation (See H. Jung (2007). p.156)

6 Scheffler, E. (2011)

7 Küpper, H.-U. (2008)

8 Jung, H. (2007)

9 Weber, M. (2002)

10 Own creation (See Weber (1995). p.188)


ISBN (eBook)
ISBN (Buch)
816 KB
Institution / Hochschule
FOM Essen, Hochschule für Oekonomie & Management gemeinnützige GmbH, Hochschulleitung Essen früher Fachhochschule
importance operating figures enterprise controlling analysis different performance measurement systems



Titel: The Importance of Operating Figures in Enterprise Controlling. Analysis of the Different Performance Measurement Systems