Question

1. Describe at least two specific actions that a company could take to improve its ROI?

2. Compare and contrast a master budget and a flexible budget?

-Answer has to be open-ended to discussion.

Answer 1

The first step to improve your ROI is to understand what return is to you , the importance of return

also the way you want to increase your return by , increasing the sales figure or by increasing the profit figure , both of which largely depend on the mindset of the person performing business

Two actions which company can take are:

Increase Revenue : The best way to increase you ROI is to increase your revenue

Reduce Cost: Saving money is as equal to earning money , Unecessary cost should be reduce and cost cutting should always be in mind in order to earn more profit and increasing ROI

Calculate your current return : It is very essential to calculate your current return so as to understand how much increase is required and how much increase in ROI is practical

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The critical contrast between master budget  and flexible budget  plan is that master budget  is a money related figure that contains all planned incomes and expenses for the impending bookkeeping year while flexible budget  is a spending that is changed by joining the adjustments in the quantity of units created.

The purpose of master budget is to amalgamate every thing into one , while the purpose of flexible budget is to allow a good comparision between the actual and forecasted data

Preparation of master budget is one time activity , while preapartion of flexible budget is a multiple time activity