Simple ROI and Residual Income Calculations: Consider the following data: Division Y P2,000,000 P1,250,000 P 182,000 P 150,000 P3,640,000 Invested capital Income Revenue P4,000,000 2.5% Income percentage of revenue Capital turnover Rate of return on invested capital 3. 14%

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Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.