Accounting

Balanced scorecard- An integrated set of performance measures that are derived from and support the organization's strategy. (p. 529)

Cost center- A business segment whose manager has control over cost but has no control over revenue or investments in operating assets. (p. 509)

Delivery cycle time- The elapsed time from receipt of a customer order to when the completed goods are shipped to the customer. (p. 482)

Decentralized organization- An organization in which decision-making authority is not confined to a few top executives but rather is spread throughout the organization. (p. 508)

Economic Value Added (EVA)- A concept similar to residual income in which a variety of adjustments may be made to GAAP financial statements for performance evaluation purposes. (p. 526)

Investment center- A business segment whose manager has control over cost, revenue, and investments in operating assets. (p. 511)

MarginNet- operating income divided by sales. (p. 524)

Net operating income- Income before interest and income taxes have been deducted. (p. 523)

Operating assets- Cash, accounts receivable, inventory, plant and equipment, and all other assets held for operating purposes. (p. 523)

Profit center- A business segment whose manager has control over cost and revenue but has no control over investments in operating assets. (p. 509)

Residual income- The net operating income that an investment center earns above the minimum required return on its operating assets. (p. 526)

Responsibility center- Any business segment whose manager has control over costs, revenues, or investments in operating assets. (p. 509)

Return on investment (ROI)- Net operating income divided by average operating assets. It also equals margin multiplied by turnover. (p. 522)

Throughput time- The amount of time required to turn raw materials into completed products. (p. 482)

Turnover- Sales divided by average operating assets. (p. 524)