Page 1 |
Previous | 1 of 18 | Next |
|
This page
All
Subset
|
Ratios and Controls BY RICHARD H. GROSSE PARTNER, PITTSBURGH OFFICE Presented before the Pennsylvania Industrial Bankers Association, Bedford, Pennsylvania — April, 1955 In January of this year your President sent to you a letter report setting forth certain "Small Loan Ratios" which were prepared by the statisticians, under the direction of Mr. Elmer E. Schmus, Vice-President and Cashier, of The First National Bank of Chicago. Your Chairman of Meetings has asked me to discuss the significance and impor-tance of these ratios with respect to operating a small loan business. You will note that I have captioned my talk "Ratios and Controls." When I learned that I was to talk for at least an hour I suggested that I be permitted to expand my discussion to include the following: 1. The various types of defalcations or irregularities which occur in your business. 2. The accounting procedures, reports, and systems of internal control which help to prevent such irregularities. 3. Various auditing techniques which detect irregularities. I am sure that you will see that I will not be discussing two separate and unrelated topics, because certain ratios, if properly used, can become a very effective tool for management in controlling the operations of a small loan business. RATIOS During the course of our work with various clients engaged in manufacturing and selling, we are sometimes asked questions along this line - How does our overhead compare with other companies? Are our selling and general administrative expenses in line with other com-panies? Is our gross profit ratio about right? Although these questions may not appear to be unreasonable, after a little deliberation it becomes obvious that average percentages or composite ratios can be misleading. For example, sales policies may differ widely in that one company may sell its products directly to its customers whereas another company may operate through distributors. One company may be using the latest equipment and methods whereas the equipment and methods of another 227
Object Description
Title |
Ratios and controls |
Author | Grosse, Richard H. |
Subject |
Ratio Analysis |
Office/Department |
Haskins & Sells. Pittsburgh Office |
Citation |
Haskins & Sells Selected Papers, 1955, p. 227-244 |
Date-Issued | 1955 |
Source | Originally published by: Haskins & Sells |
Rights | Copyright and permission to republish held by: Deloitte |
Type | Text |
Format | PDF with corrected OCR scanned at 400dpi |
Collection | Deloitte Digital Collection |
Date-Digitally Created | 2009 |
Language | eng |
Identifier | H&S SP1955_pgs 227-244 |