Question

Purpose of APM

Continued/... A cash-flow project could be evaluated via IRR/NPV (net of risk-free captal). IRR/NPV isn't always about the acquisition of capital assets. An example of a cash-flow project could be suggested for marketing department. The marketing department is a high-risk function of the company concerning trends/customer demands. The cash-flows earned in the marketing department (a high-risk dept) might be a negative cashflow in one month but a positive cashflow in another month (i.e. enough to afford the expenses). A total net cashflow for a high-risk department such as marketing could be low in comparison to steady activities such as HR, Finance, Production where budgets are at a constant minimum. But Marketing department should have a budget to enhance sales performance, I think. Monthly-reporting enables a clear understanding of actual performance for information at tactical/strategic levels. An accurate (i.e. not manipulated) monthly-reporting received at executive level, enables the budgets to be revised (i.e. flexed) to reflect actual performance. The budget is a control function per product and the standard cost is related to this. A definition of a standard-cost card is a historical record of costs/revenue per product, factoring controllable/uncontrollable costs and it is a reference point for all management levels, and there is then transparency. Also, a private company isn't obliged to issue its financial statement/data to anyone; unless it's a limited/plc but I note that generally, published financial statements, available to the public, often publish the balance sheet and the director's statement only. If the financial statements isn't readily-available, the internal/external stakeholders can always refer to the company's mission statement. This is issued at executive-level and it communicates the co's ambitions for the longevity of the company (and the stewardship of the company) for at least three years.