Value Added accounting theory

목차

1. Describe the methods used to calculate value added. How does value added contribute towards understanding the connections between the business and its product markets? Use relevant examples to illustrate points.
2. To what extent can improvements in productive flow and product quality lead to an increase in sales and profit?
3. Compare and contrast the characteristics of a growing and mature product market. Discuss how the different stages of the product life cycle can affect a business’s ‘cost recovery’ performance? Use relevant, extended examples.

본문내용

1. Describe the methods used to calculate value added. How does value added contribute towards understanding the connections between the business and its product markets? Use relevant examples to illustrate points.

Value added is a value that a business or an industry newly created through its operation, and it refers to monetary exchanges. From a national economic point of view, value added represents an amount of money that a single business (or an industry) added to national income, which is an important factor when measuring a degree of national growth of economy. Moreover, value added analysis plays a key role when a business assesses its productivity and builds strategies to increase profitability of its operation, which is a reason why value added analysis is considered a significant tool for today’s management.

As the first step to analyze value added, there are two ways to calculate it. Those are called the subtractive method and the additive method.

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참고자료

· M.C Gupta and C.A Di Benedetto, “Optimal Pricing and Advertising Strategy for Introducing a New Business Product with Threat of Competitive Entry”, 2007, in Industrial Marketing Management
· R. A. Thietart and R. Vivas, “An Empirical Investigation of Success Strategies for Businesses along the Product Life Cycle”, in Management Science, Vol. 30, No. 12 (Dec., 1984), pp. 1405-1423
· http://www.kostat.go.kr/nso_main/nsoMainAction.do?method=search&catgrp=nso2009&catid1=k09___0000&catid2=k09i__0000&forward=search), accessed on 23/11/2009
· Sylviane de Saint-Seine, “Nissan May Be Set to Take a Stake in Renault”, in Automotive News Europe 10/22/2001, Vol. 6 Issue 21, p3 1/8p