The Correlation of Theory of Constraints (TOC) Statement and Financial Statement–A Case Study of EMS Company A

• Main Authors: Yun-hsuan Liao, 廖芸萱
• Other Authors: Yi-kai Chen
• Format: Others
• Language: zh-TW
• Published: 2012
• Online Access: http://ndltd.ncl.edu.tw/handle/65873884797072333992

碩士 === 國立高雄大學 === 國際高階經營管理碩士在職專班(IEMBA) === 100 === Maximizing shareholders’ wealth is the ultimate goal of the management. Shareholders emphasize on the amount of dividends received. However, the management of a firm focuses on the operation in daily basis. Therefore， traditional financial reporting might not be an efficient index to the operation manager. The Theory of Constraints (TOC) becomes an alternative index for the operation manager. The objective of this study is to analyze the differences of TOC and conventional accounting analyses. In conventional accounting, most companies use activity-based cost (ABC) to manage a firm. Furthermore, they use ABC to form the strategies, capital budgeting, and product pricing. However, customer oriented and customizing in small amount of various products become a trend of electronic manufacturing industry. Thus, information produced by conventional accounting might be distorted. TOC becomes a solution to the management in the electronic manufacturing industry. The TOC statement can fully express target of earning and develop factory’s basic operation guidelines. This study takes advantage of the three aspects (throughput, inventory, and operating expense) in the TOC statement and analyzes the case Company A. Furthermore, this study examines the correlation between TOC and performance index formed by conventional accounting approach. The results provide the information whether the TOC statement can provide better inside to the management of the case Company A.