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Cost structure of organisation

The aim of the report was to interpret and analyse the asset and cost structure of my organisation. The subject of the research was the Bank. The applied approach was the analysis by the numbers of the Bank’s balance sheet, P/L account and cost calculation. I have managed to get additional information of the controlling department. The analysis in both part, first introduce the asset or cost types, than analyse the proportion and the progress in time, and link it to the management strategy. The asset side of the balance sheet was restructured in the last year according to the figures.

The importance of the current assets appraised. The main element of this asset style is receivables, which give the significant part of the revenues. An important part of the assets is securities, the primary dealership boosted the amount of this asset, and the increased trading resulted outstanding profit. The major part of fixed assets is invested financial assets; this row contained all sort of strategic investment of the bank. After clean-out the portion of the invested financial assets dropped. The bad and non-banking style assets were removed from the portfolio.

The different costs of the bank operation can be difficulty grouped

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into the common cost categories. The result of the management cost reduction effort, operating costs increased by a modest 3% in nominal terms, which is in fact a decrease of 6,7% in real terms. However the cost asset ratio is still higher than the expected 5%. The major source of costs were labour costs by 40%, depreciation by 13%, 25% by non-material services, advertisements, rents, agency fees. Depreciation produced the largest cost increase, 34% due to investments made in the preceding and this year.

Non-material expenditures showed the largest cost reduction, including in particular, advertising, PR and marketing costs, rents and usage fees, and other services. Due to the inherited unfavourable balance sheet structure of the bank, in addition to the costs and unrealised profits of non-earning assets, the Bank’s earning capacity is still rather moderate. The management has to continue the asset restructuring, increase the total assets by intense business activity, and to use strict cost control and reduction in the future.

The report has two goals, and divided into two parts. At the first section the aim of the report was to explore asset structure of the company’s balance sheet. The analysis the composition of assets and link it to the activity and strategy of the company. In the second part the aim is to interpret a cost analysis, outlining the existing management policy in the field of cost management and give examples of typical cost classes.

The given conditions of the report length and the size of the company don’t allow me to review the whole organisation’s asset and cost structure. Therefore the subject of the research was to discuss the main elements of the organisation assets and costs. My organisation is a commercial bank, as this kind of financial institution the assets structure is far different from an ordinary producer or commercial company. I will outline these kinds of differences in my work.

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