Accounting helps in Performance measurement Performance measures helps

External Uses of accounting n Key Financial Statements – Balance Sheet – Profit and

Use of Financial Accounting n n n Provides information primarily to people outside the

Management Accounting is providing information, which is helpful in monitoring and evaluating management performance

Techniques of Management Accounting • Ratio analysis • Cost accounting such as standard costing,

Use of Management Accounting Performance Measurement n Performance Evaluation n Evaluation of allocation of

Uses of Management Accounting Thus it seeks to provide answers to the following questions:

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Accounting helps in - Performance measurement Performance measures helps in implementing the strategy of the organization

External Uses of accounting n Key Financial Statements – Balance Sheet – Profit and Loss account – Cash flow statement

Use of Financial Accounting n n n Provides information primarily to people outside the company Provides information that would be helpful in attracting: Useful to those making investment and credit decisions, who have a reasonable understanding of business and economic activities. Helpful to present and potential investors, creditors, other users in assessing the amount, timing, and uncertainty of future cash flows. Provides information about economic resources

Management Accounting is providing information, which is helpful in monitoring and evaluating management performance The function of managerial Accounting is to: n Providing information to people inside the company n To make internal investment decisions

Techniques of Management Accounting • Ratio analysis • Cost accounting such as standard costing, Marginal costing • Budgeting • Cash flow statement • Other internal performance reports.

Use of Management Accounting Performance Measurement n Performance Evaluation n Evaluation of allocation of Decision Rights. n Decision making relating to Break even point, Costing, Product Mix and other decisions n

Uses of Management Accounting Thus it seeks to provide answers to the following questions: n What sales volume is necessary to produce an X amount of operating profit. n What will be the operating profit or loss at X sales volume be. n What will be the effect on operating profit be if the company's fixed costs have increased or sales mix have been changed. n What sales volume is needed to achieve the budgeted profit or to cover the additional fixed charges from the proposed new project.