Managerial and Finanical Accounting Report

There ar two broad categories in bill, financial be and managerial accounting. They differ in the type of user of the culture presented. Financial accounting is concerned with preparing financial relations for external last makers, such as stockholders and creditors. managerial accounting presents discipline for national decision making my managers.

Financial accounting involves record keeping. A major objective is the preparation of financial statements. These statements include the balance sheet, statement of cash flows, income statement, and change in owners equity (Introduction to financial accounts, 2005). This study will help external users decide if they should invest in the company, lend money to the railway line, or the profits which the company must pay tax on.

Managerial accounting uses much of the same information as financial accounting, but can be trim to fit the specific needs of the manager at a presumption time. Financial accounts are prepared for a given period, usually one year, while management accounts can be prepared for any period. For example, retail businesses often prepare unremarkable reports on sales and stock levels (Comparison of financial and management accounting, 2005). Managerial accounting involves more than just financial statements. Managerial accounting can include cash flow analysis, break counterbalance analysis, bud ingesting, and financial ratio analysis.



Management accounting can be used to plan for the future by understanding how sparing events affect the business (Bromwich, 1988). Managers can evaluate the state of the business by looking at efficiency, and analyzing costs.

There are several ratios which are useful to managers. Liquid ratios measure the companys ability to meet obligations utilize available assets. Solvency ratios measure the extent to which a company is financed by debt. Activity ratios measure the companys use of resources. Profitability ratios measure managements speciality (Managerial Accounting, 2005).

The Institute of Management Accountants Standards of Ethical Conduct for...

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