Discussion
Describe the role of managerial accounting in your current or former place of business. If you have not been employed by a company that uses managerial accounting, choose a well-known company and describe how managers of that company might use managerial accounting information.
Be specific. Do not choose a company that one of your classmates has already written about.
Managerial accounting is considered to be the process associated with preparation of management reports along with accounts which offer accurate as well as timely financial and statistical data to administrators. It is beneficial in my organization, Dr Pepper Snapple, since it helps in making short term as well as long term related decisions.
It is also essential in the identification, measurement, analysis, interpretation and communication of relevant information to assist an organization in achieving its goals and gaining a competitive advantage (Young, 2008).
Through this, it assists in forecasting the future by aiding decision making. Moreover, it assists in the forecast of cash flows. It enables my organization to predict cash flows as well as the effect involving cash flow on the company.
Management accounting entails formulating budgets along with various trend charts. Administrators utilize this kind of information in making appropriate decisions on the mannerism in which to allocate money along with resources to enhance generation of the projected revenue development (Young, 2008).
Furthermore, it is essential in my organization since it assists in the comprehension of performance variances. Business performance associated discrepancies are considered to be variances that exist between what was initially predicted and what is attained in reality. Management accounting utilizes analytical approaches to assist the management to rely on positive variances as well as control the negative ones.
It enhances easy and adequate analysis of rate of return in a business. Before internalizing an identified project which needs heavy investments, the organization must analyze the anticipated rate of return (Needles, 2013).
The aspect of management accounting helps an organization to make the right choices regarding a certain project and select the most appropriate one. There are various instruments of the art of management accounting which are utilized in forecasting business trends. They are ratios, simulations, game theory and financial modeling.
Needles, B. E. (2013). Managerial accounting. Place of publication not identified: Cengage Learning.
Young, D. W. (2008). Management accounting in health care organizations. San Francisco: Jossey-Bass.