This document discusses various tools of management accounting. It identifies 16 main tools: 1) financial statement analysis, 2) cost accounting, 3) standard costing, 4) marginal costing, 5) budgetary control, 6) ratio analysis, 7) fund flow analysis, 8) cash flow analysis, 9) return on capital employed techniques, 10) operations research, 11) linear programming, 12) network analysis, 13) queuing theory, 14) simulation theory, 15) decision making accounting, and 16) revaluation accounting. For each tool, the document provides a brief explanation of what the tool is and how it is used to help management with functions like planning, decision making, and performance evaluation.

1. Tools of Management
accounting
PRESENTED BY Submitted to
Noman ajmal (Roll no. 30) Pawan Kumar Gupta,
Rohan ( Roll no. 34) Assistant Professor, Department of
B.COM –II YEAR Commerce, MGGAC, Mahe

2. INDEX
Tools of Management Accounting
1. Based on Financial Accounting Information
2. Based on Cost Accounting Information
3. Based on Mathematics
4. Based on Future Information
5. Miscellaneous ToolsImportant tools and techniques used in management accounting
6. Financial Planning
7. Financial Statement Analysis
8. Cost Accounting
9. Fund Flow Analysis
10. Cash Flow Analysis
11. Standard Costing

3. 12. Marginal Costing
13. Budgetary Control
14. Revaluation Accounting
15. Decision-making Accounting
16. Ratio Analysis

4. Based on Financial Accounting Information
A. Analysis of Financial Statements through comparative statements, trend, graph and
diagram.
B. Fund flow and cash flow analysis.
C. Return on capital employed techniques.

5. Based on Cost Accounting Information
A. Marginal costing (including cost volume profit analysis).
B. Direct or incremental Costing and differential costing.
C. Standard Costing.
D. Analysis of Cost Variances.

6. Based on Mathematics
A. Operations Research.
B. Linear Programming.
C. Network analysis.
D. Queing theory and Games Theory.
E. Simulation Theory.

7. Based on Future Information
A. Budget and Budgeting.
B. Budgetary control: Analysis of Budget Variance / Revenue Variance.
C. Business Forecasting.
D. Project Appraisal or Evaluation.

8. Miscellaneous Tools
A. Managerial Reporting.
B. Integrated Auditing.
C. Financial Planning.
D. Revaluation Accounting.
E. Decision making Accounting.
F. Management Information System.

9. Financial Planning
The main objective of any business organization is
maximization of profits. This objective is achieved by making
proper or sound financial planning. Hence, financial planning
is considered as best tool for achieving business objectives.

10. Financial Statement Analysis
Profit and Loss account and Balance Sheet are important
financial statements. These statements are analyzed for
different period. This type of analysis helps the management
to know the rate of growth of business concern. This analysis
is done through comparative financial statements, common
size statements and ratio analysis.

11. Cost Accounting
Cost accounting presents cost data in product wise, process
wise, department wise, branch wise and the like. These cost
data are compared with predetermined one. This comparison
of two costs enables the management to decide the reasons
responsible for the difference between these costs.

12. Fund Flow Analysis
This analysis find out the movement of fund from one period
to another. Moreover, this analysis is very useful to know
whether the fund is properly used or not in a year when
compared to the previous year. The working capital changes
and funds from operation are also find out through this
analysis.

13. Standard Costing
Standard costing is predetermined cost. It provides a yard
stick for measuring actual performance. It is used to find the
reasons for the deviations if any.

14. Marginal Costing
Marginal costing technique is used to fix the selling price,
selection of best sales mix, best use of scarce raw materials
or resources, to take make or buy decision, acceptance or
rejection of bulk order and foreign order and the like. This is
based on the fixed cost, variable cost and contribution.

15. Budgetary Control
Under Budgetary control techniques, future financial needs
are estimated and arranged according to an orderly basis. It
is used to control the financial performances of business
concern. Business operations are directed in a desired
direction.

16. Revaluation Accounting
The fixed assets are revalued as per the revaluation
accounting method so that the capital is properly represented
with the assets value. It helps to find out the fair return on
capital employed.

17. Decision-making Accounting
A business problem can be solved by choosing any one of the
best and most profitable alternative. To select such alternative,
the relevant costs are compared. Thus, accounting information
are used to solve the business problem which are arising out of
increasing complexity of nature of business.

18. Ratio Analysis
It is used to management in the discharge of its basic
functions of forecasting, planning, coordination,
communication and control. It paves the way for effective
control of business operations by undertaking an appraisal of
both the physical and monetary targets.

19. Thank You