1.1 identify the type of accounting
1.2 difference between Cost Accounting , Cost Accountancy and Costing
1.3 understand the Management information needs
1.4 identify the objectives of cost accounting
1.5 difference between Cost Accounting Vs. Financial Accounting
1.6 identify the role of cost accountant
This Power point presentation contents all about management accounting,
- Meaning of Management Accounting
-Scope of Management Accounting,
-Objectives of Management Accounting,
-Tools & Techniques for Management Accounting,
-Advantages of Management Accounting,
-Limitations of Management Accounting,
-Difference Between Management Accounting,Cost Accounting & Financial Accounting.
1.1 identify the type of accounting
1.2 difference between Cost Accounting , Cost Accountancy and Costing
1.3 understand the Management information needs
1.4 identify the objectives of cost accounting
1.5 difference between Cost Accounting Vs. Financial Accounting
1.6 identify the role of cost accountant
This Power point presentation contents all about management accounting,
- Meaning of Management Accounting
-Scope of Management Accounting,
-Objectives of Management Accounting,
-Tools & Techniques for Management Accounting,
-Advantages of Management Accounting,
-Limitations of Management Accounting,
-Difference Between Management Accounting,Cost Accounting & Financial Accounting.
Management Accounting - Meaning, Definition, Characteristics, Scope, Objectiv...RajaKrishnan M
Meaning Definition Characteristics Scope Objectives and Function Financial accounting and Management accounting - Management accounting and Cost accounting - Cost accounting and Management accounting and Financial accounting - Tools and Technics- Advantages and limitations
This presentation is about flexible budgeting and how it helps in adjusting the necessary changes in volume of activity. It is opposite of static budget, which remains fixed or at one amount regardless of the volume of activity.
Cost Accounting-
-Meaning of Cost Accounting
-Scope of Cost Accounting
-Nature of Cost Accounting
-Relationship b/w Financial Accounting & Cost Accounting
-Cost Accounting v/s Management Accounting
-Objectives of cost accounting
-Function of cost accountant
-Essentials of cost accounting
-Advantages of cost accounting
-Limitations of cost accounting
-Role of cost in cost accounting
-Cost Unit & Cost Centre
-Cost Techniques
-Costing Systems
-Costing Methods
-Cost Classification
-Components of total cost
-Cost Sheet.
Introduction to Financial statements - AccountingFaHaD .H. NooR
Financial statement introduction and its elements.
There are three fundamental financial statements used in accounting.
The income statement shows revenues and expenses.
The balance sheet is a listing of all asset, liability, and equity account balances that do not appear on the income statement.
The statement of cash flows shows how the company receives and spends its cash.
Management Accounting - Meaning, Definition, Characteristics, Scope, Objectiv...RajaKrishnan M
Meaning Definition Characteristics Scope Objectives and Function Financial accounting and Management accounting - Management accounting and Cost accounting - Cost accounting and Management accounting and Financial accounting - Tools and Technics- Advantages and limitations
This presentation is about flexible budgeting and how it helps in adjusting the necessary changes in volume of activity. It is opposite of static budget, which remains fixed or at one amount regardless of the volume of activity.
Cost Accounting-
-Meaning of Cost Accounting
-Scope of Cost Accounting
-Nature of Cost Accounting
-Relationship b/w Financial Accounting & Cost Accounting
-Cost Accounting v/s Management Accounting
-Objectives of cost accounting
-Function of cost accountant
-Essentials of cost accounting
-Advantages of cost accounting
-Limitations of cost accounting
-Role of cost in cost accounting
-Cost Unit & Cost Centre
-Cost Techniques
-Costing Systems
-Costing Methods
-Cost Classification
-Components of total cost
-Cost Sheet.
Introduction to Financial statements - AccountingFaHaD .H. NooR
Financial statement introduction and its elements.
There are three fundamental financial statements used in accounting.
The income statement shows revenues and expenses.
The balance sheet is a listing of all asset, liability, and equity account balances that do not appear on the income statement.
The statement of cash flows shows how the company receives and spends its cash.
Financial Management Unit III AssessmentQuestion 1· Define.docxvoversbyobersby
Financial Management Unit III Assessment
Question 1
· Define each part of a financial plan and discuss the importance of these components in managerial decision making.
·
Your response should be at least 250 words in length.
Question 2
· Construct a pro forma income statement for the first year and second year for the following assumptions:
Units of Sales in Year 1: 110,000
Price per Unit: $11
Variable cost per unit: 30%
Fixed Costs: $125,000
Income taxes: 15%
Interest Expense: $200,000
In year 2, Price per unit increases to $11.50, and unit of sales increases by 5%, all other assumptions remain the same.
Question 3
· Calculate the sustainable growth based on the following information:
·
· • Earnings after taxes = $35,000
· • Equity = $100,000
• d=22.4%
Question 4
· Calculate a table of interest rates based on the following information:
The pure interest rate is 1.6%
Inflation expectations for year 1 = 3%, year 2 =3.5%, years 3-5 =5%
The default risk is .1% for year one and increases by .2% over each year
Liquidity premium is 0 for year 1 and increases by .2% each year
Maturity risk premium is 0 for years 1 and 2 and .2% for years 3-5
BBA 3301, Financial Management 1
UNIT III STUDY GUIDE
Financial Planning, the Financial
System and Governance
Learning Objectives
Upon completion of this unit, students should be able to:
1. Define the elements of a business plan.
2. Explain the purpose and use of a financial plan.
3. Calculate sustainable growth.
4. Analyze the percent of sales approach to forecasting.
5. Conduct a basic financial forecast.
6. Construct the financial flow of funds model.
7. Explain moral hazard in executive compensation.
8. Develop an interest rate table for a term structure incorporating risk and
inflation.
9. Contrast theories pertaining to the term structure of interest rates.
Written Lecture
From courses in business administration and management, you will probably
note the planning function is key to organizational management. There are
various forms of planning that can include operational planning, strategic
planning, budgeting, and forecasting. Using financial data and information,
managers in all areas will need to either review or prepare business plans at
some point in their career. This unit begins with the study of business and
financial planning.
A business plan is a model of what management expects a business to become
in the future. A good business plan usually has broad, long-term planning on one
end and numerical short-term forecasting on the other end. Business plans can
be used by small business and entrepreneurs as well as large corporations in
planning expansion. Usually, a business plan involves some form of forecast and
the development of pro forma financial statements. Business plans are often
used by managers in assessing opportunities and allocating resources.
Additionally, investors (debt and equity) review the business ...
What Are Financial Statements?
Financial statements are written records that convey the business activities and the financial performance of a company. Financial statements are often audited by government agencies, accountants, firms, etc. to ensure accuracy and for tax, financing, or investing purposes. For-profit primary financial statements include the balance sheet, income statement, statement of cash flow, and statement of changes in equity. Nonprofit entities use a similar but different set of financial statements.
Chapter 2 Strategic Planning and Budgeting—Process, Preparation, .docxchristinemaritza
Chapter 2: Strategic Planning and Budgeting—Process, Preparation, and Control
OVERVIEW
Although it differs among companies, planning charts the direction of the company over a period of time to accomplish a desired result, such as improving profitability. Budgeting is simply one portion of the plan, and the annual budget should be consistent with the long-term goals of the business. Planning should link short-term, intermediate-term, and long-term goals. Plans are interrelated, and the annual plan may be based on the long-term plan. The objective is to make the best use of the company's available resources over the long term.
In planning, management selects long-term and short-term goals and draws up plans to accomplish those goals. Planning is more important in long-run management. The objectives of a plan must be continually appraised in terms of degree of accomplishment and how long implementation will take. There should be feedback as to the plan's progress. It is best to concentrate on accomplishing fewer targets so proper attention will be given to them. Objectives must be specific and measurable. For example, a target to increase sales by 20 percent is definite and specific. The manager can quantitatively measure progress toward meeting this target.
The plan is the set of details implementing a strategy. The plan of execution typically is explained in sequential steps, including costs and timing for each step. Deadlines are set.
The planning function includes all managerial activities that ultimately enable an organization to achieve its goals. Because every organization needs to set and achieve goals, planning often is called the first function of management. At the highest levels of business, planning involves establishing company strategies—that is, determining how the resources of the business will be used to reach its objective. Planning also involves the establishment of policies—the day-to-day guidelines used by managers to accomplish their objectives. The elements of a plan include objectives, performance standards, appraisal of performance, action plan, and financial figures.
All management levels should be involved in preparing budgets. There should be a budget for each responsibility center. Responsibility in particular areas should be assigned for planning to specific personnel. At MillerCoors Company, planning is ongoing, encouraging managers to assume active roles in the organization.
A plan is a predetermined action course. Planning has to consider the organizational structure, taking into account authority and responsibility. Planning is determining what should be done, how it should be done, and when it should be done. The plan should specify the nature of the problems, reasons for them, constraints, contents, characteristics, category, alternative ways of accomplishing objectives, and information required. Planning objectives include quantity and quality of products and services, as well as growth opportunities.
A pla ...
2. Budgets A budget provides a comprehensive financial overview of planned company operations. Learning Objective 1 Goals and objectives
3. Provide an opportunity to reevaluate existing activities and evaluate new ones. Aid managers in communicating objectives and coordinating actions across the organization. Compel managers to think ahead
4.
5.
6. Dysfunctional incentives lead managers to make poor decisions. Lying can arise if the budget process creates incentives to bias the budget information. Budgetary Slack (budget padding) is the overstatement or understatement of budgeted revenue to create a goal that is easier to achieve. Learning Objective 3
7. A sales forecast is a prediction of sales under a given set of conditions. Sales forecasts are usually prepared under the direction of the top sales executive. Learning Objective 4 The sales budget is the result of decisions to create Conditions that will generate a desired level of sales.
8. Competitors’ actions Past patterns of sales Estimates made By sales force General economic conditions Changes in the firm’s prices Changes in product mix Market research studies Advertising and sales promotion plans
9. Strategic plan Long-range planning Capital budget Master budget Continuous budget Learning Objective 5
10. The most forward-looking budget is the strategic plan, which sets the overall goals and objectives of the organization. The strategic plan leads to long-range planning, which produces forecasted financial statements for five- to ten-year periods.
11. Long-range plans… are coordinated with capital budgets, which detail the planned expenditures for facilities, equipment, new products, and other long-term investments. Master budgets link to both long-range plans and short-term budgets.
12. The master budget is a detailed and comprehensive analysis of the first year of the long-range plan. It summarizes the planned activities of all subunits of an organization. Sales Production Distribution Finance
13. Rolling budgets... are a common form of master budgets that add a month in the future as the month just ended is dropped.
14. Operating budget (Profit plan). . . Financial budget. . . Focuses on the Income Statement and supporting schedules or budgeted expenses. Focuses on the effects that the operating budget and other plans will have on cash balances.
16. 1. Basic data a. Sales budget b. Cash collections from customers c. Purchases and cost-of-goods sold budget d. Cash disbursements for purchases e. Operating expense budget f. Cash disbursements for operating expenses The principal steps in preparing the master budget:
17.
18. Sales budget Learning Objective 7 Cash collections from customers Disbursements for purchases Disbursements for operating expenses Purchases budget Operating expenses budget
19. It is easiest to prepare budgeted cash collections at the same time as the sales budget. Cash collections include the current month’s cash sales plus the previous month’s credit sales.
20. Budgeted purchases = Desired ending inventory + Cost of goods sold – Beginning inventory Disbursements could include 50% of the current month’s purchases and 50% of the Previous month’s purchases.
21. The budgeting of operating expenses depends on several factors. Month-to-month changes in sales volume and other cost-driver activities directly influence many operating expenses. Expenses driven by sales volume include sales commissions and many delivery expenses.
22. Other expenses are not influenced by sales or other cost-driver activity and are regarded as fixed, within appropriate relevant ranges. Rent Insurance Depreciation Salaries
23. Disbursements for operating expenses are based on the operating expense budget. Disbursements may include 50% of last month’s and this month’s wages and commissions plus miscellaneous and rent expenses. The total of these disbursements is then used in preparing the cash budget.
24. The income statement will be complete after addition of the interest expense, which is computed after the cash budget has been prepared. Budgeted income from operations is often a benchmark for judging management performance.
25.
26. Available cash balance = Beginning cash balance – Minimum cash balance desired. Cash receipts depend on collections from customers’ accounts receivable, cash sales, and on other operating income sources.
27. Cash disbursements for purchases depend on the credit terms extended by suppliers and the bill-paying habits of the buyer. Payroll depends on wage, salary, and commission terms and on payroll dates.
28. Other disbursements include outlays for fixed assets, long-term investments, dividends, and the like. Disbursements for some costs and expenses depend on contractual terms for installment payments, mortgage payments, rents, leases, and miscellaneous items.
29. Management determines the minimum cash balance desired depending on the nature of the business and credit arrangements.
30. Financing requirements depend on how the total cash available compares with the total cash needed. Needs include the disbursements plus the desired ending cash balance.
31. Ending cash balance = Beginning cash balance + Receipts – Disbursements + Cash from financing The cash from financing can be either positive (borrowing) or negative (repayment).
32. The final step in preparing the master budget is to construct the budgeted balance sheet that projects each balance sheet item in accordance with the business plan. Management then considers all the major financial statements as a basis for changing the course of events.
33. An activity-based budgetary system emphasizes the planning and control purpose of cost management. Functional budgeting focuses on preparing budgets for various functions such as production, selling, and administrative support.
34. Financial models are only as good as the assumptions and the inputs used to build and manipulate them. Financial planning models are mathematical models that can incorporate the effects of alternative assumptions about sales, costs, or product mix.
35. Arithmetic errors are virtually nonexistent. Spreadsheet software for personal computers is a powerful and flexible tool for budgeting that can be used to prepare mathematical models. Financial planning models are mathematical models that can incorporate the effects of alternative assumptions about sales, costs, or product mix. Learning Objective 9