Engineering Management

Managerial Accounting

Group members:
• AsfandYar Khan Prepared by Hassan Afzal
• Hassan Afzal
• Muhmmad Ullah
• Umar Khan
• AzmatUllah
• Muhmmad Asif
 Introduction:

• Managerial accounting is the process of “identification, measurement, analysis, and

interpretation of accounting information” that helps business leaders make sound
financial decisions and efficiently manage their daily operations, according to the
Corporate Finance Institute.
 How Managerial Accounting Works

• Managerial accounting encompasses many facets of accounting aimed at

improving the quality of information delivered to management about
business operation metrics. Managerial accountants use information relating
to the cost and sales revenue of goods and services generated by the
company. Cost accounting is a large subset of managerial accounting that
specifically focuses on capturing a company's total costs of production by
assessing the variable costs of each step of production, as well as fixed
costs. It allows businesses to identify and reduce unnecessary spending and
maximize profits.
Managerial Accounting vs. Financial Accounting

• The key difference between managerial accounting and financial accounting relates to the
intended users of the information. Managerial accounting information is aimed at helping
managers within the organization make well-informed business decisions, while financial
accounting is aimed at providing financial information to parties outside the organization.
• Financial accounting must conform to certain standards, such as generally accepted
accounting principles (GAAP). All publicly held companies are required to complete their
financial statements in accordance with GAAP
• Because managerial accounting is not for external users, it can be modified to meet the
needs of its intended users. This may vary considerably by company or even
by department within a company.
Key Takeways of Managerial Accounting
• Managerial accounting involves the presentation of financial information for
internal purposes to be used by management in making key business decisions.
• Techniques used by managerial accountants are not dictated by accounting
standards, unlike financial accounting.
• The presentation of managerial accounting data can be modified to meet the
specific needs of its end-user.
• Managerial accounting encompasses many facets of accounting, including
product costing, budgeting, forecasting, and various financial analysis.
Types and Techniques of Managerial Accounting

• Product Costing and Valuation

• Cash Flow Analysis
• Inventory Turnover Analysis
• Constraint Analysis
• Financial Leverage Metrics
• Accounts Receivable (AR) Management
• Budgeting, Trend Analysis, and Forecasting
 Conclusion
In conclusion, management accounting ensures the transformation process from inputs,
through the production process to output is viable, and it plays a principal role
in management decision-making.

Thankyou
Refereances:
https://www.chegg.com/learn/accounting/accounting/financial-and-managerial-accounting
https://www.investopedia.com/terms/m/managerialaccounting.asp
https://www.freshbooks.com/hub/accounting/managerial-accounting-helps-managers
https://corporatefinanceinstitute.com/resources/knowledge/accounting/managerial-accounting/