Profit & Principles

A brief discussion of financial statements and their interrelationships. 

Let's discuss the accounting equation.

Enjoy a brief discussion of types of business. 

In this episode, we're diving into the essential world of Managerial Accounting! Think of this as your introduction to how accounting goes beyond the external reports and financial statements that you see on the news.We'll explore the Purpose and Perspective of managerial accounting, focusing on its key difference from financial accounting: providing vital information specifically for internal users, like managers. You'll learn how this internal focus allows managers to perform the four basic functions of the management process: strategic planning, measurement, evaluation, and control. We'll discuss how managerial accounting uses both historical data to evaluate past performance and estimated data to help in making future decisions.This episode will also touch upon key areas covered in this introductory chapter, including:•Understanding the nature of manufacturing operations and how costs are classified into direct materials, direct labor, and factory overhead.•The unique financial statements for a manufacturing business, like the statement of cost of goods manufactured, and how they handle inventory differently from retail or service companies.•How managerial accounting applies to service businesses, introducing concepts like utilization rates as a way to measure the performance of fixed assets.•A look at what's new and relevant in managerial accounting, including the growing importance of Corporate Social Responsibility (CSR), Environmental, Social, and Governance (ESG) reporting, and using eco-efficiency measures to evaluate savings from resource use. We'll see how managers use this information to increase revenue, control costs, and allocate resources.Tune in to understand how managerial accounting is the blueprint for internal decision-making and why it's crucial for businesses in today's dynamic environment!