Managerial Accounting

In this highly practical course, participants learn how to analyze internally-prepared financial information and use it as a basis for making sound business decisions. Beginning with an overview of the key differences between external and internal financial reporting, the course quickly progresses to more complex models and tools for financial analysis, such as break-even analysis, cost estimation methods, sales mix analysis, relevant costing, target costing, activity-based costing, make vs. buy analysis, division and segment analysis, transfer pricing, return on investment measure, and more.

13-Dec-2012 -- 14-Dec-2012ChicagoUSD$2475
NY Institute of Finance - Chicago9:00am - 4:30pm Instructional Method:
Group-Live
Instructor(s): [ Marc Cherney; ] Thu Fri Level: Basic

CPE CREDITS
14.0
Financial analysts, accountants, consultants, project leaders, operating managers, auditors, and others who seek a broad, yet comprehensive understanding of managerial accounting methods used by successful companies to make better business decisions.
No advance preparation required.
Students will be able to:
  • Differentiate between financial and managerial accounting
  • Assess the impact of changing levels of sales and costs on profits
  • Describe the advantages & disadvantages of operating leverage
  • Measure the impact of a changing sales mix on profits
  • Determine whether a reduction in unit sales price will increase profits
  • Analyze the bottom-line impact of eliminating a product or service
  • Apply contribution margin analysis to identify the most profitable products
  • Describe how target costing can help companies achieve desired gross margins
  • Determine whether a company should outsource a product, service, or activity
  • Evaluate the financial performance of a department, division, or business unit
  • Explain how using the balanced scorecard approach can improve profits
  • Apply controllable cost analysis to judge the financial performance of managers
  • Describe how internal transfer pricing policies can lead to bad decision making
  • Describe how Activity-Based Costing improves cost allocation & pricing
  • EUtilize capital budgeting tools to make better capital allocation decisions
A fundamental understanding of accounting and financial reporting principles.
SESSION ONE
Managerial vs. Financial Accounting
  • Key differences between external financial reporting and internally-prepared financial reports.

Cost-Volume-Profit Analysis

  • Impact of changes in sales and production activity on company profitability, due largely to the changing levels of fixed and variable costs at different levels of sales and production.

Measuring Cost Bahavior

  • Common methods used by companies to estimate and allocate costs to products, services, and departmnets.
  • Cost functions, including enginering analysis, account analysis, the high-low method and least squares regression analysis for forecastng cost behavior.

Activity-Based Costing

  • An effective tool for more accurately allocating costs to products and services based on the cost and amount of the activities consumed in providing the applicable products and services.

Special Pricing Decisions

  • Relevant costing methods used to determine if it will be profitable to reduce the normal price on a special sales order.
  • Using target costing to achieve an indicated price and profit margin.

Make vs. Buy Decisions: Outsourcing

  • Tools and techniques for assessing whether it makes financial sense to outsource a product or service or to keep making or providing that product or service in-house.

Flexible Budgeting & Analysis

  • Constructing budgets based on activity levels and analyzing true couses of variances
  • Using flexible budgets for forecasting and decision making

SESSION TWO
Responsibility Accounting
  • Effective methods for measuring financial performance of a company, division, department, or business segment.
  • Balanced Scorecard: A performance measurement system that links financial success to its underlying components of organization learning, business process improvement, and customer satisfaction.
  • Controllable Cost Analysis: A method of capturing and reporting financial information that clearly identifies and distinguishes how a division or segment is doing financially, from how effective a job the manager is doing in managing the resources under his or her direct control.

Decentralized Organizations

  • Internal Transfer Pricing: Principles and practices in how companies set prices for internally-transferred products and services in a manner that maximizes enterprise value without penalizing any one manager or division.
  • Return on Investment Measures: Key measures for evaluating financial performance of a division or business unit, such as return on investment (ROI), and return on capital employed (ROCE), including a distinction between economic value and traditional accounting-based rate of return measures.

Capital Budgeting Tools

  • Methods of assessing proposed capital budgeting projects, including payback, accounting rate of return, net present value, and internal rate of return.
  • Case problems for analysis and decision making.

Summary & Conclusion

Clients who register for this course will receive a complimentary 4-month subscription to FT.com. The Financial Times is the world's most respected financial newspaper, providing a broad assessment on finance, business and the industrial sector. The move to the electronic version follows an ongoing review of our environmental responsibilities as a global business and as part of the Pearson group. FT.com also has features that are not available in hard copy, such as: Special Reports, Alphaville, editor blogs, education sections and much more! Subscriptions will start within 6-8 weeks of the start of class and are limited to one subscription per client. (Please note: as of May 1, 2011, the electronic subscription replaces the hard-copy 3-month Financial Times subscription.)

Lunch is included for all students taking day classes.