Managerial use of accounting data a how-to guide for understanding accounting data and making it work for you

What it’s about

This book serves as a comprehensive how-to guide for anyone seeking to master the managerial use of accounting data. It begins by demystifying the fundamentals of financial accounting and reporting, ensuring a solid foundation for all readers. It then divides its focus into two key areas: the external and internal use of accounting information. For external stakeholders like investors and creditors, it details the methods of financial statement analysis needed to evaluate a company's performance and stability, including specialized contexts like consolidated and multinational corporations. The core of the book, however, is dedicated to empowering internal managers. It provides practical instruction on using cost-volume analysis, developing and implementing budgets for planning and control, managing tax obligations, and applying specific cost data to a wide range of operational decisions, from make-or-buy choices to capital budgeting. The central theme is a relentless focus on measuring efforts against achievements, transforming accounting from a mere compliance exercise into a powerful tool for strategic management.

The through-line

Who it’s for

A student or a non-financial manager who wants to advance in their career by making better, data-driven business decisions, but feels intimidated or confused by accounting reports, cost data, and budgets.

The problem

They are constantly presented with financial statements, departmental budgets, and cost analyses that they do not fully understand, preventing them from effectively contributing to strategic conversations and making optimal decisions. They feel inadequate, insecure, and frustrated by their lack of financial literacy, worrying that they are making decisions based on intuition alone and are unable to justify their plans or performance with hard numbers.

The plan

1. First, master the fundamentals of the financial reporting system, including the basic financial statements.
2. Next, learn to analyze and interpret these statements from the perspective of an external manager, evaluating a company's overall health and performance.
3. Finally, dive deep into the internal use of accounting data, applying cost analysis, budgeting, and other techniques to control operations and make specific managerial decisions.

The payoff

The reader becomes a confident and competent manager who speaks the language of business. · They can intelligently analyze financial reports, manage budgets, control costs, and make data-driven decisions that improve profitability. · They gain the respect of colleagues and superiors, and are able to effectively plan, execute, and evaluate the performance of their area of responsibility.

See our guide

• Measure And Steer The Business With Financial Data →

Additional reading

• Companies Laws and Financial Reporting: West Germany, France, and the United Kingdom · Anita I. Tyra

  Cited in Chapter 6 to provide concrete examples of how national laws create differences in international accounting standards, supporting the book's discussion on the challenges of multinational accounting.

• Guide for the Reader of Foreign Financial Statements, 2nd ed. · Price Waterhouse & Co. (ed. George C. Watt)

  Used as a source in Chapter 6 to illustrate specific national accounting practices (e.g., in Peru), highlighting the lack of international uniformity a manager must navigate.

• Governmental Accounting, Auditing, and Financial Reporting · Municipal Finance Officers Association of the United States and Canada

  The book explicitly cites this publication in Chapter 7 for the formal definition of a 'fund,' which is the foundational concept for the entire chapter on accounting for nonprofit organizations.

• Accounting Research Study No. 12 · Leonard Lorensen (AICPA)

  Cited in the discussion of currency translation methods in Chapter 6 as the source for the 'Temporal Method,' showing the evolution of accounting standards that led to FASB-8.

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