6-Financial%20%26%20Management%20Accounting

6-Financial%20%26%20Management%20Accounting - Engineering...

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Engineering Economics ECO 1192 Lecture 6: Financial & Management Accounting Claude Théoret University of Ottawa
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Fall 2009 Lecture 6: Financial And Management Accounting 2 Recommended Reading2 Fraser et al.* chapter 6 Newnan et al. chapter 18 Park chapter 13
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Fall 2009 Lecture 6: Financial And Management Accounting 3 Lecture Focus Accounting financial management Performance Measurement the balance sheet the income statement the statement of changes in financial position Analysis of financial statements financial ratios
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Fall 2009 Lecture 6: Financial And Management Accounting 4 Financial Accounting Recording and organizing business financial data revenues and expenses and levels (resources and claims on resources at a given time) Used for budgeting, cash management, and management of long-term debt By external users (investors, creditors) to make rational choices about a business Includes the preparation of: 1. Balance sheets 2. Income statements 3. Changes in financial position
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Fall 2009 Lecture 6: Financial And Management Accounting 5 Management Accounting Analysis of the costs and benefits of business activities provides managers with information for decision-making Engineers are increasingly involved in business decision-making need both financial and management accounting
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Fall 2009 Lecture 6: Financial And Management Accounting 6 Performance Measurement Flow of money in a firm is like the flow of water in a pipe or electricity in a wire water pressure and voltage are “ across variables measured at a point in time (a snapshot) water and electrical flow are measured as “ through variables ” over time (a second; week; etc) Income statement a “through variable” measures the flow of income and expenses during a specific period of time Balance sheet an “across variable” or stock variable Measures assets, liabilities and net worth at a point in time (i.e., a snapshot)
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Integrated Measurement Environment Results/ Outcomes Stakeholder Needs Implementation Actions Business Planning Accountability Results Expectation Strategic Planning Strategy Program Priorities & Resource Allocation Decision Support Change Plan Re-engineer Process Review Strategies Reports to Stakeholders Performance Measurement
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Results Chain Logic Model Area of Control Internal to the organization Activities Inputs (Resources) Outputs Area of Influence External to the organization Immediate Outcomes (Direct) Intermediate Outcomes (Indirect) Final Outcome Efficiency Effectiveness External Factors Control and Influence
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Fall 2009 Lecture 6: Financial And Management Accounting 9 Financial Accounting Statement: Balance Sheet 1. Assets (business resources) Current Long term 2. Liabilities (business debt) Current Long term 3. Equity (ownership)
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Fall 2009 Lecture 6: Financial And Management Accounting 10 Table 6.2 Balance Sheet for the Major Electric Company
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Fall 2009 Lecture 6: Financial And Management Accounting 11
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This note was uploaded on 06/24/2010 for the course FIR 4440 taught by Professor Moore during the Spring '08 term at U. Memphis.

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6-Financial%20%26%20Management%20Accounting - Engineering...

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