Strategy illustration Strategy theory

Measuring performance against objectives

Management accounting uses financial information in order to enable better decision making within the organisation. The format and content of management accounts will depend on the specific needs of the particular business. They are typically prepared to a clearly structured timetable on a monthly basis, often reporting within one week of the period end. The layout of the accounts is organised to best meet the needs of users - typically providing an analysis of costs and revenues with a breakdown by cost or profit centres, by departments, or other relevant areas of the business. Comparative figures are provided from the budget and the previous year's accounts. The accounts may include a revised forecast of results up to the year end and performance indicators including accounting ratios.

Management accounts

Managers in a car manufacturing company such as Nissan will regularly receive management accounts related to production. These accounts will have been prepared by management accountants, and will show such details as: Production figures to date Budgeted production figures Production figures this time last year Actual and budgeted costs, and comparative costs in the previous year Actual and budgeted revenues, and comparative revenues in the previous year These figures enable managers to get a feel of such issues as: Whether costs and revenues are in line with budgeted figures Whether there are production problems arising from rising costs, sales etc You can see that such management accounts are relevant for department managers in all areas of the organisation, enabling them to control their organisations more effectively.



Glossary »

Supporting Documents

These downloads will help to put strategy theory into context using real world examples from real businesses.

Using sponsorship to increase brand awareness
Infiniti logo

Learn how Infiniti used strategy theory to prosper in the automotive industry by downloading our premium case study.

Creating a winning marketing mix
JD Sports logo

Find out how JD Sports used strategy theory to succeed in the retail industry by downloading our premium case study.

Creating the right marketing mix
Motorola logo

Learn how Motorola used strategy theory to prosper in the telecommunications industry by downloading our premium case study.

Entering a new market with a new product
Experian logo

Find out how Experian applied strategy theory to succeed in the financial services industry by downloading our premium case study.

Innovation in infant nutrition
Cow & Gate logo

Discover how Cow & Gate used strategy theory to thrive in the food & drink industry by downloading our premium case study.

Newsletter

Subscribe to our newsletter for current business news including lesson plans and activity ideas.

Share this website