Activity-based costing is A PART of Activity-based management. Management uses the findings of activity-based costing to see the cause-effect relationship between activities and costs. And also by using activity-based management techniques, they find ways to reduce or eliminate non-value-added activities. Activity-based management is essential for companies who wish to strive for continuous improvement to maintain [...]
For managerial accounting accounting purpose, it is very useful to recast the normal income statement into a contribution margin format. So what is the difference between the normal gross margin format and the contribution margin format. The difference is self-explanatory -refer to the formula: Gross margin = Revenues – Cost of Sales whereas: Contribution margin [...]
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Below article describes the meaning of operating leverage, some of the ratios to measure operating leverage, its application and users and an illustrated example on how to compute operating leverage. (a) Meaning of Operating Leverage: Refers to the existence of fixed costs in a company’s cost structure Is used to measure operating risk (b) Following [...]
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In interpretating financial statements, whether financial or non-financial managers normally and frequently use the standard traditional business accounting ratio like profitability, liquidity, market based, assets utilization and others. However, one ratio commonly neglected is the Z-score model which is actually a quantitative model developed in 1968 by an eminent economist, Edward Atlman. So what is [...]
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About MBA: The Master of Business Administration (MBA) is an internationally-recognized degree Currently, this course is the most popular professional degree program in the world. Today there are over 2,500 MBA programs offered worldwide. First introduced at American universities around the turn of the 20th century, MBA programs have evolved in order to keep up [...]
As accounting has it primary objective of providing information useful to decision makers, the understanding of the role play by Accounting Information Systems is critical to many accountants. It’s important to understand how the accounting systems work: how to collect data about an organization’s activities and transactions; how to transform that data into information that [...]
For non financial manager, it is important to know what your accounting personnel meant by an Accounting Cycle. Append below is a flowchart from my other blog for a clearer understanding of the Accounting Cycle: An Accounting Cycle: Is a series of accounting process which begins with the identification of an economic activity or transaction, [...]
For non financial managers who are pursuing MBA accounting who have just read earlier article on the fundamental accounting concepts, below is a worked out example of the dual aspect concept or what usually your accounting colleagues call the double entry system or the debit and credit system DUAL ASPECT CONCEPT This dual aspect concept [...]
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Similar to pursuing any course say Accountancy, the selection of the “right” MBA School or programme is indeed a very challenging process. Many prospects would cite factors like cost, reputation, location and type of MBA.However please do not forget one critical factor during the selection of the right MBA which is the ACCREDITATION of the [...]
Introduction: Economic value-added (EVA) has increasingly gain acceptance amongst many top-notched organization. This performance metric for creating shareholders wealth is closely tied with the Value Based Management as they share the same principle of realigning business practices towards increasing shareholder value. Formula: In simple term, EVA is:
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