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Accounting for Managers

Accounting for Managers. Module 14: Performance Evaluation in Organizations. Non-Financial Performance Measures. Performance Reports.

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Accounting for Managers

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  1. Accounting for Managers Module 14: Performance Evaluation in Organizations

  2. Non-Financial Performance Measures

  3. Performance Reports • Will help a manager compare “apples to apples” by expanding budget documents to include revenue, spending & activity variances, and whether they are truly unfavorable

  4. Financial Performance Measures

  5. Trend Analysis of Financial Statements • Involves looking at financial data within a set of financial statements

  6. Common-Size Analysis of Financial Statements • Look at relationship among financial statement accounts at any given point in time • Look at financial statement accounts as percentage of sales • Each type of analysis has benefits and limitations

  7. Ratio Analysis of Financial Information • Used in variety of ways • Ratios are way to notice variances in assets, liabilities, income, and expenses

  8. Evaluating an Organization

  9. For-Profit Organizations • Performance evaluation can be done using both financial and non-financial information • financial: responsible for certain level of sales in department • non-financial: responsible for defect free units produced per shift • Marketing evaluations include both types of data and look at different aspects and take different approaches • Monthly, quarterly, and yearly evaluations used to determining health of company • Financial information includes income statement, balance sheet, cash flow analysis, etc.

  10. Non-Profit Organizations • Different goals and needs than for-profit organizations • Financial aspects include meeting budgets and following granting and funding reporting requirements • Many non-financial goals in non-profits • Financial standpoint examples: difference in donation levels compared to what was budgeted • Non-financial standpoint: could evaluate HOW donations are requested • Payroll was high so evaluating that expense would include looking at hours worked or time used for opening/closing the store

  11. Quick Review Numbers only tell part of the story so we must dig deeper, looking at ratios, comparing budget to actual, evaluating trends, and looking at non-financial informationCustomer and employee satisfaction will have effect on operation of a businessHigh employee turnover may affect budgeted payroll numbers

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