Question
1.it is known that finanacial accounting is designed for external users in the form of finanacial statements where as managerial accounting is designed to internal users in the form of performance repor,but finanacvial statements are also known as performance repor. Does managerial accounting mean not used finanacial statements.what is the clear distinction between these two fields of accounting?
thanks.
Nov 1, 2011
Price Modeling & Management
Key Elements:
Sophisticated modeling techniques
Accurately accounts for geographic or consumer segment differences in price elasticity
Incorporates key price points and competition
Financial analysis considering margins and retail pass-through of price changes
Helps determine optimal pricing across a wide range of items
Marketing Analytics price models have been used to guide decisions on billions of dollars of product, providing insights into expected volume at new prices, key price points, changing price sensitivity, shelf versus promotional price changes, portfolio pricing, and competitive price matching.
The solution we implemented for Kraft Foods is literally a textbook example of a successful automated modeling system.
"Kraft has invested in software to provide automated and standard modeling results and on the information infrastructure to rapidly feed data into this software. This investment has made possible the "mass production" of standard econometric models of price and sales promotion across hundreds of product groupings in dozens of product categories. .. One additional benefit of this process of automated modeling is a cross-sectional database of model results that can be further analyzed to produce company-wide insight into the effect of key measures such as price elasticity, trade merchandising effectiveness, etc. on brand performance." [Hanssens, Dominique M., Leonard J. Parsons, and Randall L. Schultz. Market Response Models: Econometric and Time Series Analysis. 2nd Edition. Boston: Kluwer Academic Publishers, 2001.]
Sophisticated modeling techniques
Accurately accounts for geographic or consumer segment differences in price elasticity
Incorporates key price points and competition
Financial analysis considering margins and retail pass-through of price changes
Helps determine optimal pricing across a wide range of items
Marketing Analytics price models have been used to guide decisions on billions of dollars of product, providing insights into expected volume at new prices, key price points, changing price sensitivity, shelf versus promotional price changes, portfolio pricing, and competitive price matching.
The solution we implemented for Kraft Foods is literally a textbook example of a successful automated modeling system.
"Kraft has invested in software to provide automated and standard modeling results and on the information infrastructure to rapidly feed data into this software. This investment has made possible the "mass production" of standard econometric models of price and sales promotion across hundreds of product groupings in dozens of product categories. .. One additional benefit of this process of automated modeling is a cross-sectional database of model results that can be further analyzed to produce company-wide insight into the effect of key measures such as price elasticity, trade merchandising effectiveness, etc. on brand performance." [Hanssens, Dominique M., Leonard J. Parsons, and Randall L. Schultz. Market Response Models: Econometric and Time Series Analysis. 2nd Edition. Boston: Kluwer Academic Publishers, 2001.]
Business development metrics and scorecard
Linking business development plan to Balanced Scorecards
In a globalized economy companies often find the task of business development to be far more challenging than their initial plans which may even have a textbook simplicity about them. While a traditional business development plan may be good in itself if may suffer from inadequacies resulting out of a lack of attention to evolving market details and changing taste patterns.
The business environment in 21st century has seen a seismic change with consumers getting access to an ever increasing range of choices for products and services. The internet has been an enabler of open dissemination of information and with social networking and blogging gaining ground, customers today can rapidly shift opinion about a brand and even measure its value with its competitors with ease. Even large organizations cannot hide behind their preeminent market position or economies of scale while pursuing their business development objectives. New upstarts and innovative companies are already pushing at the established order in many industries and competition for new business is at an all-time high. As consumers choices become less stable and the business race heats up, it becomes critical for businesses to evaluate the need to redefine their business development plan and tailor it with the changing times.
The Business Challenge
At times management is aware of complexities that await them in the real world but are reluctant to see the light and naively pursue policies under misplaced belief that with time the performance will improve. Different organizations use different measures to deal with the challenge of developing their business under a dynamic market conditions - some tend to remain idealistic and present their potential and existing customers with a set of facts about their products , which while being true, scores low on garnering instant attention. On the other hand some managers end up believing that hype based marketing campaign based on sheer can give dividends and end up tailoring their business development plans in the same vein. However soon they realize that such a approach can only bring temporary benefits and gain customers who have limited loyalty with brand they purchase. The goal of getting the right balance can often become a unending paradox unless proven performance measurement paradigms are not introduced.
The Solution
The complexity of the business development challenges that managers typically experience lead them to explore different performance management tools. At times managers can go ahead introduce complex concepts that do more harm than good or even start the use of costly software which may fail to address the specific issues at hand. This leads to the loss of valuable time and effort and can also lead to wrong decisions.
In a globalized economy companies often find the task of business development to be far more challenging than their initial plans which may even have a textbook simplicity about them. While a traditional business development plan may be good in itself if may suffer from inadequacies resulting out of a lack of attention to evolving market details and changing taste patterns.
The business environment in 21st century has seen a seismic change with consumers getting access to an ever increasing range of choices for products and services. The internet has been an enabler of open dissemination of information and with social networking and blogging gaining ground, customers today can rapidly shift opinion about a brand and even measure its value with its competitors with ease. Even large organizations cannot hide behind their preeminent market position or economies of scale while pursuing their business development objectives. New upstarts and innovative companies are already pushing at the established order in many industries and competition for new business is at an all-time high. As consumers choices become less stable and the business race heats up, it becomes critical for businesses to evaluate the need to redefine their business development plan and tailor it with the changing times.
The Business Challenge
At times management is aware of complexities that await them in the real world but are reluctant to see the light and naively pursue policies under misplaced belief that with time the performance will improve. Different organizations use different measures to deal with the challenge of developing their business under a dynamic market conditions - some tend to remain idealistic and present their potential and existing customers with a set of facts about their products , which while being true, scores low on garnering instant attention. On the other hand some managers end up believing that hype based marketing campaign based on sheer can give dividends and end up tailoring their business development plans in the same vein. However soon they realize that such a approach can only bring temporary benefits and gain customers who have limited loyalty with brand they purchase. The goal of getting the right balance can often become a unending paradox unless proven performance measurement paradigms are not introduced.
The Solution
The complexity of the business development challenges that managers typically experience lead them to explore different performance management tools. At times managers can go ahead introduce complex concepts that do more harm than good or even start the use of costly software which may fail to address the specific issues at hand. This leads to the loss of valuable time and effort and can also lead to wrong decisions.
Rate/Volume Analysis
The following schedule presents the dollar amount of changes in interest income and interest expense for major components of interest-earning assets and interest-bearing liabilities. It distinguishes between the changes related to outstanding balances and that due to changes in interest rates. The change in interest attributable to rate has been determined by applying the change in rate between periods to average balances outstanding in the later period. The change in interest due to volume has been determined by applying the rate from the earlier period to the change in average balances outstanding between periods. Changes attributable to both rate and volume which cannot be segregated have been allocated proportionately based on the changes due to rate and the changes due to volume.
Six Months Ended June 30,
2006 vs. 2005
Increase
(Decrease)
Due to
Volume Rate Total Increase
(Decrease)
(In thousands)
Interest-earning assets:
Loans receivable $ (1,526) $ 1,782 $ 256
Mortgage-backed securities 884 0 884
CMO's 934 174 1,108
Investment securities (142) 93 (49)
FHLB stock (13) 30 17
Interest earning deposit accounts 306 499 805
Other earning assets (98) 0 (98)
Total interest-earning assets $ 345 $ 2,578 2,923
Interest-bearing liabilities
Savings and money market $ (258) $ 2,324 2,066
Interest-bearing demand (17) 15 (2)
Time 841 751 1,592
Borrowings (136) (12) (148)
Total interest-bearing liabilities $ 430 $ 3,078 3,508
Net interest income $ (585)
The decrease in net interest income of $585,000, or 2.9%, for the current six-month period over the same period last year primarily resulted from a 2.6% increase in average total interest-earning assets to $1.4 million from $1.3 million for the comparable period in 2005. The net change in rate for average total interest-bearing liabilities was a greater increase than the change in rate for average total interest-earning assets. Average interest-bearing liabilities decreased 0.09% to $1.1 million in 2006 from $1.1 million for the same period last year. The yield on average interest-earning assets for the six-month period ended June 30, 2006 increased to 5.08% from 4.76% during the same period in 2005. The cost of average interest-bearing liabilities increased to 2.56% for the six-month period ended June 30, 2006 from 1.94% for the same six-month period in 2005. The net interest spread decreased to 2.52% for the six months ended June 30, 2006 from 2.82% from the same six month period in 2005.Because the Company's interest-bearing liabilities generally reprice or mature more quickly than its interest-earning assets, an increase in short term interest rates would initially result in a decrease in net interest income.
Six Months Ended June 30,
2006 vs. 2005
Increase
(Decrease)
Due to
Volume Rate Total Increase
(Decrease)
(In thousands)
Interest-earning assets:
Loans receivable $ (1,526) $ 1,782 $ 256
Mortgage-backed securities 884 0 884
CMO's 934 174 1,108
Investment securities (142) 93 (49)
FHLB stock (13) 30 17
Interest earning deposit accounts 306 499 805
Other earning assets (98) 0 (98)
Total interest-earning assets $ 345 $ 2,578 2,923
Interest-bearing liabilities
Savings and money market $ (258) $ 2,324 2,066
Interest-bearing demand (17) 15 (2)
Time 841 751 1,592
Borrowings (136) (12) (148)
Total interest-bearing liabilities $ 430 $ 3,078 3,508
Net interest income $ (585)
The decrease in net interest income of $585,000, or 2.9%, for the current six-month period over the same period last year primarily resulted from a 2.6% increase in average total interest-earning assets to $1.4 million from $1.3 million for the comparable period in 2005. The net change in rate for average total interest-bearing liabilities was a greater increase than the change in rate for average total interest-earning assets. Average interest-bearing liabilities decreased 0.09% to $1.1 million in 2006 from $1.1 million for the same period last year. The yield on average interest-earning assets for the six-month period ended June 30, 2006 increased to 5.08% from 4.76% during the same period in 2005. The cost of average interest-bearing liabilities increased to 2.56% for the six-month period ended June 30, 2006 from 1.94% for the same six-month period in 2005. The net interest spread decreased to 2.52% for the six months ended June 30, 2006 from 2.82% from the same six month period in 2005.Because the Company's interest-bearing liabilities generally reprice or mature more quickly than its interest-earning assets, an increase in short term interest rates would initially result in a decrease in net interest income.
Aug 10, 2011
Analysts' take
“Globalization, consumerization, new competitors and new service models are radically ‘changing the shape of IT’. IT leaders must develop greater transparency into the costs, utilization and operations of their IT services in order to optimize their IT investments and evolve from being technology managers to being stewards of business technology.” [1] -- Barbara Gomolski, Research Vice President, Gartner
"By making these costs transparent, the IT organization can fundamentally change the way business units consume IT resources, drive down total enterprise IT costs, and focus on IT spending that delivers real business value. The CIO who leads this change can usher in a new era of strategic IT management--and true partnership with the business." [2] --Andrew M. Appel, Neeru Arora, and Raymond Zenkich. McKinsey & Company.
"Companies can get an understanding of the best candidates for virtualization or consolidation, for instance, and further reduce the cost of resources. IT organizations consistently try to become more efficient, and this type of detailed information enables visibility, billing and chargeback in the future,"
"By making these costs transparent, the IT organization can fundamentally change the way business units consume IT resources, drive down total enterprise IT costs, and focus on IT spending that delivers real business value. The CIO who leads this change can usher in a new era of strategic IT management--and true partnership with the business." [2] --Andrew M. Appel, Neeru Arora, and Raymond Zenkich. McKinsey & Company.
"Companies can get an understanding of the best candidates for virtualization or consolidation, for instance, and further reduce the cost of resources. IT organizations consistently try to become more efficient, and this type of detailed information enables visibility, billing and chargeback in the future,"
Capabilities
While specific solutions vary, capabilities can include:
Simplified or automated collection of key cost driver data
An allocation or cost modeling interface
Custom reporting and analysis of unit cost drivers, including CIO dashboards
Ability to track operational metrics such as utilization, service levels, support tickets along with cost
Bill of IT reports for chargeback or service allocation to Lines of Business
Forecast and budget tracking versus actual and over time
Hypothetical scenario planning for new project ROI analysis
Cost benchmarking against industry averages or common metrics
Simplified or automated collection of key cost driver data
An allocation or cost modeling interface
Custom reporting and analysis of unit cost drivers, including CIO dashboards
Ability to track operational metrics such as utilization, service levels, support tickets along with cost
Bill of IT reports for chargeback or service allocation to Lines of Business
Forecast and budget tracking versus actual and over time
Hypothetical scenario planning for new project ROI analysis
Cost benchmarking against industry averages or common metrics
Management accounting tasks/ services provided
Listed below are the primary tasks/ services performed by management accountants. The degree of complexity relative to these activities are dependent on the experience level and abilities of any one individual.
Rate & Volume Analysis
Business Metrics Development
Price Modeling
Product Profitability
Geographic vs. Industry or Client Segment Reporting
Sales Management Scorecards
Cost Analysis
Cost Benefit Analysis
Cost-Volume-Profit Analysis
Life cycle cost analysis
Client Profitability Analysis
IT Cost Transparency
Capital Budgeting
Buy vs. Lease Analysis
Strategic Planning
Strategic Management Advise
Internal Financial Presentation and Communication
Sales and Financial Forecasting
Annual Budgeting
Cost Allocation
Rate & Volume Analysis
Business Metrics Development
Price Modeling
Product Profitability
Geographic vs. Industry or Client Segment Reporting
Sales Management Scorecards
Cost Analysis
Cost Benefit Analysis
Cost-Volume-Profit Analysis
Life cycle cost analysis
Client Profitability Analysis
IT Cost Transparency
Capital Budgeting
Buy vs. Lease Analysis
Strategic Planning
Strategic Management Advise
Internal Financial Presentation and Communication
Sales and Financial Forecasting
Annual Budgeting
Cost Allocation
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