Managerial Accounting

Managerial Accounting is very different from Financial Accounting. There you learned about the overall framework of accounting, and how to prepare financial statements for investors and other people outside the company. Managerial Accounting will focus on preparing financial information for Managers who are inside the company. Their needs are different than the general public's, and Managers are entitled to access information that is confidential.

In this tutorial, and in the legal and business world in general, Managers (or Management) are viewed as a special group of people. We will view them both as a "whole" and as individuals. They are employees of the company, and they are the ones in charge of running a company and making daily, mission-critical decisions that effect the very life of the company.

Because of their position in a company, Management can either act to benefit the company and it's owners or they can undermine the company. We expect the former, and cringe at the latter. The financial collapse of Enron is a recent example of a group of Managers who put their own personal gain above their obligation to the stockholders and public alike. It was the 7th largest company in the US at the time. Thousands of employees people lost their entire retirement fund, and thousands of other investors lost their entire investment.

Each week we will learn to use new managerial tools. Each one is a little different, but when you are done you will have many useful tools for business decision-making. After all, a carpenter would use a hammer to drive a nail, and a screwdriver to install a screw. OK, I know a few that would use a hammer to drive a screw but you get the idea! ;-)

Let's put it this way: you can do more with a full box of useful tools. Fair enough? So each week we will learn to use some new ones, or find new and different uses for one's we've learned about earlier.