Management Accounting
Management Accounting Checklist
Performance Indicators
In addition to costing and budgeting performance management is concerned with all aspects of a business's activities and a management accountant will produce reports on any area that is relevant to the business. Key performance measures will be identified and reported on a management dashboard. Some key performance figures include:
Return on capital employed in the business Dividend yield and cover. Return on capital employed in the business Dividend yield and cover.
Capacity usage Stock turnover Expenditure
Sales value Sales volume/mix Gross margins Market share Manufacturing costs Material price and usage Labour rates and efficiency
variance analysis Cash levels and liquidity Debtor's days Gearing ratio (loans
to equity) Net profit
Business managers should identify the most important performance indicators that are needed on a daily basis, and ensure that the management reporting system is capable of providing the information required. Three of the most common daily internal indicators are cash, sales and gross margin. These along with external information such as share price will always be closely followed by the chief executive. It is always important to identify, collect and take relevant information into account when making business decisions.
Future Practice Owner.
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