I need to know the Role of Management Accounting in profit maximization.
Emeka from Nigeria
Emeka! There is big role of management accounting in profit maximization because management accounting provides useful accounting information to management which are helpful for taking better business decisions. For example financial accounting provides the information that our sales in previous year is $ 2 million. We can not get any decision on this basis. But after applying management accounting tool, we find that product J's total sales is 64% of total products sales and it is from our K branch. This management accounting's information is more useful than simple financial accounting's information because we can invest more money for developing our product J and branch K. With this, we can maximize our profits more fastly. This example is just like a sample,we can do more things like cash flow analysis, ratio analysis and working capital management in management accounting. So it is very important for every organisation.
Emeka from Nigeria
Emeka! There is big role of management accounting in profit maximization because management accounting provides useful accounting information to management which are helpful for taking better business decisions. For example financial accounting provides the information that our sales in previous year is $ 2 million. We can not get any decision on this basis. But after applying management accounting tool, we find that product J's total sales is 64% of total products sales and it is from our K branch. This management accounting's information is more useful than simple financial accounting's information because we can invest more money for developing our product J and branch K. With this, we can maximize our profits more fastly. This example is just like a sample,we can do more things like cash flow analysis, ratio analysis and working capital management in management accounting. So it is very important for every organisation.
