According to Weygandt, “Analysis involves use of ratios, percentages, graphs, and charts to highlight significant financial trends and relationships. Interpretation involves explaining the uses, meaning, and limitations of reported data” (2013). The accurate and timely analysis and interpretation of the financial records is what will allow stakeholders and managers to see and understand the overall financial picture for the company and then be able to decide what actions need to be …show more content…
Even though I only run a small business, with no outside investors, managerial accounting is still crucial to operating the business. By looking at financial records on a regular basis I am able to allocate and adhere to a budget, track cash flow, and financially prepare for busy and slow seasons. With accounting I can determine where costs can be cut and where additional spending can or should take place. I am also able to evaluate the overall growth of the company and when the time comes I will know when we are ready for outside investors. Financial and managerial accounting, despite their vast differences have one crucial element in common: the overall financial wellbeing of the company. Financial and managerial accounting each serve very different purposes for a company but each are equally as important. They both aid in making sound and informed financial decisions that will better the company in some