Management Management AAccounting ccounting MMethodsethods In Industrial Praxis In Industrial Praxis

Kelly GrunewaldKelly Grunewald

Ana ElyAna Ely

Helena AschenbrennerovaHelena Aschenbrennerova

Management AccountingManagement Accounting

Concerned with providing information to Concerned with providing information to managers for use in planning and controlling managers for use in planning and controlling operations and in decision makingoperations and in decision making

Emphasis on future decisionsEmphasis on future decisions

Relevance and flexibility of data (need not follow Relevance and flexibility of data (need not follow GAAP)GAAP)

Production schedules and pricing strategiesProduction schedules and pricing strategies

Internal usage onlyInternal usage only

Chosen methodsChosen methods

Balanced ScorecardBalanced Scorecard

Breakeven AnalysisBreakeven Analysis

Financial Financial Performance Performance measuresmeasures

Non-financial performNon-financial performance measures ance measures Economic Value AddeEconomic Value Added - EVAd - EVA

Total Quality ManageTotal Quality Management, Indicator EFQMment, Indicator EFQM

Breakeven analysisBreakeven analysis

Cost classification (Fixed vs. variable)Cost classification (Fixed vs. variable)

Fixed costs/(Sales price – variable costs)Fixed costs/(Sales price – variable costs)

After breakeven point, net income After breakeven point, net income increases by unit contribution marginincreases by unit contribution margin

Skoda Machine ToolSkoda Machine Tool

EVAEVA

Economic value added focuses on Economic value added focuses on measuring the creation of value from measuring the creation of value from operations as part of the periodic change operations as part of the periodic change in the value of operating invested assets in in the value of operating invested assets in place. place.

EVA = (rate of return - cost of capital) x EVA = (rate of return - cost of capital) x economic capitaleconomic capital

Non-financial performance Non-financial performance measuresmeasures

Nonfinancial factors relate to the Nonfinancial factors relate to the following functionsfollowing functions (more commonly (more commonly used in Europe)used in Europe) – manufacturing and productionmanufacturing and production – sales and marketingsales and marketing – peoplepeople – research and developmentresearch and development

EFQMEFQM

Very used and popular in Czech RepublicVery used and popular in Czech RepublicResults Orientation Results Orientation CCustomer Focusustomer FocusLeadership & Constancy of PurposeLeadership & Constancy of PurposeManagement by Processes & FactsManagement by Processes & FactsPeople Development & InvolvementPeople Development & InvolvementContinuous Learning, Innovation & Improvement Continuous Learning, Innovation & Improvement Partnership DevelopmentPartnership DevelopmentCorporate Social ResponsibilityCorporate Social Responsibility

Financial IndicatorsFinancial Indicators

EPS, Price-Earnings Ratio, Return on EPS, Price-Earnings Ratio, Return on AssetsAssets

Long-term indicatorsLong-term indicators– Times interest earned, debt-to-equity Times interest earned, debt-to-equity

Short-term indicatorsShort-term indicators– Current ratio, quick ratio, A/R turnover, Current ratio, quick ratio, A/R turnover,

inventory turnoverinventory turnover

MillerMillerSABMiller’s Strategy

Drive Volume and Productivity

Optimize and expand existing positions

Grow its brands in the international premium beer segment

MainstreamMalt Liquors

Worthmore

Economy

Balanced ScorecardBalanced Scorecard

Balanced ScorecardBalanced Scorecard

Four Performance MeasuresFour Performance Measures– FFinancial perspective (the company’s bottom line),inancial perspective (the company’s bottom line),– CCustomer perspective (customer satisfaction, ustomer perspective (customer satisfaction,

retention percentage, number of customer retention percentage, number of customer complaints)complaints)

– IInternal business process perspective (reduce nternal business process perspective (reduce delivery time to customers)delivery time to customers)

– LLearning and growth perspective (employee turnover earning and growth perspective (employee turnover rates and employee suggestions implemented)rates and employee suggestions implemented)

Must utilize overall company strategy Must utilize overall company strategy

SABMillerSABMiller

EBITAEBITA– Volume, Pricing, Price PromotionsVolume, Pricing, Price Promotions– Brand, Package, and Geographic mixBrand, Package, and Geographic mix– Cost of salesCost of sales– Fixed Marketing ExpensesFixed Marketing Expenses

Marginal Contribution/barrelMarginal Contribution/barrel– Sales minus price promotions, excise taxes, Sales minus price promotions, excise taxes,

cost of sales, and diversionscost of sales, and diversions

Skoda Machine Tool Ltd. Skoda Machine Tool Ltd.

ŠKODA concentrates its efforts on developing highly ŠKODA concentrates its efforts on developing highly sophisticated machines with NC systemssophisticated machines with NC systems

The conceptual solution of the ŠKODA machine tools The conceptual solution of the ŠKODA machine tools makes it possible to design complete workstations for makes it possible to design complete workstations for special technological purposesspecial technological purposes

ŠKODA stresses permanent technical development. ŠKODA stresses permanent technical development.

Skoda Machine ToolSkoda Machine Tool

Horizontal boring machinesHorizontal boring machines– IFVW 206IFVW 206

– UFK 1000 NCUFK 1000 NC

– IWD 700 AIWD 700 A

– IFVW 102IFVW 102

– IFVW 112IFVW 112

– IFVW 203IFVW 203

Lathers Lathers

Special Machine TOOLSSpecial Machine TOOLS

– Clamping floor platesClamping floor plates

– Special machining centersSpecial machining centers

– Rotary tablesRotary tables

Practical methods used byPractical methods used bySkodaSkoda

Breakeven analysisBreakeven analysis

Financial indicatorsFinancial indicators

Non-financial indicatorsNon-financial indicators

Marginal contributionMarginal contribution

Management Management Accounting Accounting methodmethod

SAB MILLERSAB MILLER SKODA SKODA MACHINE MACHINE TOOL, Ltd.TOOL, Ltd.

Marginal ContributionMarginal Contribution xx xx

EBITAEBITA xx

Break Even AnalysisBreak Even Analysis xx xx

Financial IndicatorsFinancial Indicators xx xx

Non – Financial IndicatorsNon – Financial Indicators xx

EVAEVA xx

BSCBSC xx

SAP (information system)SAP (information system) xx xx