ACC-1A Lecture Notes - Lecture 17: Balanced Scorecard, Business Process, Customer Relationship Management
Document Summary
Ratios need to be considered in the context of (and compared to): Ratios are based on accounting numbers in financial statements, i. e. past, historical, year-end information. It is important to ensure financial reporting quality (as part of corporate governance) If only one or none of the figures of the ratio changes, then the change in ratio would be clear. However, if both figures increase by the same amount: If the ratio is initially less than 1, then the ratio would increase (towards 1) If the ratio is initially more than 1, then the ratio would decrease (towards 1) If both figures decrease by the same amount: If the ratio is initially less than 1, then the ratio would decrease. If the ratio is initially more than 1, then the ratio would increase. Management accounting are the procedures, practices and methods employed by an organisation"s management to ensure the effective use of its resources.
