Question

How are financial statements used to evaluate business activities? What is managerial accounting and how does it help businesses create a competitive advantage? 
What skills must be developed to evaluate company performance? 
How are investment and operations alternatives evaluated and selected? 
 minimum of 500 words

Answer 1

Solution. An organization decides to operate its activities in order to achieve its pre-determined goals/objectives. In order to sustain in today's competitive economic market, an organization needs to lay plans and strategies in order to meet its goals effectively and efficiently. And to achieve social responsibility, activities are recorded and analyzed in order to present true financial position of an organization to its stakeholders, customers and society at large. An organization prepares namely- Profit & Loss Statement, Balance Sheet, Statement of Cash Flows and Statement of Shareholder's Equity adhered to accounting principles and policies. Such statements provide insights into past, present and future performance and return on investment for carrying business activities. Mainly analyzed by techniques namely- Horizontal, Vertical and Ratio Analysis to facilitate in decision making purpose.

Managerial accounting encompasses identification, analysis and control of statements and reports to facilitate in decision making by internal management to minimize variation and meet organizational goal. It provides strategic management of businesses profile over competitor's. The process involves calculating margin and constraint analysis to read break-even point and major bottlenecks. It also facilitates in designing investment appraisal, calculating or forecasting trends and valuation objectives keeping in head competitor's moves.

A company's performance depends on its workforce. Management aims in aligning individual's objectives with that of organization's objectives. Proper workforce management through individual level communication and understanding trends helps in preventing hindrance. To improve or motivate communication among workforce should be taken. In order to improve performance, steps to upgrade and maintain marketing skills and sales skills in order to reach society at large with all its benefits to increase sales growth and targets. Value development among workforce to increase motivation to meet organizational goals and objectives. To reach or expand in market size, business needs to lay business development model and reach its workforce. Sales skills should not just end in turning goods in cash but also provide with after sales service by appointing qualifying leads and improving customer relationships and work on feedbacks generated thereafter. Communication skills come with ability to make suitable negotiations. Businesses can appoint intelligence skills workforce to provide with business and markets insights and potential business improvement. In order to gain stakeholder's interests and confidence managing returns and data are crucial for a business. It should comply with laid rules and regulations in order to trace position and boost its future activities.

A business in order to sustain needs to meet its objectives in an effective and efficient manner. A business evaluates its strategy, quality and economic aspects while evaluating and deciding up with alternatives keeping in mind environment and superfund records of decision. To plan, initialize and identify alternatives and review the process chosen. This process can be undertaken in different ways as proposed by fuzzy equivalent uniform annual worth method by ranking, time value of money principles by taking into account prevalent input interest rate, analysis of alternatives(AoA) by taking suitability, effectiveness, risk and life cycle cos, capital budgeting in capital investment analysis and selects one with highest return on funds invested.