Executive Post Graduate Diploma in Management

Subject Outline

Subject Name Management Accounting and Analysis

Subject Code MGT402
Subject Credits 3
Instructor
Office Hours By Appointment only

This subject aims to create a good understanding of the

financial statements and the other components of the Annual
Report. It focuses mainly on various tools for analysis and
interpretation like ratio analysis, and cash flow analysis. In
addition it also introduces to the students, the tools for
decision making such as cost-volume profit analysis and the
applications of marginal costing. It provides an overview of
the control techniques such as budgetary control, standard
costing and variance analysis.
Summary/Overview
Since, cost control and cost reduction have assumed greater
significance in view of the recent recession elsewhere in the
world and the consequent slowdown in our own country,
understanding cost concepts, costing methods and
techniques, dissemination of costing information have
become integral part of reporting. Hence, the subject also
covers the various elements of cost, the methods of costing,
with reference to different industries and also the costing
techniques such as activity based costing.

Aims The subject has been designed to enable the student to

acquire the skills necessary to use, interpret and analyze
accounting data. The ultimate objective is to enable the
student to become a better manager.
 The student should:

 Understand how to furnish information about the

firm's economic resources, claims against those
resources, owners’ equity, and changes in resources
and claims
 Understand how cost control achieve the targeted cost
objectives through the realization of predetermined
cost targets to reduce costs
 Understand the significance of cost control.
Understand the various tools and techniques of
costing.
 Understand the functions of each responsibility center
within an organization and what are the inter-linkages
between those centers
 Be able to identify financial strengths and weaknesses
of a business through appropriate analysis

Core Learning Outcomes

Learning Outcomes Assessment Criteria
To achieve the learning outcome you must
On completion of this unit you should be able to: demonstrate the ability to:
1. Understand and significance and importance
of Accounting. What are the elements that go
into preparation of financial statements.
What are the salient features and differences
between Financial and Management
accounting. Get an insight into international
accounting standards.
The students will be evaluated based on the
conceptual understanding of the learning
objectives and Learn how to read and
understand financial statements and to
observe the effects of routine business
transactions on them. In the examination
how accounting can be viewed as an
information system

Students will be evaluated on their

2. Understand the components of all three forms understanding and interpretation of
of financial statements, viz. Income financial statements.
Statement, Balance Sheet and Cash Flow
Statement. Be able to read financial
statement of a company and make sense out
of it. The students will be evaluated through
liquidity, capital structure, profitability,
3. Be able to compute various ratios and turnover and market ratio calculation of
compare them across companies or within a different Ratios. Interpretation of the
company across horizontally or vertically same.
with the aid of tools such as Excel.
Students will be evaluated on the costing
method used, cost sheet, different type of
4. Understand various types of costing. What is cost, tender and quotations, cost centers,
the importance of diligent costing in cost units.
achieving better pricing and hence better
profitability? Analytical & conceptual
understanding of CVP & BEP.
Case presentation, original interpretation of
their observations from publicly available
5. The proof of understanding is in one’s ability financial statements.
to apply the knowledge. Students should be
able to take up any company of their choice,
analyze critically based on their learning.

1. Lectures
Approach to Learning 2. Student presentation and class room
exercises
3. Group discussion
4. Case Analysis
Participants will be assessed on both
Assessment Strategy conceptual understanding and business
application of Management Accounting
 subject by way of:
 Participation in the class discussions
 Case study discussions & solving
examples in the class
 Submission of assignments
 Written Exam
Submission
Weigh Learning Outcomes day/week
Assessment Description of
No t Assessed (assignments) or
Method* Assessment Method
% length (exam)
1 2 3 4
1 PF Class Participation 10% X X Weekly
2 CS Case Study 20% X X Two case studies
per term
3 DTA Assignments 20% X One Assignments
per term
4 EX Exam 50% X Term end Exam

*The following codes for assessment methods apply:-

LR literature review PC practical
CB computer-based PF performance
CS case study PL placement
DI dissertation or project PO portfolio
EX exam PR presentation
GR group report RE individual report
DTA during term test OR oral
OT other
Outline Teaching Schedule

Session Session Topics

1, 2, & 3 INTRODUCTION TO ACCOUNTING

Meaning, Basic Concepts, Principles of Accounting, Accounting Equation,
Double entry system of accounting, Accounting Mechanism Journal, Ledger,
Trial balance, Capital & Revenue items and Depreciation. Financial Accounting
vs. Management Accounting. ( Theory and Problems)

ACCOUNTING STANDARDS: Accounting Standards, Introduction to Ind –

4 AS, International accounting standards such as GAAP & IFRS. ( Theory)

5&6 COMPANIES FINAL ACCOUNTS : Introduction, Meaning, types and

characteristics of companies, Profit and loss statement and balance sheet in detail
as per the revised schedule VI of Companies Act of 2013 ( Only theory), Off
Balance sheet items, Treatment of events occurring after Balance sheet.

7&8 ANALYSIS AND INTERPRETATION OF FINANCIAL STATEMENTS

Ratio Analysis – Meaning of ratio, classification of ratios, Liquidity ratios,
capital structure or solvency ratios, turnover or activity ratios, Profitability
ratios, Advantages and Limitations of ratio analysis and its computations (Case
study and Practical)

9 CASH FLOW STATEMENTS: Meaning of Cash Flow statements, Meaning

of cash flow, Classification of cash flows (AS-3), Significance of cash flow
statement in reporting Treatment of items, preparation of Cash Flow statements,
objectives and uses of cash flow statements and its computations. (Case study
and Practical)

10 INTRODUCTION TO COST CONCEPTS AND COST ACCOUNTING:

Concept of cost, cost centre, cost unit, methods and Technique of costing,
Classification o costs, Elements of costs, Cost control and Cost reduction.
(Theory).
Marginal Costing: Meaning of marginal cost, marginal costing, CVP analysis
and Break even analysis, Contribution and P/V ratio, Margin of safety, Key
factors.
Recommended Resources
Essential Readings

1. Managerial Acct - 2nd Edition - Sawyers/ Jackson/ Jenkins/ Arora - Cengage.

Reference Materials

1. Cost and Management Accounting by Colin Drury., Cengage Learning

2. Introduction to Management Accounting by Charles Horngreen et al., Prentice Hall.
3. Financial Accounting by B.S.Raman
4. Management Accounting Text, Problems and Cases by Khan and Jain (Latest Edition) Tata
McGraw-Hill Publications
5. Advanced Financial Management by Dr. S. N. Maheshwari Published by Sultan Chand and Sons,
2007 edition.
6. Cost and Management Accounting, by M. N. Arora, 9th Edition, Vikas Publishing House
7. ICAI e-Journal
8. CIMA Financial Management Magazine