Understanding how well the organization has performed, at a more detailed level than the overall view provided by the income statement
May be broken down in many ways:
By geographic region
By product
By department, team or division
By customer
Mgmt reporting allows mgmt. to understand how well the organization has performed, at a more detailed level than the overall income statement
Broken down in many ways:
This is an example of a management report – broken down by division. We can see the financial results for the total company and also broken down.
Qs: Why might this be useful for management?
Helps management focus on areas that may be having problems
Helps executives manage and control operations from afar
Management reporting typically raises questions
Deeper analysis is usually needed to figure out the answers
- Helps management focus on areas of the organisation that may be having problems
Examples
-Why is region 1 doing 10% worse in sales growth than all the other regions?
-Why has the HR department spent more than 50% of their full year budget when it is only the end of the second month?
- Helps control and manage from afar
- It is important to note that mgmt. reporting typically just raises questions – need to do a deeper analysis to figure out the answers