What the Best MBAs Know by Peter Navarro

Author:Peter Navarro
Language: eng
Format: epub
Publisher: McGraw Hill LLC
Published: 2005-01-15T00:00:00+00:00

Other Critical Success Factors

Financial statements certainly do not tell us everything we want to know about an organization. A complete analysis must take into account various critical success factors. Which revenues and expenses are likely to recur? That is, which earnings are sustainable into the future? Economic indicators, other industry indicators, and organizational information that may not be contained in the financial statements must also be examined. That is where macroeconomics, managerial economics, finance, and organizational behavior can come into play.

The point is that the financial statements do not tell the whole story. They report only past events. They do not report market values. They are based on judgments and estimates. Nevertheless, they provide extremely important information.

In the next chapter, you will discover how those executives and managers internal to the organization are able to use accounting data in strategic planning, budgeting, and operational control. Note, however, that even though financial and managerial accounting are often treated as separate disciplines—and treated in many business schools as separate courses—they are highly interrelated.

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