Use accounting data and statistical information to measure business performance

Authors Avatar by ashra007 (student)

Asid Ashraf

Unit 7 Management Accounting: P3

Use accounting data and statistical information to measure business performance

Prepare the first section of your report, which describes the general use of data you would use to monitor the performance of Mr Jones’ business.

Previous year’s data regarding sales, costs and profits, can be used initially to determine current performance as it tells you whether the business is growing or not it may well have changed its marketing and pricing strategies and it will want to know whether these have been successful. It may have introduced new products or targeted a new market segment and want to know if sales have improved following these initiatives.

Previous year’s data regarding costs can be used initially to determine current performance because it is very important for businesses to monitors costs such as material, direct labour and any direct expenses to ensure it is aiming at efficiency and cost effectiveness of production. A good way is to compare the costs this year with the same costs last year. The business needs to compare the most recent sales figures with those of previous years to see if it is improving or not. Mr Jones’ business will also need to take account of internal and external factors, which could possibly influence the sales figures and use all the information to plan for the future sales.

Previous year’s data regarding profit can be used initially to determine current performance because businesses will want to know whether or not the business have performed well over the year with regard to the profit it has made. Production costs are direct costs of producing the goods a firm sells for Mr Jones this would include the cost of materials used, the direct labour and any direct expenses. It is highly important for Mr Jones’ business to constantly monitor these costs to ensure it is aiming at efficiency and cost-effectiveness of production.

Join now!

The retail price index (RPI) and the (CPI) are both  in the UK. The UK government's stated policy is to use the consumer price index (CPI) for the indexation of benefits, tax credits and public service pensions, whereas it would use the retail price index (RPI) for the uprating of index-linked gilts and revalorisation of excise duties.

The retail price index, or the RPI, shows the changes in the cost of living. It reflects the movement of prices in a range of goods and services used regularly, such as food, heating, housing, household goods, bus fares and petrol. Items considered ...

This is a preview of the whole essay