Chapter 7: Managerial Analytics

Question 1

(perform test plan)
descriptive

Answer 1

summarize activity or master data based on certain attributes to adress questions of:
“what happened”

Question 2

(perform test plan)
diagnostic

Answer 2

detect correlations and patters of interest and compare to benchmark
“why did it happen?”

Question 3

(perform test plan)
predictive

Answer 3

identify common attributes on patterns that may used to forecast similar activity to address
“will it happen in the future?”

Question 4

(perform test plan)

Answer 4

prescriptive
recommend action base on previously observed actions
“what should we do based on what we expect will happen?”

Question 5

common management accounting questions

and example of the 2 concepts (analysis)

Answer 5

(1) What are the relevant costs?
opportunity cost (relevant) vs sunk costs (irrelevant)
fixed, variable or mixed cost classification

(2) What preformance metrics do we use?
financial vs non-financial
KPI’s are the most important performance metrics

varience analysis

cost behaviour analysis

Question 6

explain varience analysis

Answer 6

–> HIGHLIGHTS ARES OF UNDER AND OVER PERFORMANCE, MANAGERS CAN INVESTIGATE ROOT CAUSES AND TAKE ACTION
–> evaluate KPI’s and how far from expected outcome

budget vs actual: compares these 2 to asses performance
we have favorable variance and unfavorable variance (better/worse than expected)

bullet charts visualizes each variance relative to target

Question 7

explain cost behaviour analysis

Answer 7

need for managers to understand cost drivers + their influence

managers can use predictive anal to estimate cost behaviour

managers use cost equations to forecast future cost at different level and make decisions

Question 8

What is a digital dashboard?

Answer 8

interactive visual report that displays an organizations most important metrics in one place

• multiple data srouces, visualizations
• allows managers to continuously monitor KPI’s

Question 9

explain BALANCED SCORECARD-framework

Answer 9

() FINANCIAL STEWARDSHIP
= how do we create value for stakeholders? (roi)
“financial performance”

() CUSTOMER/STAKEHOLDER
= how do we deliver value to customers and how they precieve us?

() INTERNAL BUSINESS PROCESS
= how efficient and effective are our internal operations

() ORGANIZATIONAL CAPACITY
= how are we improving and developing for the future?

–> framework breaks performance into 4 perpectives, company will set objective and KPI’s for each category