Financial Accounting vs. Managerial Accounting: A Detailed Analysis

This report analyzes the differences between financial and managerial accounting, focusing on how internal and external users utilize financial statements. The report examines the income statement, balance sheet, and cash flow statement from Walmart's 2017 annual report, discussing how investors and shareholders use these statements to make investment decisions, while employees use them to evaluate job stability. The report also highlights the distinct audiences and purposes of financial and managerial accounting, emphasizing the different ways accounting information is used for internal decision-making versus external reporting. It also includes references to support the analysis of the topic.

Finance

FINANCE 1
Part 1
Income Statement
Balance Sheet

FINANCE 2
Cash Flow Statement

FINANCE 3
(Sources: Walmart, 2017)
Internal and External Users
External Users:
Investors: Investors are the external users that invest in the company by spending the
large amount on it. Investors analyze the income statement of the company in order to predict the
future ability of the company to generate the profit by evaluating the financial situation of past
years. It uses the income statement to evaluating the ability of the company to generate the profit.

FINANCE 4
Shareholders: Shareholders are also the external users of the company that buy the shares
to raise its capital. Shareholders also use income statement and balance sheet of the company
financial statements to determine its value and return amount they get in future (Quick Books,
2018).
Internal Users
Employees: Employees are the internal users of the company. They also use the balance
sheet and cash flow statements to determine the company expenses as compare to the income in
order to evaluate the stability of job in terms of wages or salary.
Part B
Yes, I do agree that financial accounting is different from managerial accounting in terms
of users as managerial accounting is uses for internal people to give them information about the
company productivity to selling but financial accounting is for external parties to spread the
information of financial situation of the company. But it is also found that there is some
similarity in both the accounting and which the information of financial accounting is. Financial
accounting and managerial accounting provides the accounting information to external and
internal users with the similar motive (Accounting Tools, 2019). Yes, it can be said that the both
the terms have different uses but have similar motives.

FINANCE 5
References
Accounting Tools. (2019) The difference between financial and managerial accounting.
Retrieved From: https://www.accountingtools.com/articles/what-is-the-difference-
between-financial-and-managerial-acco.html
Quick Books. (2018) Common External Users of Financial Statements. Retrieved From:
https://quickbooks.intuit.com/ca/resources/marketing/common-external-users-financial-
statements/
Walmart. (2017) Annual Report 2017. Retrieved From:
http://www.annualreports.com/HostedData/AnnualReportArchive/w/NYSE_WMT_2017.
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