Ril

N R Institute of Business Management
Course Design and Session Plan

Management Accounting-I
PGDM (Term-I)
Introduction
It has been found that management accounts are invaluable when it comes to a company creating
important and timely management decisions concerning their business. The main aim of
managerial accounting is to improve the efficiency and quality of operations by providing
program owners and all others with suitable and applicable cost based performance information
to permit for nonstop improvement in distributing the output to outcome the stockholders.
Managerial accounting has been developed and used with all from the beginning times to help all
the directors to understand the costs of running a project. Modern managerial accounting is
created during the industrial revolution during the difficulties of running a large scale business
which show the way to the development of scheme for recording and checking costs to help
business proprietors and managers to finalize and make conclusions.
So it is very essential for a management student to understand the concepts of managerial
accounting.
Course Objectives
1.
To develop an understanding of accounting and enable the students to evaluate the firms
decision areas related to financial accounting & cost accounting.
2.
To familiarize the students with analytical tools & techniques.
3.
To assess risks in order to maximizing profits.
Evaluation
Class Participation
Quizzes
Assignments
End term examination
20%
15%
15%
50%
Quiz:
The students are expected to be prepared for any type of questions during the quiz pertaining to
the subject body discussed so far as per course outline.
The quiz is aimed to keep the participants in-tune with the subject on a continuous basis.
They will be used as the instrument to provide constant feedback to the participants on the basis
of their performance to seek necessary improvements.
Assignment:
At the end of completion of each chapter, the participants will be given the course assignments.
The assignments may pertain to presenting the subject related articles, solving numerical
problems / cases, preparing for a business game or performing given exercises.
Supplementary Readings:
1. Management Accounting : By C.T. Horngren, Gary L. Sundem , William O. Stratton, David
Burgstahler, Jeff Schatzberg, Pearson publication, fourteenth edition
2. Management Accounting : by M.Y.KHAN & P.K.JAIN [Tata McGRAW HILL]
3. Management Accounting :By P. S. Ananthanarayanan [ oxford]
4. Management Accounting : By Debarshi Bhattacharyya, Pearson Publication, Latest
edition
5. Managerial Accounting: By Roby B. Sawyers; Steve Jackson;Greg Jenkins; Ravinder K.
Arora,Cengage Learning India Pvt. Ltd, Latest edition
Session Plan- Term I

Sessions
1 -5
Introductionof
Management
Accounting
6-10
Understanding of
Terminologies &
Concept of
Financial & Cost
Accounting
11-15
Understanding
Financial
Statements&
Reports
Learning Goals
Pre- session
Activity
Compare and contrast

management accounting
information with information
used for financial accounting
& Cost Accounting
Describe the conceptual
framework of accounting.
Describe the qualitative
characteristics of Accounting
information
To understand the difference
between the natural
classifications used in
financial accounts &
functional classification used
in cost accounting
Briefing of main
points of the
next session
Understanding how Corporate

accounts are prepared
Preparation of Corporate
Financial Statements
21-25
Financial
Statement
Analysis
Common size &
Comparative
Statement
Analysis
Calculate and interpret

common size & comparative
financial statements.
Describe the main sub totals
of income on a multi step
income statement.
Chapter 1 from C.T.

Horngren, Gary L. Sundem ,
William O. Stratton, David
Burgstahler, Jeff Schatzberg
Chapter 2 & 15 from C.T.

Describe the steps of the

accounting cycle.
Understanding how
T-accounts & debits & credits
are used in double entry
accounting system.
Describe the types of
information usually disclosed
along with the financial
statements.
16-20
Preparation of
Corporate
Financial
Statements
Pre-Reads

Briefing of main
points of the
next session
Briefing of main
points of the next
session

Chapter 17 from C.T.
Session Plan of Sums
Understanding
Financial
Statements&
Reports
Preparation of
Corporate
Financial
Statements
Financial
Statement
Analysis
Marginal Costing
& CVP Analysis
T-Accounts
Directors Report
Management Discussion &
Analysis report
Corporate Governance
Report
Auditors Report
Corporate Accounts as per
Revised Standard
Horizontal Analysis
Vertical Analysis
Trend Analysis
Comparative Study
P V Ratio, BEP , MOS,
Desired Profit, Required
Sales
Total 7 sums
( from text book &
other reference books)

Total 7 sums
( from text book
&other reference
books)
Total 6 sumsfrom text
book & other
reference books)

Chapter 17 from C.T.
Total 16 sums from

text book & other
reference books
Chapter 2 from C.T.

Chapter 1 from C.T.
Introductionof
Management
Accounting
Comparison of
Management
accounting/Financial
Accounting/Cost
Accounting
Theory
Understanding of
Terminologies &
Concept of
Financial & Cost
Accounting
classifications used in
financial accounts &
functional classification used
in cost accounting
Theory

Mar '15
Mar '14
Mar '13
Mar '12
Mar '
12 mths
12 mths
12 mths
12 mths
12 mt
Total Share Capital
3,236.00
3,232.00
3,229.00
3,271.00
3,273.
Equity Share Capital
3,236.00
3,232.00
3,229.00
3,271.00
3,273.
17.00
17.00
25.00
0.00
9.
Sources Of Funds
Share Application Money

Preference Share Capital
0.00
0.00
0.00
0.00
0.
Reserves
212,923.00
193,842.00
175,711.00
159,698.00
142,800.
Networth
216,176.00
197,091.00
178,965.00
162,969.00
146,082.
2,036.00
10,744.00
2,422.00
6,949.00
10,104.
87,105.00
74,737.00
52,101.00
51,678.00
53,324.
Secured Loans
Unsecured Loans
Total Debt
Total Liabilities
89,141.00
85,481.00
54,523.00
58,627.00
63,428.
305,317.00
282,572.00
233,488.00
221,596.00
209,510.
Mar '15
Mar '14
Mar '13
Mar '12
Mar '
12 mths
12 mths
12 mths
12 mths
12 mt
205,638.00
194,542.00
187,607.00
182,946.00
203,686.
0.00
0.00
1,055.00
3,127.00
5,467.
Application Of Funds
Gross Block
Less: Revaluation Reserves
Less: Accum. Depreciation
Net Block
Capital Work in Progress
Investments
Inventories
Sundry Debtors
91,075.00
85,136.00
77,859.00
69,223.00
60,979.
114,563.00
109,406.00
108,693.00
110,596.00
137,240.
75,753.00
41,716.00
19,116.00
7,754.00
12,228.
112,573.00
86,062.00
52,509.00
54,008.00
37,652.
36,551.00
42,932.00
42,729.00
35,955.00
29,825.
4,661.00
10,664.00
11,880.00
18,424.00
17,442.
Cash and Bank Balance
11,571.00
36,624.00
49,547.00
39,598.00
27,135.
Total Current Assets
52,783.00
90,220.00
104,156.00
93,977.00
74,402.
Loans and Advances
42,113.00
40,179.00
32,982.00
25,678.00
17,730.
0.00
0.00
0.00
0.00
0.
94,896.00
130,399.00
137,138.00
119,655.00
92,132.
Fixed Deposits
Total CA, Loans & Advances
Deferred Credit
Current Liabilities
Provisions
0.00
0.00
0.00
0.00
0.
86,210.00
80,844.00
79,620.00
66,159.00
65,141.
6,258.00
4,167.00
4,348.00
4,258.00
4,601.
Total CL & Provisions
92,468.00
85,011.00
83,968.00
70,417.00
69,742.
Net Current Assets
2,428.00
45,388.00
53,170.00
49,238.00
22,390.
Miscellaneous Expenses
Total Assets
Contingent Liabilities
Book Value (Rs)
0.00
0.00
0.00
0.00
0.
305,317.00
282,572.00
233,488.00
221,596.00
209,510.
80,641.00
75,955.00
54,600.00
54,075.00
56,305.
668.05
609.78
554.22
498.21
446.
Balance Sheet of Reliance Industries
------------------- in Rs. Cr. -------------------
Profit & Loss account of Reliance Industries
------------------- in Rs. Cr. ------------------Mar '15
Mar '14
Mar '13
Mar '12
Mar '11
12 mths
12 mths
12 mths
12 mths
12 mths
340,814.00
401,302.00
371,119.00
339,792.00
258,651.00
Income
Sales Turnover
Excise Duty
Net Sales
Other Income
Stock Adjustments
11,738.00
11,185.00
10,822.00
9,888.00
10,481.00
329,076.00
390,117.00
360,297.00
329,904.00
248,170.00
8,721.00
8,936.00
7,998.00
6,192.00
3,052.00
-1,943.00
-412.00
3,317.00
872.00
3,243.00
335,854.00
398,641.00
371,612.00
336,968.00
254,465.00
267,834.00
334,283.00
310,428.00
279,737.00
198,076.00
12,299.00
10,153.00
7,166.00
4,094.00
2,255.00
Employee Cost
3,686.00
3,370.00
3,354.00
2,862.00
2,624.00
Other Manufacturing Expenses
2,692.00
1,985.00
2,258.00
2,731.00
2,612.00
0.00
0.00
0.00
0.00
0.00
9,020.00
9,037.00
9,621.00
7,733.00
7,720.00
0.00
0.00
0.00
0.00
0.00
295,531.00
358,828.00
332,827.00
297,157.00
213,287.00
Mar '15
Mar '14
Mar '13
Mar '12
Mar '11
12 mths
12 mths
12 mths
12 mths
12 mths
Operating Profit
31,602.00
30,877.00
30,787.00
33,619.00
38,126.00
PBDIT
40,323.00
39,813.00
38,785.00
39,811.00
41,178.00
Total Income
Expenditure
Raw Materials
Power & Fuel Cost
Selling and Admin Expenses

Preoperative Exp Capitalised
Total Expenses
Interest
PBDT
Depreciation
2,367.00
3,206.00
3,036.00
2,667.00
2,328.00
37,956.00
36,607.00
35,749.00
37,144.00
38,850.00
8,488.00
8,789.00
9,465.00
11,394.00
13,608.00
Other Written Off
0.00
0.00
0.00
0.00
0.00
Profit Before Tax
29,468.00
27,818.00
26,284.00
25,750.00
25,242.00
0.00
0.00
0.00
0.00
0.00
29,468.00
27,818.00
26,284.00
25,750.00
25,242.00
6,749.00
5,834.00
5,281.00
5,710.00
4,956.00
22,719.00
21,984.00
21,003.00
20,040.00
20,286.00
Extra-ordinary items
PBT (Post Extra-ord Items)
Tax
Reported Net Profit
Total Value Addition

Preference Dividend
Equity Dividend
Corporate Dividend Tax
27,697.00
24,545.00
22,399.00
17,420.00
15,211.00
0.00
0.00
0.00
0.00
0.00
2,944.00
2,793.00
2,628.00
2,531.00
2,385.00
615.00
475.00
447.00
410.00
387.00
32,356.89
32,319.02
32,286.63
32,710.59
32,733.74
70.21
68.02
65.05
61.26
61.97
Per share data (annualised)

Shares in issue (lakhs)
Earning Per Share (Rs)
Equity Dividend (%)
100.00
95.00
90.00
85.00
80.00
Book Value (Rs)
668.05
609.78
554.22
498.21
446.25
Source : Dion Global Solutions Limited
Consolidated Balance Sheet of Reliance
------------------- in Rs. Cr. -------------------
Industries
Mar '15
Mar '14
Mar '13
Mar '12
Mar '11
12 mths
12 mths
12 mths
12 mths
12 mths
Total Share Capital
2,943.00
2,940.00
2,936.00
2,979.00
2,981.00
Equity Share Capital
2,943.00
2,940.00
2,936.00
2,979.00
2,981.00
Share Application Money
17.00
17.00
25.00
0.00
9.00
Preference Share Capital
0.00
0.00
0.00
0.00
0.00
Init. Contribution Settler
0.00
0.00
0.00
0.00
0.00
Preference Share Application Money
0.00
0.00
0.00
0.00
0.00
Employee Stock Opiton
0.00
0.00
0.00
0.00
0.00
Reserves
214,712.00
194,882.00
177,433.00
162,726.00
145,027.00
Networth
217,672.00
197,839.00
180,394.00
165,705.00
148,017.00
10,460.00
14,186.00
2,509.00
7,090.00
9,962.00
Sources Of Funds
Secured Loans
Unsecured Loans
138,282.00
119,622.00
86,813.00
75,545.00
70,026.00
Total Debt
148,742.00
133,808.00
89,322.00
82,635.00
79,988.00
Minority Interest
3,038.00
959.00
949.00
799.00
802.00
Policy Holders Funds
0.00
0.00
0.00
0.00
0.00
Group Share in Joint Venture
0.00
0.00
0.00
0.00
0.00
369,452.00
332,606.00
270,665.00
249,139.00
228,807.00
Mar '15
Mar '14
Mar '13
Mar '12
Mar '11
Total Liabilities
12 mths
12 mths
12 mths
12 mths
12 mths
252,416.00
229,835.00
213,822.00
210,407.00
220,562.00
827.00
848.00
1,661.00
3,740.00
6,085.00
95,958.00
88,418.00
80,335.00
71,593.00
62,462.00
Net Block
155,631.00
140,569.00
131,826.00
135,074.00
152,015.00
Capital Work in Progress
166,462.00
91,494.00
49,952.00
25,363.00
28,174.00
Investments
76,451.00
61,325.00
42,848.00
38,596.00
21,596.00
Inventories
53,248.00
55,997.00
54,601.00
46,692.00
38,520.00
5,315.00
9,411.00
9,750.00
16,939.00
15,696.00
Application Of Funds
Gross Block
Less: Revaluation Reserves
Less: Accum. Depreciation
Sundry Debtors
Cash and Bank Balance
12,545.00
37,984.00
50,456.00
40,731.00
30,139.00
Total Current Assets
71,108.00
103,392.00
114,807.00
104,362.00
84,355.00
Loans and Advances
34,007.00
31,215.00
21,263.00
20,056.00
15,294.00
Fixed Deposits
Total CA, Loans & Advances
0.00
0.00
0.00
0.00
0.00
105,115.00
134,607.00
136,070.00
124,418.00
99,649.00
Deferred Credit
0.00
0.00
0.00
0.00
0.00
127,261.00
90,653.00
84,943.00
69,488.00
67,671.00
6,946.00
4,736.00
5,088.00
4,824.00
4,956.00
Total CL & Provisions
134,207.00
95,389.00
90,031.00
74,312.00
72,627.00
Net Current Assets
-29,092.00
39,218.00
46,039.00
50,106.00
27,022.00
Minority Interest
0.00
0.00
0.00
0.00
0.00
Group Share in Joint Venture
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
369,452.00
332,606.00
270,665.00
249,139.00
228,807.00
75,166.00
63,712.00
33,135.00
31,141.00
32,119.00
739.48
672.97
614.27
556.30
496.50
Current Liabilities
Provisions
Total Assets
Contingent Liabilities
Book Value (Rs)
Key Financial Ratios of Reliance Industries
Mar '15
Mar '14
Mar '13
Mar '12
Mar '
Face Value
10.00
10.00
10.00
10.00
Dividend Per Share
10.00
9.50
9.00
8.50
8.0
Operating Profit Per Share (Rs)
97.67
95.54
95.36
102.78
116.4
1,017.02
1,207.08
1,115.93
1,008.55
758.1
--
--
--
--
Investment Valuation Ratios
Net Operating Profit Per Share (Rs)

Free Reserves Per Share (Rs)
10.0
Bonus in Equity Capital
65.15
65.24
65.30
64.46
64.4
Operating Profit Margin(%)
9.60
7.91
8.54
10.19
15.3
Profit Before Interest And Tax Margin(%)
6.84
5.53
5.78
6.61
9.7
Gross Profit Margin(%)
7.02
5.66
5.91
6.73
9.8
Cash Profit Margin(%)
9.23
7.71
8.27
9.35
13.4
Adjusted Cash Margin(%)
9.23
7.71
8.27
9.35
13.4
Net Profit Margin(%)
6.90
5.63
5.82
6.07
8.1
Adjusted Net Profit Margin(%)
6.72
5.50
5.70
5.96
8.0
Return On Capital Employed(%)
10.42
10.97
12.55
12.82
13.1
Return On Net Worth(%)
10.51
11.15
11.73
12.29
13.8
Adjusted Return on Net Worth(%)
10.51
11.15
11.73
12.29
13.8
Return on Assets Excluding Revaluations
668.05
609.78
554.22
498.21
446.2
Return on Assets Including Revaluations
668.05
609.78
557.49
507.77
462.9
10.88
11.94
13.21
13.46
13.9
Current Ratio
0.89
1.11
1.43
1.46
1.1
Quick Ratio
0.63
1.03
1.12
1.19
0.8
Debt Equity Ratio
0.41
0.43
0.30
0.36
0.4
Long Term Debt Equity Ratio
0.35
0.32
0.24
0.29
0.3
13.45
9.68
9.66
10.66
11.8
0.41
0.43
0.30
0.36
0.4
Financial Charges Coverage Ratio
17.04
12.42
12.78
14.93
17.6
Financial Charges Coverage Ratio Post Tax
14.18
10.60
11.04
12.79
15.5
9.32
9.35
8.69
9.45
8.6
42.95
34.61
23.78
18.40
17.0
Investments Turnover Ratio
9.32
9.35
8.69
9.45
8.6
Fixed Assets Turnover Ratio
1.93
2.36
2.24
2.10
1.6
Total Assets Turnover Ratio
1.22
1.54
1.74
1.68
1.5
Asset Turnover Ratio
1.12
1.51
1.57
1.50
1.2
Average Raw Material Holding
--
--
--
--
Average Finished Goods Held
--
--
--
--
16.13
53.44
65.70
67.60
49.6
Material Cost Composition
81.38
85.68
86.15
84.79
79.8
Imported Composition of Raw Materials Consumed
90.96
89.68
90.75
91.54
91.7
Profitability Ratios
Return on Long Term Funds(%)

Liquidity And Solvency Ratios
Debt Coverage Ratios

Interest Cover
Total Debt to Owners Fund
Management Efficiency Ratios

Inventory Turnover Ratio
Debtors Turnover Ratio
Number of Days In Working Capital

Profit & Loss Account Ratios
Selling Distribution Cost Composition

Expenses as Composition of Total Sales
--
--
--
--
63.63
66.99
63.30
60.16
56.6
12.95
12.70
12.51
12.62
11.7
9.43
9.07
8.62
8.05
7.0
Cash Flow Indicator Ratios

Dividend Payout Ratio Net Profit
Dividend Payout Ratio Cash Profit
Earning Retention Ratio
87.05
87.30
87.49
87.38
88.2
Cash Earning Retention Ratio
90.57
90.93
91.38
91.95
92.9
2.86
2.78
1.79
1.87
1.8
Mar '15
Mar '14
Mar '13
Mar '12
70.21
68.02
65.05
61.26
61.9
668.05
609.78
554.22
498.21
446.2
AdjustedCash Flow Times
Earnings Per Share

Book Value
Corpora
te Action
Board
Meetings
AGM/EG
M
Bonus
Rights
Splits
Dividends
History
Information
Financials
Company
Balance
Sheet
Annual
Report
Directors
Listing Info
Profit & Loss Report
Chairman's
Locations
Quarterly
Speech
Results
Bulk Deals
Auditors
Half Yearly
Large Deals
Report
Results
Shareholding
Notes to
Nine Monthly
MF Holding
Accounts
Results
Top
Finished
Yearly Results
Shareholders
Goods
Cash Flow
Promoter
Raw
Ratios
Holding
Materials
Background
Board of
Directors
Capital
Structure
Peer Comparison
Competition
Price
Price Performance
Market Cap
Net Sales
Net Profit
Total Assets
Historical Prices
Price of Reliance on
previous budgets
Mar '
Operating Profit & OPM

Operating Profit gives an indication of the current operational profitability of the business and
allows a comparison of profitability between different companies after removing out expenses that
can obscure how the company is really performing.
Interest cost depends on the management's choice of financing, tax can vary widely depending on
acquisitions and losses in prior years, and depreciation and amortization policies may differ from
company to company.
Reliance Industries Limited

Financial Year 2009-10
Cost Statement
Particulars
(Figures in Crores)
Amount
Amount
Rs.
Rs
Raw Material Consumed
147,919.21
Direct/Production Wages
Allocated @ 50% of total Employee Cost (50% of Rs. 2350.38)
1,175.19
Direct Expenses
Factory Depreciation
Allocated at 20% of Total Depreciation (20% of Rs. 10496.53)
Prime Cost
2,099.31
151,193.71
Factory Overheads
Depreciation on assets other than used in manufacturing
Allocated @ 40% of total depreciation (40% of 10496.53)
Employee Cost-Factory Salary
4,198.61
470.08
Stores, Chemicals and Packing Material
2,773.98
Electricity,Power,Fuel and Water
2,706.71
Machinery Repairs
378.74
Building Repairs
25.22
Labour, Processing,Production royalty,Machinery Hire charges
1,774.93
Excise Duty
369.15
Lease Rent
2.74
Exchange Difference (Net)
(676.42)
12,023.74
Less-Sale of Scrap
Factory Cost
163,217.44
Add-Opening Stock of Stock in Process
2,193.89
Less-Closing Stock of Stock in Process
(2,878.85)
Adjusted Factory Cost
(684.96)
162,532.48
Office/Management/Administration Expense
Depreciation on Office assets
Employee Cost-Office Salary
2,099.31
352.56
Insurance
486.58
Rent
105.15
Rates and Taxes
40.39
Other repairs
256.22
Travelling Expenses
59.72
Payment to Auditors
12.82
Professional fees
524.82
Loss on sale/Discarding of Fixed Assets
29.28
General Expenses
651.96
Investments written Off
18.38
Wealth tax
13.20
Charity and Donations
103.37
4,753.75
Less-Sale of By Product
Cost of Production
167,286.24
Add -Opening Stock of Finished Goods
3,015.13
Less-Closing Stock of Finished Goods
(6,278.06)
Cost of Goods Sold
(3,262.93)
164,023.31
Selling and Distribution Expenses

Depreciation on Selling Department Assets
Employee Cost-Selling and Distribution Staff
2,099.31
352.56
Samples,Sales Promotion and Avertisement expenses
50.49
Brokerage,Discount and Commission
228.02
Warehousing and Distribution Expenses
3,280.49
Sales tax/Vat/Service tax
564.77
6,575.63
Cost of Sales
170,598.94
Profit and Loss
21,862.08
Sales
192,461.02

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N R Institute of Business Management

Course Design and Session Plan

To familiarize the students with analytical tools & techniques.

To assess risks in order to maximizing profits.

4. Management Accounting : By Debarshi Bhattacharyya, Pearson Publication, Latest

Arora,Cengage Learning India Pvt. Ltd, Latest edition

Session Plan- Term I

Compare and contrast

Understanding how Corporate

Calculate and interpret

Chapter 1 from C.T.

Chapter 2 & 15 from C.T.

Describe the steps of the

Chapter 16 & 17 from C.T.

Chapter 16 & 17 from C.T.

Session Plan of Sums

Chapter 16 & 17 from C.T.

Chapter 16 & 17 from C.T.

Total 16 sums from

Chapter 2 from C.T.

Chapter 2 & 15 from C.T.

Total Share Capital

Equity Share Capital

Share Application Money

Cash and Bank Balance

Total Current Assets

Loans and Advances

Total CL & Provisions

Net Current Assets

Balance Sheet of Reliance Industries

------------------- in Rs. Cr. -------------------

Profit & Loss account of Reliance Industries

------------------- in Rs. Cr. ------------------Mar '15

Other Manufacturing Expenses

Selling and Admin Expenses

Other Written Off

Profit Before Tax

Total Value Addition

Per share data (annualised)

Book Value (Rs)

Source : Dion Global Solutions Limited

Consolidated Balance Sheet of Reliance

------------------- in Rs. Cr. -------------------

Total Share Capital

Equity Share Capital

Share Application Money

Preference Share Capital

Init. Contribution Settler

Preference Share Application Money

Employee Stock Opiton

Policy Holders Funds

Group Share in Joint Venture

Capital Work in Progress

Total Current Assets

Loans and Advances

Total CL & Provisions

Net Current Assets

Group Share in Joint Venture

Key Financial Ratios of Reliance Industries

Dividend Per Share

Operating Profit Per Share (Rs)

Investment Valuation Ratios

Net Operating Profit Per Share (Rs)

Bonus in Equity Capital