Managerial accounting provides financial information is used to make business decisions. Thus, managerial accounting is oriented toward analyzing financial data for decision making and in forecasting the financial future of the firm. In smaller firms, the same accountants perform both financial and managerial accounting. The primary goal of financial management is the maximization of stockholder wealth, or in other terms, maximization of the firm's profits. Other goals could include-maximization of sales, maximization of market share, maximization of the growth rate of sales, and maximization of the market price of the firm's stock.
Managers are also concerned with their salaries and perks.
Two major goals of financial managers are profitability and viability. The firm wants to be profitable, and it wants to continue in business. In attempting to maximize a firm's profits there is always a tradeoff between profitability and risk. The greater the risk incurred in a decision, the greater the anticipated profit demanded. Frequently, the decision is centered on whether the return on a specific investment is sufficient to justify the risk involved.