Accounting is subdivided into financial accounting and managerial accounting. Finance has traditionally been thought of as the area of financial management that is responsible for the acquisition and disposition of the financial resources. Financial accounting is a formalized system designed to record the financial history of the firm. The financial accountant is a historian who records the financial history of the firm. Part of the financial accountant's job is to report the firm's history from time to time to interested individuals, through the firm's annual and quarterly financial statements.
Managerial accounting looks forward while financial accounting looks backward.
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.