Micro and macro economic factors affecting Investment

Macro economics factors is the field of economics that studies the behavior of economy as a whole and not on just specific companies , but entire industries and economies.

Micro economic factors closely integrated to the company performance. It is the study of decisions that people and businesses make regarding the allocation of resources and prices of goods and services. This means also taking into account taxes and regulations created by governments. Microeconomics focuses on supply and demand and other forces that determine the price levels seen in the economy. For example, microeconomics would look at how a specific company could maximize it's production and capacity so it could lower prices.

An investor should have well awareness about the performance of the company. Micro economics tightly connect with the product, cost and demand in the market, that should affect the company  and profit to a great extend. Company sales growth, cost of sales, capital allocation, debt increase or decrease, market monopoly all covering under micro economic.

As a value investor, keep avoiding the macro economic factors because it does have nothing to do for us. Keep an eye on such events to get best business in a best price. It is clearly a temporary behavior and would change back to normal. 

 

Any changes in micro economic factors affect to the root of a company and its performance. As a value investor, it is advisable to keep track on a company on the basis of influential micro economic factors like what legend investor Warren Buffet does.

Management Accounting

Managerial Accounting or Management Accounting - Role in Business and Industrial Organizations

Management decision making requires accounting information.

The management process is a series of activities in a cycle of planning and control. Planning involves decision making - the purposeful choice from among a set of alternative courses of action designed to achieve some objective. Control also involves decision to plan a control action. The difference between planning and control decisions is planning is more open ended with less constraints. Control is a more constrained process in which the main objective is achievement of plans and the main input is actual results in a period and comparison of them with the planned results.

Management accounting formalizes plans of the organization as budgets. It also formalizes the control process by preparing as performance reports.