All of these external users have something in common. However, using financial accounting, the accounting department, has the ability to create cash flow statements. Financial accounting results in the determination of net income at the bottom of the income statement. The key difference between financial and managerial accounting is that financial accounting aims at providing information to parties outside the organization, whereas managerial accounting information is aimed at helping managers within the organization make decisions. hold, sell, or buy more. The financial statements used in financial accounting present the five main classifications of financial data: revenues, expenses, assets, liabilities and equity. Home » Financial Accounting Basics » Financial Accounting. Lenders or creditors also use financial statements to base the decisions on because they want to know if a company is creditworthy enough to pay off its current loans or borrow additional funds. Some of the ways internal users employ accounting information include the following: Assessing how management has discharged its responsibility for protecting and managing the company’s resources Shaping decisions about when to borrow or invest company … Managerial accounting is the practice of analyzing and communicating financial data to managers, who use the information to make business decisions. Suppliers. The balance sheet contains the status of the companies asset, liability and equity accounts. The Certified Management Accountant (CMA) designation is more demonstrative of an ability to perform internal management functions than financial accounting. Internal users include employees, managers, and executives of the company. All of the financial accounting tools mentioned here are used to make solid management decisions. That is why the FASB has created a series of accounting principles and concepts to make sure financial statements are comparable and understandable. Prospective investors need information to assess the company's potential for success and profitability. These include white papers, government data, original reporting, and interviews with industry experts. The balance sheet utilizes financial accounting to report ownership of the company's future economic benefits. They are outsiders to the business and only have limited information about companies’ operations, financial position, and well being. Financial accounting is also used to determine a companies financial position for a specific period in... Cash Flow. Shareholders and other investors are usually the first group of external users that comes to mind.