Project Management Accounting: Budgeting, Tracking, and Reporting Costs and Profitability, Second Edition

Conclusion

It is clear from our study of the effect of a company's financial goals and performance that a company's strategy must be oriented by mission and objectives, but strategy must be driven by finances. In other words, finance represents the engine that allows a company to move forward and accomplish its mission and objectives. It is also clear that strategy must be made up of the concrete steps that the company must take in order to be successful.

Project managers must learn as much as possible about the company's mission, objectives, and strategy to be able to determine whether a particular project meets the company's strategic financial objectives. Using the financial ratios of the DuPont Method, we have shown how project managers can decide if a project will be viable; in other words, will it provide cash inflow that is worth more than the cash outflow? Will it be more efficient to finance the project with cash from equity or by increasing debt? Will the results of the project have a positive effect on overall financial performance?

We have also shown how project managers can assist a company in determining what its mission and objectives are and what concrete steps the company must take in order to create a strategy to reach the mission and objectives. The Business Action Framework is a step-by-step method for implementing strategy.

Finally, we have shown how proper management of both resources and money according to priorities set by the mission, objectives, and strategy ...