Financial Accounting vs. Managerial Accounting

Financial accounting and managerial accounting are two types of accounting that serve different purposes within a business.
Financial accounting focuses on creating standardized financial statements for external stakeholders. 
For example, Delta Corporation prepares balance sheets, income statements, and cash flow statements for its shareholders and lenders.
These reports are prepared using strict financial reporting standards, such as Generally Accepted Accounting Principles, to ensure consistency. 
Delta Corporation reports historical performance, typically quarterly or annually, to help investors evaluate its financial stability and past performance.
Managerial accounting provides detailed internal reports used by managers to make operational and strategic decisions. 
Delta Corporation's management uses managerial accounting to prepare flexible internal reports to support decisions such as production planning, cost control, monitoring key performance indicators, and preparing and reviewing budgets.
Delta Corporation's managers may review weekly internal reports to manage labor costs or material usage efficiently.
While financial accounting summarizes data for the entire organization, managerial accounting analyzes profitability by department or product line to enhance efficiency.