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13 Steps to do Financial Analysis Credits to Anders Liu-Lindberg, follow him for more practical finance content. Here's the original post ----- Most financial analysis is pointless. Here's why... We start with the numbers Too often, we dump the numbers in a spreadsheet. We organize it in a pivot and compare it across periods. We investigate every variance and explain why it occurred. Instead, we should start with a business problem This is very inefficient and often a waste of time. Instead, we should identify our business challenges. Then we analyze the issue and propose viable solutions. It's not the analysis approach that's wrong I believe you're great at doing analysis. You follow a logically structured process. The problem is that you start at the wrong place. If we work on our true business challenges we will improve performance. Business challenge -> analysis process -> solution implementation Here are 13 steps for doing a great financial analysis: 1. Financial statements 2. Business understanding 3. Clean and organize data 4. Calculate ratios 5. Analyze trends 6. Benchmarking 7. Assess profitability 8. Evaluate liquidity 9. Cash flow analysis 10. Recommend actions 11. Write the report 12. Present analysis 13. Update regularly ----- Follow our page FP&A Secrets to grow your career in Financial Planning & Analysis

13 Steps to do Financial Analysis Credits to Anders Liu-Lindberg, follow him for more practical finance content. Here's the original post ----- Most financial analysis is pointless. Here's why... We start with the numbers Too often, we dump the numbers in a spreadsheet. We organize it in a pivot and compare it across periods. We investigate every variance and explain why it occurred. Instead, we should start with a business problem This is very inefficient and often a waste of time. Instead, we should identify our business challenges. Then we analyze the issue and propose viable solutions. It's not the analysis approach that's wrong I believe you're great at doing analysis. You follow a logically structured process. The problem is that you start at the wrong place. If we work on our true business challenges we will improve performance. Business challenge -> analysis process -> solution implementation Here are 13 steps for doing a great financial analysis: 1. Financial statements 2. Business understanding 3. Clean and organize data 4. Calculate ratios 5. Analyze trends 6. Benchmarking 7. Assess profitability 8. Evaluate liquidity 9. Cash flow analysis 10. Recommend actions 11. Write the report 12. Present analysis 13. Update regularly ----- Follow our page FP&A Secrets to grow your career in Financial Planning & Analysis

How-to do solid financial analysis.

Good morning finance professionals, THE ESSENCE OF BUSINESS & FINANCIAL ANALYSIS FOR COMPANY GROWTH Financial analysis is essential for guiding strategic decisions and driving the financial growth of a company. By regularly analyzing financial statements, forecasting future opportunities, and reviewing past performance, businesses can determine their scalability and profitability. Key steps in effective financial analysis include: 1. Comparing forecast vs actual monthly results to track progress and identify areas for improvement 2. Reviewing income, expenses, cash flow, and the balance sheet to determine if goals are being achieved 3. Reformulating financial statements to facilitate informative analysis 4. Analyzing profitability, earnings quality, growth prospects, risks, and value to guide decision-making Financial management analysis techniques like scenario analysis, capital budgeting, risk assessment, cash flow analysis, and financial forecasting are also critical for enhancing transparency, making informed decisions, and planning for long-term growth. By utilizing these tools and following a structured framework, companies can incorporate "soft" aspects of analysis in a more informative way to drive financial performance. The quality of data is paramount, as even a single error can lead to significant losses and misinformed strategies. Automating data consolidation and transformation from multiple sources helps ensure data accuracy and reliability, enabling brands to focus on deriving actionable insights. Regular financial analysis, effective financial management techniques, and high-quality data are the essence of driving financial growth and value creation for any company. By implementing these practices, businesses can make informed decisions, assess risks, and achieve sustainable growth. Do enjoy your weekend! #finance #financeanalysis #financialgrowth #financeprofessionals

Financial Analytics Strategy Financial Analysis is an integral part of finance and accounting roles as it involves the process of evaluating businesses, financial statements, projects, budgets, and other finance-related entities to determine their performance and sustainability. Benefits: ·Evaluate Business Projects: Financial analysis allows a company to assess the profitability & viability of expanding its production capacity, providing insights into potential returns, associated costs, and the optimal financing structure for the project. ·Helps Track Financial Activities: Aids in tracking a company's financial activities by providing detailed insights into cash flows, expenditure patterns, and revenue sources. ·Define your budget: Assists in defining an effective budget by examining historical spending patterns, revenue streams, and cost structures, enabling organizations to set realistic financial goals. ·Cost-Benefit Analysis: Perform a thorough analysis to estimate the total investment needed for a new product line, covering manufacturing, marketing costs, and overhead expenses. ·Risk Assessment: Identify and analyze potential risks associated with the new product launch, such as market competition, changes in consumer preferences, or unexpected production issues. ·Measure Business success: Businesses to measure success by assessing key performance indicators (KPIs) such as profitability margins, return on investment (ROI), and cash flow. #dataanalytics #financialanalytics #accounting #businessanalytics

What's your biggest challenge with financial analysis? 13 steps to make financial analysis better... Most of us have done financial analysis. However, most of us also cut corners during the process. This leads to a less insightful analysis, and often, it won't even be used. How do you do financial analysis well? Follow these 13 steps: 1. 𝗙𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹 𝘀𝘁𝗮𝘁𝗲𝗺𝗲𝗻𝘁𝘀 These documents are usually found in the company's annual reports or investor relations websites. 2. 𝗕𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝘂𝗻𝗱𝗲𝗿𝘀𝘁𝗮𝗻𝗱𝗶𝗻𝗴 Understanding the context is essential for meaningful analysis. 3. 𝗖𝗹𝗲𝗮𝗻 𝗮𝗻𝗱 𝗼𝗿𝗴𝗮𝗻𝗶𝘇𝗲 𝗱𝗮𝘁𝗮 Organize the data in a format that's easy to work with. 4. 𝗖𝗮𝗹𝗰𝘂𝗹𝗮𝘁𝗲 𝗿𝗮𝘁𝗶𝗼𝘀 Liquidity Ratios, Profitability Ratios, Efficiency Ratios, and Solvency Ratios. 5. 𝗔𝗻𝗮𝗹𝘆𝘇𝗲 𝘁𝗿𝗲𝗻𝗱𝘀 Look for changes in revenue, expenses, profit margins, and other vital metrics. 6. 𝗕𝗲𝗻𝗰𝗵𝗺𝗮𝗿𝗸𝗶𝗻𝗴 This can provide insights into how well the company performs relative to its competitors. 7. 𝗔𝘀𝘀𝗲𝘀𝘀 𝗽𝗿𝗼𝗳𝗶𝘁𝗮𝗯𝗶𝗹𝗶𝘁𝘆 Identify factors affecting profitability and discuss with various stakeholders how to address these factors. 8. 𝗘𝘃𝗮𝗹𝘂𝗮𝘁𝗲 𝗹𝗶𝗾𝘂𝗶𝗱𝗶𝘁𝘆 Determine if the company has enough current assets to cover its current liabilities. 9. 𝗖𝗮𝘀𝗵 𝗳𝗹𝗼𝘄 𝗮𝗻𝗮𝗹𝘆𝘀𝗶𝘀 Pay special attention to operating cash flow and free cash flow. 10. 𝗥𝗲𝗰𝗼𝗺𝗺𝗲𝗻𝗱 𝗮𝗰𝘁𝗶𝗼𝗻𝘀 For example, consider investing in the company, avoiding it, or holding onto existing investments. 11. 𝗪𝗿𝗶𝘁𝗲 𝗮 𝗿𝗲𝗽𝗼𝗿𝘁 Use charts, graphs, and tables to illustrate key points. 12. 𝗣𝗿𝗲𝘀𝗲𝗻𝘁 𝗮𝗻𝗮𝗹𝘆𝘀𝗶𝘀 Be prepared to explain your methodology and answer questions. 13. 𝗨𝗽𝗱𝗮𝘁𝗲 𝗿𝗲𝗴𝘂𝗹𝗮𝗿𝗹𝘆 Financial analysis is ongoing; you must stay updated with market and competitor changes. It sounds simple. However, how many of us can honestly say we employ such a rigorous approach to financial analysis? How do you do financial analysis, and do you find that any steps need to be included?

Don't miss these very essential calculations and concepts. This Cheat Sheet show the impactful financial model and how to learn essentials of corporate finance. Learn crucial finance principles given through real example and calculations. 🚀 𝗛𝗲𝗹𝗽 𝗺𝗲 𝘀𝗵𝗮𝗿𝗲 𝘁𝗵𝗶𝘀 𝗰𝗼𝗿𝗽𝗼𝗿𝗮𝘁𝗲 𝗳𝗶𝗻𝗮𝗻𝗰𝗲 𝗶𝗻𝘀𝗶𝗴𝗵𝘁𝘀 𝘄𝗶𝘁𝗵 𝘁𝗵𝗶𝘀 𝗙𝗥𝗘𝗘 𝗖𝗵𝗲𝗮𝘁 𝗦𝗵𝗲𝗲𝘁. 👍 👍 👍 𝗟𝗶𝗸𝗲, 𝗦𝗵𝗮𝗿𝗲 𝗮𝗻𝗱 𝗖𝗼𝗺𝗺𝗲𝗻𝘁 𝘀𝗼 𝘁𝗵𝗶𝘀 𝗽𝗼𝘀𝘁 𝗰𝗮𝗻 𝗿𝗲𝗮𝗰𝗵 𝗽𝗿𝗼𝗳𝗲𝘀𝘀𝗶𝗼𝗻𝗮𝗹𝘀 𝘄𝗵𝗼 𝘄𝗮𝗻𝘁 𝘁𝗼 𝗹𝗲𝗮𝗿𝗻 𝗺𝗼𝗿𝗲 𝗮𝗯𝗼𝘂𝘁 𝗰𝗼𝗿𝗽𝗼𝗿𝗮𝘁𝗲 𝗳𝗶𝗻𝗮𝗻𝗰𝗲, 𝗳𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹 𝘀𝘁𝗮𝘁𝗲𝗺𝗲𝗻𝘁𝘀, 𝗮𝗻𝗮𝗹𝘆𝘀𝗶𝘀 𝗮𝗻𝗱 𝗿𝗲𝗽𝗼𝗿𝘁𝗶𝗻𝗴. 𝗗𝗼 𝘆𝗼𝘂 𝗹𝗶𝗸𝗲 𝘁𝗵𝗲 𝗱𝗼𝘄𝗻𝗹𝗼𝗮𝗱𝗮𝗯𝗹𝗲 𝗣𝗗𝗙 𝘃𝗲𝗿𝘀𝗶𝗼𝗻? 👉 𝗖𝗼𝗺𝗺𝗲𝗻𝘁 𝘁𝗵𝗶𝘀 𝗽𝗼𝘀𝘁 𝗼𝗿 𝗗𝗠 𝗺𝗲  𝗜 𝘄𝗶𝗹𝗹 𝘀𝗵𝗮𝗿𝗲 𝗱𝗼𝘄𝗻𝗹𝗼𝗮𝗱 𝗹𝗶𝗻𝗸. 🧿 𝗪𝗵𝗮𝘁 𝗶𝘀 𝗶𝗻𝗹𝗰𝘂𝗱𝗲𝗱 ▶️ Get started with  Financial statement presentation • Balance sheet • Profit and loss account • Cash flow statement (indirect method) ▶️ Historical ratio analysis • Liquidity ratios • Profitability ratios • Activity / efficiency ratios • Ratios of financial structure ▶️ Revenue forecast ▶️ COGS forecast ▶️ Fixed and variable overhead cost forecast ▶️ Net working capital forecast • DSO calculation • DPO calculation • DIO calculation • Account receivable forecast • Account payable forecast • Inventories forecast ▶️ CAPEX forecast • Forecast of tangible and intangible assets • Forecast of depreciation and amortization ▶️ Financial liabilities forecast ▶️ Balance sheet forecast ▶️ P&L forecast ▶️ Cash flow statement forecast ▶️ Breakeven forecast ▶️ Vertical P&L analysis ▶️ Horizontal P&L analysis ▶️ Weighted average cost of capital (WACC) forecast ▶️ Valuation based on discounted cash flows I missed something? Let me what to add and I will approach this in new version. -------------------------- 📌 Life in finance is busy. Deadlines, tons of spreadsheets, management pressure lead to chronic stress. I specialize in helping finance pros avoid chaos and focus on what matters.  Start with building sustainable financial model: 👉  https://lnkd.in/dkA2qcKN

FINANCIAL ANALYSIS   Financial analysis is the backbone of informed decision-making in the business world. Whether you're a seasoned finance professional or just starting your journey in the field, understanding financial analysis is key to success.   Here are a few reasons why mastering financial analysis is crucial:   Insightful Decision-Making: By analysing financial statements, ratios, and trends, you gain valuable insights into a company's performance and financial health. This information empowers you to make strategic decisions that drive growth and profitability.   Risk Management: Financial analysis helps identify potential risks and opportunities within an organisation. By assessing factors like liquidity, solvency, and profitability, you can mitigate risks and capitalize on growth opportunities.   Investment Evaluation: Whether you're an investor or a business owner, financial analysis is essential for evaluating investment opportunities. It helps assess the potential return on investment, assesses the company's valuation, and informs investment decisions.   Performance Measurement: Financial analysis provides benchmarks for evaluating performance over time. By comparing current financial data with historical trends and industry standards, you can gauge your company's performance and track progress towards goals.   Strategic Planning: Financial analysis plays a critical role in strategic planning. It helps identify areas for improvement, allocate resources effectively, and set realistic financial objectives for the future.   Whether you're analysing balance sheets, income statements, or cash flow statements, mastering financial analysis skills is essential for driving success in today's dynamic business landscape.   #FinancialAnalysis #BusinessInsights #StrategicDecisionMaking

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