Financial Analytics for Planning
This playbook guides the reader through the use of financial analytics techniques to assess a company's financial health and incorporate this information into strategic business planning.
Step 1: Data Collection
Gather all relevant financial data like balance sheets, income statements, cash flow statements, and past financial reports.
Step 2: Data Cleaning
Ensure the collected financial data is accurate and free from errors. Correct any discrepancies and remove duplicates.
Step 3: Performance Analysis
Analyze historical performance using financial ratios and metrics such as ROI, profit margins, and liquidity ratios.
Step 4: Trend Assessment
Identify financial trends over time to understand revenue growth, expenditure increases, or changes in asset and liability levels.
Step 5: Forecasting
Use statistical models and techniques to forecast future financial performance and potential risks.
Step 6: Scenario Analysis
Run different financial scenarios to evaluate the effects of various strategic decisions under consideration.
Step 7: Decision Making
Utilize insights from the analysis and forecasting to inform strategic business planning and make informed decisions.
Step 8: Reporting
Prepare and present detailed reports summarizing financial health assessments and recommendations for stakeholders.
General Notes
Software Tools
Consider using financial analysis software to automate data collection, analysis, and reporting processes.
Regulatory Compliance
Ensure all financial analytics practices adhere to relevant financial regulations and reporting standards.