The main aim of financial analysis is to give shape to all the monetary strategies for business through reliable and factual insight. Financial analytics offers detailed views of a business’s financial data and provides the tools for the business to gain in-depth knowledge of key trends and take action to improve its performance.
What are the components of Financial Analytics?
It is essentially a subset of business intelligence and enterprise performance. It affects all parts of a business and plays a very important role in helping businesses predict and plan for the future. Financial Analytics uses massive amounts of financial and other data to identify patterns and make predictions. It helps businesses understand their top-line and bottom-line performance. It offers insight into an organization’s financial status and improves its profitability, cash flow and value. It also helps improve an organization’s business processes. Predictive analytics is an essential element in the digital transformation of finance.
Importance of Financial Analytics
Financial Analytics is absolutely essential in today’s economic scenario. It helps organizations to:-
- Determine risks
- Enhance business processes
- Determine the right areas of investments
- Rethink strategies
- Assess the profitability of products across various sales channels and customers, market segments
- Enables improved electronic linkage of records across the supply chain
Types of Financial Analytics
Financial Analytics offers various views of an organization’s past, present, and future performance. The key types of financial analytics are:
- Productive Sales Analytics
This includes the use of correlation analysis or pat trends to forecast corporate sales.
- Client Productivity Analytics
This helps differentiate between clients who make money for the business and those who do not.
- Product Profitability Analytics
Product productivity analytics includes assessing each product individually.
- Cash -flow Analytics
This analytics entails employing real-time indicators, including working capital ratio and cash conversion cycle and uses regression analysis to predict cash flow.
- Value-Driven Analytics
The value-driven analysis assesses the key levers the business needs to pull to achieve its goals.
- Shareholder Value Analytics
This kind of analytics is used to tally the value of a company by examining the returns it provides to shareholders and uses profit and revenue analytics as tools.
Financial Analytics Software Programs
Popular financial analytics software programs include Oracle Financial Analytics, SAP ERP Financial Analytics, SAS Business Analytics, IBM Cognos Finance, NetSuite, MATLAB, etc.
Financial Analytics Course
On offer is the XLRI Financial Analytics Course Online on the Talentedge platform. This four-month course blends easy -to – use statistical tools with complex machine learning tools and algorithms to equip learners with the requisite set of skills required for analyzing data the participants will be able to perform financial analysis using powerful tools like Python and R by the end of the course. The XLRI Financial Analytics Course Online includes understanding stock price behavior, time series analysis in finance and credit risk modeling as part of the syllabus.