Financial Planning and Analysis Report
Financial Planning and Analysis Report
The value of making informed business decisions is priceless. It comes down to mitigating business risk using financial planning and analysis (FP&A). Growth depends on taking risks. The better you understand the risks involved with implementing new ideas, the more likely you will profit from them. This demands you consider those factors that will impact your future. So why do so many companies avoid disciplined financial planning and analysis in their operations?
Every business must continue to invest in its operations to grow. But revenue is only part of the growth picture. Productivity and profitability are key to sustainability. Sustainability allows a company to navigate uncertainty by carefully managing both the income statement and the balance sheet.
Disciplined corporate finance enables a business to grow when revenue is abundant, and survive when times are tight. It’s the discipline of planning ahead accurately. The thing is, there is only one true statement about financial projections: they’re wrong. It’s just a matter of which direction they’re off, and by how much.
Any organization could find itself in a difficult situation that demands unique, specialized attention to get on a productive track toward sustainability. The way to leverage financial planning and analysis to measure the health of a company is twofold:
- Financial Statement Analysis: Actual versus Forecast
- Key Performance Indicators (KPIs): Variance from healthy target operating levels
Selecting the most relevant KPIs for your business will provide you accurate insights to three business fundamentals:
- Product/Market Fit
- Organization/Market Fit
- Finance/Market Fit
The more you understand your financial statements and the most relevant operating KPIs, the more prepared you will be to know not only what happened (accounting and the past), but what’s happening (finance and the future) and to make great things happen.
Here’s what the financial planning and analysis report looks like:
FP&A Presentation Template 1.1 DRAFT
The big question? How do you know what variables to keep track of? Regression analysis.
Regression analysis is a way of mathematically sorting out which of those variables does indeed have an impact. It answers the questions: Which factors matter most? Which can we ignore? How do those factors interact with each other? And, perhaps most importantly, how certain are we about all of these factors?
Financial Planning and Analysis Report for You
Our Financial Planning and Analysis report provides you value-added financial support and analysis by leading the long term forecasting and analytic processes surrounding business operations and new strategic growth initiatives – both organic and strategic. Finance programs are customized to work closely with company management to facilitate effective, data-driven decision making and drive insight into the business with analytics that support the long-term strategic direction of the company. Key activities include leading company-wide strategic and mid-term operational planning and forecasting processes, in addition to key initiative modeling activities including:
- Participate in the development of your current, mid-term and long range strategic planning process
- Lead development of your 5-year strategic plan that incorporates the financial impacts of your strategic initiatives
- Oversee the development and maintenance of financial models that support current and long term strategic initiatives and decisions, including business case development for new initiatives, M&A and integration activities
- Lead formal processes and framework for benchmarking and analyzing business initiatives, establishing KPI’s and other tracking metrics
- Drive scenario planning on future strategic initiatives and instilling measurement parameters for determining success
- Align, track and measure external expectations of stakeholders with internal benchmarks and performance measures
- Provide financial modeling, financial analysis and valuation support on new product development, long-term contracts and other ad-hoc financial projects
- Assist in M&A modeling, due diligence and integration activities by working with business leaders and corporate development to support acquisition reviews, valuation, and the integration into current operational and financial structures
- Develop and enhance competitive intelligence, customer intelligence, geographic and economic data and technology trends that are impacting the business
- Maintain relationships with operational finance teams to ensure quality deliverables and proper information flow
- Assist in the annual planning / budgeting process and ensure that the business and financial plans are in place to deliver on mid/long term targets, company objectives and initiatives, and strategy
FP&A is a continuous cycle of data collection and analysis, processing and reporting, forecasting and planning and accountability reviewing. Each step informs the next:
- Collecting financial and non-financial data, both budgeted and actual
- Analyzing those data to uncover drivers or events behind variances
- Communicating key insights to management through relevant reporting
- Rebudgeting and adjusting plans based on reported KPIs and insights
- Modeling new assumptions and executing on revised plans
As those plans unfold and the books are closed at the end of a fiscal period, the cycle begins again.
Leveraging relevant information to help improve business accuracy, productivity and profitability comes with an added benefit – more useful data is available for far more useful analytics. The result is more effective and relevant financial planning and analysis information without a ton of extra work.