#FinanceMaster
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13 steps to do Financial Analysis. #FinanceMaster(s) are best in Financial Analysis. It is one of the most basic disciplines of Finance. But how do you approach it from start to finish? Here's a 13-step process that should help you become a stellar financial analyst... 1. Financial statements Obtain the company's financial statements, including the balance sheet, income statement, and cash flow statement.2. Business understanding Familiarize yourself with the company's industry, business model, and competitive position. 3. Clean and organize data Ensure that the financial data is accurate and consistent. Check for any errors or omissions. 4. Calculate ratios Calculate various financial ratios that are relevant to your company and can give insights into the financial health of the company. 5. Analyze trends Examine the financial statements over multiple periods (e.g., quarterly, or annually) to identify trends. 6. Benchmarking Benchmark the company's performance against its industry peers. 7. Assess profitability Evaluate the company's profitability by analyzing gross profit, operating profit, and net profit margins. 8. Evaluate liquidity Assess the company's ability to meet its short-term obligations by examining liquidity ratios. 9. Cash flow analysis Review the cash flow statement to understand the company's cash generation and utilization.10. Recommend actions Based on your analysis, provide recommendations or insights. 11. Write report Document your findings and recommendations in a clear and concise report. 12. Present analysis If necessary, present your analysis to colleagues, clients, or superiors. 13. Update regularly Continuously monitor the company's performance and update your analysis as new data becomes available. ---------- Do you find that anything is missing in this process? What are your best tips for doing financial analysis? Learn more about finance and accounting by listening to the hashtag #FinanceMasterPodcast here:https://bit.ly/3NLSt73 Or download guides and cheat sheets about finance and accounting here:https://lnkd.in/eC_zuCU4
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Anders Liu-Lindberg
Leading advisor to senior Finance and FP&A leaders on how to succeed with business partnering
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It’s one of the key processes in Finance and doing it well can be worth a ton of money.Follow these 13 steps to get it right.How are you doing financial analysis?
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Business Partnering Institute
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Great business partners masters financial analysis.
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CEDRIC R NISA
Studying BBM (major in Banking and finance)@ University of papua new guinea
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Thanks for sharing.🥰♥️
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Chris Stiebel
XP&A / FP&A / Finance and Data Enthusiast
2mo
This is great Anders! A request, as this is primarily Descriptive Analytics, I'd also love to see a follow-up with prescriptive Analytics (and more into AI/ML etc)
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Frederik Middernacht
AI for Finance | CFO | Entrepreneur
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Hopefully more and more using AI, Anders. It can be helpful for quite a few of these steps and in some case already do them for us.
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#FinanceMaster
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