Financial Analytics platform- A determining tool for progress and sustainable growth.
Introduction
Audited financials are significant documents needed to check the value and credibility of every SME or large company. However, there is a lack of a standard format in which business companies report their financials to utter disappointment. The documents are very much unorganized. Most companies present scanned images to support it. It is important to note that a proper template or format is also worth presenting these important financial data. This helps in properly analyzing the data and making any strategies or to arrive at a decision.
It is unstructured and mostly via scanned images. The absence of a standardized data submission format poses the biggest challenge in data collection, analysis and decision.
Types of Financial Institutions looking for Financial Analytics platforms
Financial analytical platforms’ versatility is evident from their service to various financial institutions irrespective of their constituents. It includes the following-
1. Sole Proprietorship
2. Partnership
3. Limited Liability Partnerships
4. Private Limited Companies
5. Public Limited Companies
6. Income Identification
7. Income Identification
Importance of Financial analytical platforms
The economy of a country and business are dynamic concepts. They keep on changing from one time to another. But not to forget that they play a major in determining the profits and loss in the system. So, one cannot just turn a blind eye to this factor. Rather, important scrutiny and analysis is the need of the hour. The company management takes all the important decisions only by taking into consideration the economic factors. It is basically for this reason, for which there is a dire need for a financial analytics platform. They are important for a better assessment of current operations. This will help in taking better planning to allot resources where the needs are visible. Many companies are facing a lot of problems due to this. As a result, they fail to identify the strengths and weaknesses of the business’s ecosystem. This becomes a big impediment in taking quality decisions for the business company.
Financial Analytics platforms offer a system of proper tracking of financial KPIs, including the net profit margin, return or assets, and many others to enable healthy financial development and outcomes. These undergo a lot of tests before coming as a substantial or final report. The evaluation is generally very scientific and precise. Finance analytics are the major contributing factor for the stability of the companies. It gives a detailed analysis of the status and stability of the business company. It also gives us an idea of decision making for the various stakeholders and investors in the business company. It provides an insight into the economic structure of the business company.
Types of financial Analysis include the following:
Financial Analysis, as already mentioned, is the process of evaluating businesses, projects, budgets and other finance-related entities. It is done to identify the stability, solvency, liquidity or profitability of an organization. It provides a better emphasis on the income statements, balance sheets and cash flow statements. Apart from this, it is crucial to assess the economic trends, set financial policy, formulating long-term business plans, and pinpoint projects or companies for investment. There are various kinds of financial analysis in a company. This may include horizontal Analysis, vertical Analysis, short term analysis etc. Let us have a brief understanding of this analysis.
1. Horizontal Analysis
The Horizontal Analysis is a descriptive comparison of an organization’s financial performance for consecutive reporting periods. The object of horizontal analysis is to know the major shifts in the data. Such details are crucial in determining a better analysis of financial outcomes.
2.Vertical Analysis
The vertical analysis entails the proportional analysis of a financial statement. It gives a detailed list of financial statements about the percentage of another item.
3.Short-term Analysis
The short- term Analysis gives an enumerated analysis of the working capital. The analysis takes into account the analysis of turnovers, inventory, and other accounts to be paid.
4.Multi-company comparison
The multi-company comparison gives a detailed table analysis of the comparison between the financial ratios of important organizations. Such organizations are generally within the purview of a similar sector of the industry. The Multi-company comparison gives a detailed analysis of the strengths and weaknesses of the companies. It also determines the relative profits between them.
5. Industry Comparison
Industry comparison analyses the difference between the outcomes of a particular business and the average results of an entire industry. The sole object here is to know any results in comparison to the industry average.
Conclusion
Having said the importance of a Financial analytical platform, it is now crucial to almost all business companies. Planning and analysis from the core part of the decision making process in the business company. You can take help of professional financial analytics software. This plays a significant role in consolidating the various data sources at a single glance. This assists reading the patterns of profits and losses of the ecology of the business. After having a read of these reviews and patterns, you may plan a structured strategy for combating the companies’ loopholes. Cost efficiency, productivity, growth, improved risk, and finance analytics impact are attached to a greater significance. After all, the dynamic nature of the economy cannot be attributed to lesser importance. One is to keep an eagle’s eye on these to pace up their strategy.
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