Companies today face a glut of data. Firms should employ accounting as a analytics framework, and make use of more advanced data methods like graph theory to make strategic business decisions and navigate complex worlds.
Accounting data offers valuable feedback value to the company’s operation, industry, competitors and customers both internally and externally. Account data allows users to detect trends in a company’s performance, sector, competitors and customers that may motivate them to take the correct steps to make it successful.
Profitability Analysis
Profitability analysis: Divides revenue by cost to calculate financial value of products, customers, countries or other entities. FPA teams can rely on profitability ratios that they build and compare to identify patterns in margins or returns that increase financial forecasting and strategic planning.
Finding the most profitable customers, products and market segments gives great value in enabling businesses to optimize their model. Businesses can keep costs low while investing resources well and spotting opportunities to grow that will reap maximum return.
Apple used profitability analysis to analyze its product ranges and find ways to cut costs for a more reasonable pricing structure and sustainable growth. Data analysis is more than analyzing numbers on the surface, it involves looking to the subordinates and pushing efforts into the areas where they can best benefit. In order to get real-time insight in a fast and nimble manner, we should leverage an agile planning and analytics platform with fast calculation and one source of truth.
Cash Flow Analysis
Cash flow is critical to any entrepreneur, whether it is pay workers and fulfil orders or monitoring investment returns to grow your business over time. Through an emphasis on cash flow analysis, obligations can be met when committed and enough funds set aside for investing in its success.
As well as reporting on the cash produced and spent by your business, with a statement of cash flows you can pinpoint the areas of improvement in your company’s operations, investment, or finance activities that could boost its bottom line. A higher debt-to-asset ratio, for example, may be a sign that it’s time to raise additional capital or alter your growth model.
It is also possible to analyze cash flows to know if your business is healthy as compared to other companies in its industry (though comparative data might be misleading because the businesses generate and spend cash in a different manner). It is also more reliable to have accounting information about how things are doing.
Product Analysis
Product analysis is part of every successful company. It is about performing market studies, customer needs analysis, and deciding to modify or cancel products that aren’t doing so well; it also helps organizations align pricing strategies, as well as make informed decisions on new offerings and features.
Product analysis can be applied to all kinds of businesses and products both physical and digital. Product analysis is used by online retailers such as Amazon and Netflix to optimize feeds based on viewing behaviour, making products and advertisements more successful.
SWOT, PESTLE, and Value Chain analysis provide organizations with various avenues to analyze their products and their market niches – making smarter decisions to boost sales and profitability.
Performance Analysis
It’s the systematic process of checking on how well your business is doing, keeping track of a range of indicators – from numbers and employee performance, to customer surveys and forms.
Analytics can help you overcome presumptions, and take strategic actions to help your business grow and thrive. Performance metrics, for example, can give you insights into how quickly your team will close cases or the amount of marketing effort they invest.
Analyzing performance helps you to see where your shortcomings are so you can change course. eg: Sales are missing in one region due to bad training or spending on advertising? You can even use it to monitor progress towards objectives you have for yourself such as increasing revenues in that area or improving the morale of your employees.
