Data Analysis – Fuelling the Financial Management Fire

In his famous book “The Goal”, noted author and Professor Dr. Eliyahu Goldratt, points out that at the heart of it, the goal of any organization is making money. And any activity that takes the company away from this goal should be handled carefully. What Dr. Goldratt has explained so simply is the foundation of Financial Management.

Going by the textbook definition or attending any of the financial analysis courses will teach you one thing – Financial Management is all about managing the company’s finances and utilizing it optimally to ensure that the company makes profits. When you try to break it down to the next levels, financial management includes the entire pipeline of activities starting from arranging the funds, allocating the funds to different initiatives, risk planning and mitigation, accounting and monitoring of the utilization of these funds leading up to the revenue generated and profit made.

Ok, so now you have an idea about what financial management is, but how is it done? That is where financial analyst training courses can help you. Each of these activities needs to be looked into greater details for their absolute value as well as what they imply in different business scenarios. There are multiple methods and formulae to do this. If you attend any of the financial analysis courses, you can easily learn the tricks of the trade.

Some of the most popular metrics to identify the performance of a company that will be taught in your financial analyst training courses are Current Ratio, Current Assets, and Current Liabilities, Book Value, Bottom Line. The good financial analysis courses will also focus on teaching you how to model and identify trends apart from measuring the metrics. This is the one trait that can make you stand out in the field – the ability to analyze the financial statements and identify trends.

At this point, you must be feeling confident that with the help of the right financial analysis courses you can make sound business decisions leading to significant financial management and delivering profits for your organization. But, if the only pre-requisite of making profits for a company were attending some financial analytics training courses, everyone would be making profits. Right?

This certainly is not the case! Then what are we missing? The most crucial aspect of the entire equation – Data. We can learn as many formulae as we like, but if we do not have the right data to support our analysis, the entire effort will lead to big naught. As any of the good financial analysis courses will teach you, as much as the formulae or the theory is essential, it is the data that can make or break your entire hypothesis.

If you have attended some financial analytic training courses or any analytics course for that matter, you will know that all problems in life – personal financial management or organizational financial management to name a few – are essentially all data analysis problems. Picture this; you have the most painstakingly derived formula that can determine your company's exact position of your company in the market vis-à-vis the competition. What will you do with it, if you do not have the data to input into the formula? How will you identify the trend that your company is following in the market if you do not have data to support your gut feel?

All the good financial analysis courses agree on this one point if the financial management is the fire that keeps the engine of your company running, the analysis of the observed data is the fuel keeping this fire going.