Repeating, predictable patterns in data over a period of time, typically 12-months or more, are commonly characterized as seasonality. It’s certainly not the seasonal Fall or Autumn collection of the Vogue fashion trends which will never be repeated on the runway, but it’s the same predictable pattern every period. Since the oscillating highs and lows…
Were All Financial Analysts Once Mild Mannered Accountants? What professional careers led us to become financial analysts? Did we enter the field of financial analysis right out of college, or did we take some segues, before discovering that we were well suited (pinstripes optional) for intense financial scrutiny, coaxing stories out of numbers? Perhaps…
Serious boss looking at camera with his two employees sitting near by. I sometimes envy my former classmates that went into equity analysis. When they build financial forecasting models it may be used by buy-side analysts as best guesses of what a company’s sales or earnings may be next quarter or next year but…
Periodic variance analysis has got to be one of the hardest jobs in Financial Planning and Analysis (FP&A). Every month you go out to the various operations teams and shared services leads and ask them why their forecast is not on budget or most recent forecast. The answers are almost always lacking in detail and…
It seems like Financial Planning and Analysis (FP&A) is the jack-of-all-trades and the master of most others. FP&A answers strategic questions, forecasts for the future, ensures a timely accounting close, prepares board reporting packages, preps the executive team, divests a division, analyzes product line profitability, performs due diligence on an acquisitions and oh yeah does…
In a September 10, 2008 investor conference call, Ian Lowitt, Lehman Brother’s CFO, set forth a strategy to investors that he, along with other Lehman executives, believed would save the firm. During that call, Mr. Lowitt stated among the detail of the plan the following statement: “And even under the scenario of limited debt-issuing capacity in 2009,…
Most large organization spend a considerable amount of resources performing some type of financial forecasting. Conversely, small and medium-sized businesses spend less time on planning for the future. Larger organizations have more to lose, therefore, the need to actively assess changes in the market to take advantage of opportunities or avoid risks becomes a more…
Various studies show that increasing financial forecast accuracy will lead to higher profits, lower inventory levels and a higher share price. By how much varies by industry, time period forecasted, forecast measure, business model and a myriad of other factors that all play into the financial forecast itself. With the speed of business constantly increasing,…
