Do you know the benefits of sales analysis?

Also, are you familiar with the importance of data-driven decision-making in business?

Sales analysis is a powerful tool that helps businesses make informed decisions, track progress, and identify external factors impacting their performance.

In this blog post, we will discuss five key benefits of sales analysis and how it can help your business grow.

Top 5 Benefits of Sales Analysis

Here are the top 5 benefits of sales analysis.

#1: Identify Areas of Growth

Analyzing your sales performance helps you identify areas where sales are strong and have the potential to grow.

By investing resources in these areas, you can expand your business and improve your revenue.

For example, if you see a particular product or service selling well in a specific location or demographic, you can focus your efforts to increase sales in that area or expand your product offering to cater to that demographic.

#2: Identify Areas of Weakness

Sales performance analysis also helps you identify areas where sales are weak or where you are losing market share.

This knowledge can help you make recommendations to adapt products, pricing, or marketing strategies in order to improve sales and maintain a competitive edge.

By identifying the reasons behind the weak sales, you can work towards addressing the issue and improving your performance.

#3: Track Progress

Sales analysis is a good way to track progress over time. You can identify trends and patterns in sales and measure the impact of changes made to the business over time.

This helps you to make data-driven decisions about how to optimize your sales strategy and improve overall performance.

By regularly reviewing and analyzing your sales data, you can measure the effectiveness of your strategies and make adjustments as necessary.

#4: Make Informed Decisions

Analyzing your revenue performance helps you make data-driven decisions about how to optimize your sales strategy and improve overall performance.

You can use sensitivity analysis to run different scenarios and measure your performance against a quantified scenario.

This can help you shake outdated beliefs and open your company to new opportunities.

With sales analysis, you can make informed decisions on how to allocate resources and invest in new markets or products.

#5: Identify External Factors Impacting The Business

Revenue performance analysis helps you identify external factors impacting your sales, such as changes in the economy, changes in consumer behavior, or changes in the competitive landscape.

Understanding the impact of external factors and running scenarios on how to adapt to these changes will give you the possibility to react and redirect your company to your short-term and long-term objectives.

By anticipating and adapting to external changes, you can maintain your competitive edge and even gain a competitive advantage.

Bonus/Last Tips

Here are some additional tips to help you get the most out of sales analysis:

• Use visual aids such as charts and graphs to help you identify trends and patterns in your sales data.
• Regularly review and analyze your sales data to stay ahead of the curve and make informed decisions.
• Consider using sales forecasting models to predict future sales and help you plan accordingly.
• Involve your sales and marketing teams in the analysis process to get their input and perspective.

Final Words

In conclusion, sales analysis is a powerful tool for businesses to make informed decisions, track progress, and identify external factors impacting their performance.

Therefore, by identifying areas of growth and weakness, tracking progress, making informed decisions, and identifying external factors, businesses can improve their revenue and maintain a competitive edge in the market.

Do you have what it takes to be an effective finance professional in the next ten years? Get my course today and get on the right path toward achieving your goal!

Key Takeaways

• Sales analysis helps businesses identify areas of growth and weakness, track progress, and make data-driven decisions.
• Regularly reviewing and analyzing your sales data is essential to staying ahead of the curve and adapting to external changes in the market.
• Visual aids such as charts and graphs can help identify trends and patterns in sales data.
• Sales forecasting models can predict future sales and help businesses plan accordingly
• Involving sales and marketing teams in the analysis process can provide valuable input and perspective.

The Monte Carlo method is a powerful tool for financial modeling that can be used for forecasting, risk analysis, and valuation.

In this post, we’ll explore what the Monte Carlo method is, how it works, and how you can start using it.

What Is The Monte Carlo Method?

The Monte Carlo method is a technique used for complex modeling.

It involves generating many random samples of a system’s inputs and running simulations to see how those inputs impact the system’s outputs.

Therefore, by repeating this process many times, you can build a probability distribution of the system’s outputs, which can help you make predictions and understand the uncertainty of the system.

Furthermore, the name “Monte Carlo” method was first used by Stanislaw Ulam, a mathematician working on the Manhattan Project.

Also, he was inspired by the many random games that were played at the Monte Carlo Casino in Monaco, and he chose the name as a way to describe the use of randomness in his simulations.

Why Is It Valuable?

The Monte Carlo model is valuable for several reasons:

• It accounts for uncertainty. In financial modeling, there are always uncertainties that can impact the outcome of a decision. The Monte Carlo model accounts for these uncertainties by generating a range of possible outcomes and their probabilities.
• It allows for sensitivity analysis. The Monte Carlo model allows you to test how sensitive your model is to different inputs. Therefore, by running simulations with different values for each input, you can see which inputs have the biggest impact on the outcome.
• It provides a more accurate estimate of risk. By generating a range of possible outcomes and their probabilities, the Monte Carlo model provides a more accurate estimate of the risk associated with a decision. Additionally, this can help you make better decisions and avoid unexpected losses.
• It can be used for complex models. The Monte Carlo model can be used for complex models that are difficult to analyze using other methods. Furthermore, this makes it a valuable tool for financial modeling, where there are often many variables that can impact the outcome.

How Does This Technique Work?

Monte Carlo analysis is a great tool for financial modeling.

Why?

Because there are many things that can impact financial outcomes, like market conditions, customer behavior, and economic trends.

Therefore, to use Monte Carlo analysis, you’ll need to gather information about these factors and set up a model to run your simulations.

For example, in sales forecasting, you can use Monte Carlo analysis to simulate what might happen if different combinations of factors impact your sales.

Additionally, by running many simulations, you can see how different combinations of factors might impact your sales, and get a better idea of what to expect in the next year.

How to Start Using A Monte Carlo Model?

Here is the step-by-step process.

1. Define the problem and identify the variables. Start by defining the problem you want to solve and identifying the variables that might impact the outcome.
2. Create a model. Create a model that represents the system or process you are trying to analyze. This model should be able to accept inputs and generate outputs based on those inputs.
3. Define the distributions. Assign probability distributions to each of the variables in your model. This will describe the uncertainty in each variable. Furthermore, you can use historical data or expert opinion to determine these distributions.
4. Run simulations. Use a computer program to run many simulations of your model. This will generate a large number of possible outcomes.
5. Analyze the results. Use statistical techniques to analyze the results of your simulations. Therefore, this will give you an understanding of the range of possible outcomes and their probabilities.
6. Visualize the results. Use histograms or probability density functions to help understand the results. This will help you identify the most likely outcomes and the range of possible outcomes.
7. Use the results to make informed decisions and draw conclusions. Use the results of your simulations to make informed decisions and draw conclusions about the system you are analyzing. You can use this information to develop strategies and make predictions about the future.

Final Words – The Monte Carlo Method Is A Powerful Tool

To sum up, the Monte Carlo method is a powerful tool for financial modeling that can help you make better forecasts and understand the uncertainty of your system.

Moreover, by following these steps, you can start using Monte Carlo analysis in your own financial modeling and analysis.

Most importantly, do you want to become an independent finance leader? Then, this is the perfect course for you! You will transform your career in no time and increase your income!

Are you interested in learning more about FP&A? As a finance professional, LinkedIn influencer, and course creator, I have developed a comprehensive, free FP&A course.

It is designed to help you become more knowledgeable about FP&A than 90% of your peers.

With 60 lessons covering a range of topics including financial analysis, budgeting, key performance indicators (KPIs), financial modeling, financial presentations and storytelling, management reporting, finance business partnering, FP&A tools, and FP&A career paths, you’ll have all the information you need to excel in this field.

What’s Inside The FP&A Course?

Here are the chapters that are covered in this free FP&A course.

Chapter 1: Role of FP&A

Lessons covered:

• Role in the Finance Organisation Chart
• FP&A Team Structure
• FP&A vs Controller
• FP&A Skills
• FP&A Methods & Skills

Chapter 2: Financial Analysis

Lessons covered:

• Types of Financial Analysis
• Horizontal Analysis
• Vertical Analysis
• Variance Analysis (Budget vs Actuals)
• PVM Analysis
• Overhead Analysis
• Headcount Analysis
• Balance Sheet Analysis
• Pareto Analysis
• Break-even analysis
• Sensitivity analysis

Chapter 3: Budgeting

Lesson covered:

• Budgeting process
• Budgeting methods
• Zero-based budgeting
• Rolling forecasts
• Top-Down vs Bottom-Up Forecasting
• Activity Based Budgeting
• Planning vs Forecasting
• Capital Budgeting
• Departmental Budgeting
• Headcount Forecasting
• Sales Forecasting Techniques
• Monte Carlo simulations

Chapter 4: Key Performance Indicators (KPIs)

Lessons covered:

• Accounting KPIs
• Cash KPIs
• SaaS KPIs
• Headcount KPIs
• Capex KPIs
• Manufacturing KPIs
• Inventory KPIs

Chapter 5: Financial Modeling

Lessons covered:

• Financial Modeling Guide
• Financial Modeling for Decision-making
• Financial Modeling Dos and Don’ts

Chapter 6: Financial Presentations & Storytelling

Lessons covered:

• Finance Presentations Types
• Effective data visualization techniques
• Use Charts in FP&A
• Storytelling with Chart
• PowerPoint Skills

Chapter 7: Management Reporting

Lessons covered:

• FP&A Management Report
• FP&A Reports Advices
• FP&A Reporting Tips

Chapter 8: Finance Business Partnering

Lessons covered:

• Improving your Business Partnering skills
• Create Value as a Business Partner
• Manage Demand
• Interview your Operational Business Partner

Chapter 9: FP&A Tool

Lessons covered:

• Functionalities to choose the right FP&A Tool
• What to do before choosing your FP&A tool
• FP&A Tool Selection Strategy
• Excel vs PowerBI

Chapter 10: FP&A Career

Lessons covered:

• Roadmap to FP&A
• FP&A Career Path
• From FP&A to CFO
• From Audit to FP&A
• Why Should You Work in FP&A
• Transition from Accounting to Finance

The Final Verdict – Excel Your Career with This FP&A Course!

Thank you for taking the time to explore my free FP&A course.

Furthermore, the free FP&A course that we’ve created provides finance professionals with a comprehensive overview of the key skills and techniques required to excel in FP&A.

By following the 60 lessons included in the course, learners will acquire the knowledge and skills necessary to make informed decisions, generate accurate forecasts, and communicate financial information effectively.

Whether you’re looking to enhance your existing skills or transition into a career in FP&A, this course is designed to equip you with the knowledge and confidence to succeed.

Special thanks to Carl Seidman, CSP, CPA, Josh Aharonoff, CPA, Christian Wattig, Soufyan Hamid, Anders Liu-Lindberg, Asif Masani and Chris Reilly, Paul Barnhurst and Wassia Kamon, CPA, CMA, MBA who contributed to this free course.

Finally, do you have what it takes to be an effective finance professional in the next ten years? Get my course which covers much more finance topics today and get on the right path toward achieving your goal!

Key Takeaways

• A comprehensive free FP&A course is available for finance professionals.
• The course aims to make participants more knowledgeable in FP&A than the majority of peers.
• Encompassing 60 lessons, it covers various topics including financial analysis, budgeting, KPIs, financial modeling, presentations, reporting, business partnering, tools, and career paths.
• The course is structured into chapters, each focusing on different aspects of FP&A.
• Completing the course equips learners with the skills to make informed decisions, forecast accurately, and effectively communicate financial information.

FAQ

1. What is the focus of the free FP&A course?

• The course is designed to provide comprehensive knowledge about Financial Planning and Analysis (FP&A) and enhance participants’ skills in this field.

2. How many lessons are included in the course?

• The course comprises 60 lessons that cover various aspects of FP&A, ranging from financial analysis to career paths.

3. Who can benefit from this FP&A course?

• Finance professionals seeking to improve their skills, transition into FP&A roles, or gain a deeper understanding of financial analysis, reporting, and other relevant topics.

4. What topics are covered in the course chapters?

• The chapters cover diverse subjects such as role in FP&A, financial analysis, budgeting, KPIs, financial modeling, presentations, business partnering, FP&A tools, and career paths.

5. How will the course benefit learners?

• Completing the course equips learners with the knowledge and skills needed for effective decision-making, accurate forecasting, and successful communication of financial information, enhancing their performance in FP&A roles or transition into the field.

Do you know the FP&A secrets that you will never learn in school? Here I will disclose the most important FP&A secret weapons.

Financial Planning and Analysis (FP&A) is a crucial function in any organization, helping businesses to make informed decisions based on financial data.

It involves analyzing and forecasting financial performance, identifying trends and opportunities, and providing insights to senior management to aid in strategic decision-making.

In this blog post, I’ll share five FP&A secrets that you can use to become a successful finance professional.

#1: B.O.T.E

Back-of-the-Envelope calculations are an invaluable skill that every FP&A professional should master. You may not always have access to a computer or a calculator, and sometimes a quick estimate is all you need.

Here are three pillars to becoming excellent at B.O.T.E:

1. Only aim for a rough estimation: Back-of-the-envelope calculations are meant to be quick and dirty, so don’t worry about being precise. Instead, aim to get a ballpark figure that can help you make a decision.
2. Know the basic numbers of your company: Understanding the basics of your company’s financials will help you make better estimates. For example, if you know your company’s revenue, you can estimate the impact of a 10% increase or decrease in sales.
3. Use Arithmetic shortcuts and principles: Knowing some arithmetic shortcuts and principles can help you make quick calculations. For example, knowing that 10% of a number is the same as dividing it by 10 or that multiplying by 3 is the same as adding a number to itself twice.

These simple tips will help you make quick calculations and provide rough estimates, which can be incredibly helpful in a fast-paced business environment.

#2: PVM

Price Volume Mix (PVM) analysis is a useful technique to compare sales, margin, or payroll costs.

PVM is a three-factor analysis that decomposes changes in sales or margin into three components:

• Price: changes in the price of products or services
• Volume: changes in the number of products or services sold
• Mix: changes in the mix of products or services sold

PVM analysis can help you understand why your sales or margin is changing and which factors are contributing the most.

For example, if your sales have increased by 10%, you can use PVM analysis to see if the increase is due to higher prices, increased sales volume, or changes in product mix.

By understanding PVM analysis, you can gain insights into why your sales or margin is changing and which factors are contributing the most. This knowledge can be invaluable when making informed decisions that impact your company’s bottom line.

#3: Storytelling

Storytelling is an essential skill that every FP&A professional should possess. By communicating financial data effectively, you can help your stakeholders understand the data and make informed decisions.

Here are some tips to help you become a better storyteller:

• Block time to prepare yourself and your stakeholders before a meeting: Preparation is key to delivering a compelling story. Before a meeting, take some time to gather your thoughts, organize your data, and rehearse your presentation.
• Know which messages you want to give: Before a meeting, identify the key messages that you want to convey. Be clear and concise, and focus on the most important information.
• Prepare your voice, and your setup, and prime yourself with good energy: Your voice, your body language, and your energy levels can all affect how your story is received. Make sure you’re well-rested, hydrated, and energized, and use a confident and engaging tone of voice.
• Check up on the expectations of your stakeholders before the meeting and make sure there is no surprise announced in the meeting: Before the meeting, check in with your stakeholders to see what they’re expecting. Make sure there are no surprises that could derail your presentation.

By following these tips, you can communicate financial data effectively and build credibility with your stakeholders.

#4: Excel and PowerPoint

Excel and PowerPoint are two critical tools that every FP&A professional should master. Excel can help you analyze and manipulate large amounts of data quickly, while PowerPoint can help you create professional-looking presentations.

Here are some tips to help you master these tools:

• Master pivot and index/match in Excel. Pivot tables and index/match are powerful tools that can help you analyze and manipulate large amounts of data quickly. Take some time to learn these functions, and you’ll be able to do more in less time.
• Use SmartArt in PowerPoint. SmartArt is a powerful tool that can help you create professional-looking presentations quickly. Take some time to learn how to use it effectively, and you’ll be able to create engaging presentations in no time.

By becoming proficient in Excel and PowerPoint, you can analyze and present data quickly and professionally, which can be an enormous asset to your organization.

#5: Listening to Your Business Partners

As an FP&A professional, it’s crucial to listen to your business partners and understand their needs. By doing so, you can provide them with the information and insights they need to make informed decisions.

Therefore, here are some tips to help you do this:

• Go out and meet your operational business partners. Don’t just rely on email and phone calls to communicate with your business partners. Take the time to meet them in person, and build a relationship based on trust and understanding.
• Make sure you spend your time on business priorities. Understand your business partners’ priorities and align your efforts with theirs. This will help you build credibility and trust with them, and ensure that you’re working on the right projects.
• Doing this is the best way to become a successful finance professional. By listening to your business partners and understanding their needs, you’ll be able to provide them with the information and insights they need to make informed decisions. This, in turn, will help you become a more valuable and successful finance professional.

As a result, by listening to your business partners, you can build credibility and trust, and become an invaluable asset to your organization.

The Final Verdict

To sum up, these five FP&A secrets can help you become a successful finance professional.

Moreover, by mastering B.O.T.E calculations, PVM analysis, storytelling, Excel, and PowerPoint, and listening to your business partners, you can gain insights into your organization’s financials, communicate financial data effectively, and build credibility and trust with your stakeholders.

Furthermore, by utilizing these FP&A secrets, you’ll be well on your way to becoming a successful FP&A professional. However, in order to become an expert and stand out from the competition you can take my course and join the group of finance professionals!

Key Takeaways

• FP&A involves analyzing financial data to aid decision-making.
• B.O.T.E calculations provide quick estimates for informed decisions.
• PVM analysis breaks down sales/margin changes into Price, Volume, and Mix components.
• Storytelling enhances the communication of financial insights to stakeholders.
• Mastery of Excel and PowerPoint improves data analysis and presentation skills.

FAQ

1. What is Financial Planning and Analysis (FP&A)?

• FP&A is a critical function in organizations that involves analyzing and forecasting financial performance, identifying trends, and providing insights to senior management for strategic decision-making.

2. What is B.O.T.E and how does it help in FP&A?

• B.O.T.E (Back-of-the-Envelope) calculations are quick estimates used by FP&A professionals. Tips for effective B.O.T.E include aiming for rough estimations, understanding basic company financials, and using arithmetic shortcuts.

3. What is Price Volume Mix (PVM) analysis and its significance?

• PVM analysis breaks down changes in sales or margin into three components: Price, Volume, and Mix. It helps understand why sales or margin changes and which factors contribute most, aiding informed decisions.

4. Why is storytelling important in FP&A?

• Storytelling helps communicate financial data effectively to stakeholders. Effective storytelling involves preparation, identifying key messages, maintaining energy levels, and aligning with stakeholders’ expectations.

5. How can mastering Excel and PowerPoint benefit FP&A professionals?

Excel aids in data analysis, while PowerPoint helps create professional presentations. Proficiency in Excel’s pivot tables and index/match functions, as well as using SmartArt in PowerPoint, enhances efficiency and presentation quality.

Which FP&A tools do you employ and do you know the most important FP&A tools?

As a finance professional, you know that the FP&A department plays a crucial role in driving the strategic decisions of a company.

Furthermore, the main objective of FP&A is to provide accurate and timely financial information to management, which can help them make informed decisions.

In order to achieve this, FP&A professionals use various tools and techniques to analyze and interpret financial data.

In this blog, we’ll discuss some of the important FP&A tools that you should know as you embark on your new role.

Important FP&A Tools for Your Job

Based on my experience, I have selected the seven functionalities to consider when choosing FP&A tools.

1. Collaboration

FP&A is working with many departments to analyze and plan financials.

As a result, tools providing collaboration capabilities are helping smoothen the FP&A processes like budgeting or closing.

2. Planning

Being able to budget sales, costs, and headcount and link it to financial statements in an integrated tool is a game changer for FP&A.

3. Reporting

Preparing and sending reports is still a big task for FP&A.

Therefore, being able to standardize and automate reports will free time for FP&A and allow them to spend more time on added-value activities like the analysis.

4. Analysis

Tools need to start offering analysis like variance analysis, outliers, trends, and even simple commentaries to help FP&A go faster in its analysis activities.

5. Spreadsheet

Because you cannot standardize everything, some tasks are and will still be done in spreadsheets.

Integrating dynamic data into existing files will unleash a lot of value for users.

6. Speed

If a tool can pull the data, calculate new measures, and build reports at a glance, FP&A will be able to spend more time on business operational topics.

Other things to consider: integration with your existing tool landscape, cost, cloud-based vs on-premises.

7. Business Intelligence (BI) Tools

BI tools such as Tableau, Power BI, and QlikView can help FP&A professionals to analyze data visually.

These tools provide interactive dashboards, graphs, and charts that help in identifying trends and patterns in financial data. BI tools also offer features like data blending, data modeling, and data visualization.

Conclusion – Utilize These Tools to Increase Your Productivity!

As an FP&A professional, having access to the right tools can make all the difference in your ability to analyze financial data and make strategic recommendations.

Whether you are creating financial models, forecasting financial performance, analyzing data, or creating financial reports, the tools we’ve discussed in this blog can help you do your job more efficiently and effectively.

By investing in these tools and taking the time to learn how to use them, you can become a more valuable asset to your organization and achieve greater success in your career.

Finally, you can take my course to skyrocket your FP&A career to the next level and join the group of finance professionals who made the right choice.

Before you learn how to move to FP&A, you need to know the basics of FP&A.

The FP&A includes four main tasks:

• The budgeting process
• Integrated financial planning
• Performance and management reporting
• Forecasting and modeling

The capacity of the finance department to oversee performance is increased by FP&A systems that relate the corporate strategy to execution.

How to Move to A FP&A Role?

An accountant asked me how to move to FP&A. We made a plan together, and here is how to move to FP&A in eight steps.

1. Get closer to the FP&A team (coffee, lunch).
2. Ask them to explain to you what they do and what they are working on.
3. Spend one day or 2x half days shadowing FP&A team members. (Shadowing is when you spend time with somebody and follow them in their meetings and tasks of the day.)
4. Offer your help on topics you are already covering in accounting (in the case of the accountant I helped, it was expenses).
5. As soon as there is a capacity problem in the FP&A team (somebody leaves or they are underwater), offer your help to take over some tasks. Make sure you do it on top of your normal job because you don’t want to penalize yourself in your current position.
6. When somebody leaves the FP&A team, offer your help directly to cover the tasks of the person who left. (Again, offer to do it as extra hours to make sure they do not penalize you for it.)
7. Get the support of the FP&A manager to apply officially to the position and increase your chances of success. Ideally, you want that the company not start the recruitment process and offers the job directly to you. Be smart about it.
8. Get nominated for the FP&A team. Alternatively, if nobody leaves the FP&A team and there is no job opening, start marketing the FP&A experience that you recently acquired in your CV. Then apply for junior FP&A roles or, even better, roles that require both accounting and FP&A experience.

FP&A vs Accounting

What is the difference between FP&A and accounting? FP&A entails assessing the financial statements generated by the accounting process, in addition to other financial and operational data. Also, it extends beyond record-keeping and financial reporting.

For instance, an FP&A analyst is likely to keep an eye on, evaluate, and assist in managing working capital, which is the money required to satisfy immediate commitments. The analyst determines the working capital by deducting current obligations from current assets. Both of which are data points on the balance sheet, a common financial statement in accounting.

The analyst may warn coworkers of a risky decline in working capital and suggest remedies. Such as accelerating receivables collection or lowering inventory.

Similarly to this, the FP&A department is responsible for monitoring and evaluating cash flow. That is a measurement of the amount of money coming in and going out during a specific time period. As seen in accounts stored in the general ledger, another common instrument in accounting.

In FP&A, cash flow data is analyzed to identify positive and negative trends that impact the overall financial condition, and recommendations for improvement, such as borrowing to cover urgent requirements, are made.

While FP&A is more concerned with capital allocation, accounting is more concerned with capital reporting. Three aspects are taken into consideration: decision-making, reporting, and measurement.

How to Assess Whether FP&A Work Is the Right Fit for You?

A good financial analyst can manage and analyze a vast array of different sorts of data and data assessment measures.

Financial analysts are great at solving issues. They connect together the many financial jigsaw pieces that make up a company’s finances and can visualize doing so. This is in order to create a number of development possibilities.

If you simply don’t enjoy arithmetic or using spreadsheet programs like Excel, you may want to think about another line of employment.

But if you’re a creative thinker with an inherent or developed aptitude for financial analysis. If you possess skills in forecasting and modeling, the ideal match may be a position as a corporate financial analyst.

The Bottom Line – Move to FP&A Since This Role Will Only Grow in The Future

FP&A is becoming more and more viewed by companies as a reliable source of advice and support since it enhances corporate decision-making with insight and assurance.

Therefore, a career as a financial analyst may be quite fulfilling. However, that is possible only if you have the right skill set and a natural aptitude for the job.

Do you want to move to FP&A? FP&A analysts can expect to earn 30% more than accountants. Moving to FP&A will also accelerate your path to higher management positions.

Get your INSTANT access to the exact systems and methods that have helped me become an FP&A leader.

Inventory management is a challenging endeavor. Acquiring, collecting, storing, choosing, and shipping products entail a lot of actions, procedures, and staff, with the ultimate goal of keeping customers satisfied with full, on-time purchases. As a result, I have prepared for you  a table of the top 10 Inventory KPIs.

Also, inventory KPIs can offer profound insights into a wide range of other operational concerns.

In other words, your inventory contains a wealth of important, actionable information, from sales numbers and future demand to storage performance and opportunity costs. Furthermore, here is the table of the top 10 Inventory KPIs.

Top 10 Inventory KPIs

Here are the top 10 Inventory KPIs.

#1: Average Inventory

Description: Amount of inventory a company has on hand during a period.
Formula: Average inventory = (Beginning inventory + Ending inventory) / 2

#2: Days on Hand

Description: Days on hand (DOH) is the average days before inventory is sold.
Formula: Days of inventory on hand = (Average inventory for period / Cost of sales for a period) x 365

#3: Stock-to-Sales Ratio

Description: Stock-to-sales ratio is the measure of the inventory amount in storage versus the number of sales. This broad calculation can be used to adjust the stock to maintain high margins.
Formula: Stock to sales ratio = Inventory value / Sales value

#4: Cost of Carry

Description: Percentage of total inventory value a company pays to maintain inventory in storage.
Formula: (Inventory Service Costs + Inventory Risk Costs + Capital Cost + Storage Cost) / Total Inventory Value

#5: Backorder Rate

Description: Tracks the number of delayed orders due to stockouts.
Formula: Backorder rate = (Number of Undeliverable Orders / Total Number of Orders)

#6: Sell-through Rate

Description: Comparison of the inventory amount sold and the amount of inventory received from a manufacturer.
Formula: Number of units sold / number of units received

#7: Scrap Rate

Description: Measures the quality of the inventory and is used to decrease the non-quality costs.
Formula: Scrap expenses over the period / Average inventory over the period

#8: Time to receive

Description: Measures the efficiency of the stock-receiving process.
Formula: Time for stock validation + Time to add stock to records + Time to prep stock for storage

#9: Inventory Shrinkage

Description: Measures the shrinkage due to damage, miscounts, and fraud.
Formula: Ending inventory value – Physically counted inventory value

#10: Dead Stock

Description: Dead stock is inventory no one wants to buy. Measures efficiency of the supply chain.
Formula: Amount of unsellable stock in period / Amount of available stock in the period

The Final Verdict – The Top 10 Inventory KPIs Play Integral Role in Your Company’s Success

Although the above list of 10 KPIs may sound intimidating, keep in mind that you don’t have to adopt them all at once. Therefore, pick the ones that are most appropriate for your company.

Additionally, you may identify trends that will assist you in figuring out how to enhance your inventory management procedures and ultimately turn your company into a highly efficient organization by selecting the KPIs that are right for your company’s needs and monitoring them over time.

Finally, you can take my course and learn all the necessary KPIs and get the finance expertise to become a finance professional.

A KPI, or key performance indicator, is a measurable metric that aids businesses in determining how successfully they accomplish their strategic goals and growth objectives. In addition, the KPIs in finance and FP&A may assist a company in setting goals, assessing performance, identifying organizational strengths, and ultimately determining the success of the company as a whole.

Also, you can better position yourself to evaluate how the firm is doing financially by studying these data. Then, you may make adjustments to your department’s or team’s goals in order to support important strategic goals.

KPIs in Finance and FP&A – SaaS KPIs

Your company’s performance is measured by its SaaS KPIs, and most entrepreneurs are aware that some metrics are more important than others.

As a result, in order for you to not have to worry about missing out on any of the most crucial ones when you are ready to finish your SaaS business plan, I have created a table of the 10 most significant SaaS KPIs.

#1: KPIs in Finance and FP&A – Customer Churn Rate

• Description: Percentage of customers lost in a given time frame
• Formula: Customers lost / Total Customers

#2: New Buyer Growth Rate

• Description: Speed at which you gain new customers over defined periods of time
• Formula: (New buyers this month – New buyers last month) / New buyers last month

#3: KPIs in Finance and FP&A – Lifetime Value

• Description: Revenue from a customer over the retention time period
• Formula: Customer Value * Average Customer Lifespan

#4: Customer Acquisition Costs

• Description: Amount of money a company spends to get a new customer
• Formula: Cost of Sales and Marketing / Number of New Customers Acquired

#5: Net Burn rate

• Description: Net Cash spent by a company in a specific time frame (usually monthly or normalized to a year)
• Formula: Cash Spent – Cash received

#6: Runway

• Description: Time that a startup has before they run out of finances
• Formula: Current Cash Balance / Burn Rate

#7: Average Revenue Per User (ARPU)

• Description: Average revenue generated per customer (either monthly or annually)
• Formula: Total revenue / Total number of customers

#8: SaaS Quick Ratio

• Description: Compares revenue added (new business) vs revenue lost (churn)
• Formula: (New MRRt + Expansion MRRt) / (Churned MRRt + Contraction MRRt)

#9: Monthly Recurring Revenue (MRR)

• Description: Monthly revenue from customers with a subscription
• Formula: Number of customers * Average billed amount

#10: KPIs in Finance and FP&A – Total Addressable Market (TAM)

• Description: Market size of a product/service in value that the company can achieve
• Formula: Annual Contract Value per client * Number of potential clients

KPIs in Finance and FP&A – Manufacturing KPIs

The Manufacturing KPI is a clearly defined measure used to track, evaluate, and improve production processes in terms of quantity, quality, and other cost factors.

In other words, they provide manufacturers with priceless business insights that help them achieve their objectives. Ultimately, here is the table of the top 10 Manufacturing KPIs.

#1: KPIs in Finance and FP&A – Production Activity (or Volume)

• Description: Calculates the value of the production output in monetary value
• Formula: Sum of the monetary value of all finished goods produced within a defined period

#2: Cycle Time

• Description: Average amount of time to make one product, including process, inspection, move, and queue time
• Formula: Process time + Inspection time + Move time + Queue time

#3: Takt Time

• Description: Rate at which you need to complete a product to meet customer demand
• Formula: Production available time / Customer demand

#4: Inventory Turnover

• Description: Amount of time that passes from the day an item is purchased by a company until it is sold
• Formula: Cost of Goods Sold / Average Inventory (over a period of time)

#5: Return on Assets (ROA)

• Description: Measures how effectively a company is using its resources (machine and inventory) to make a profit
• Formula: Net Income / Average Total Assets

#6: First Pass Yield

• Description: Measure of quality and performance and is at the heart of production efficiency and profitability
• Formula: Number of good products finished / Number of production orders started

#7: Yield Factor

• Description: Calculates the number of items to start to have a good finished product
• Formula: Number of production orders started / Number of good products finished

#8: Overall Equipment Effectiveness (OEE)

• Description: Compares the performance of a machine to its relative capacity
• Formula: Good Count × Ideal Cycle Time / Planned Production Time

#9: On-Time Delivery

• Description: Measures if an organization is meeting its goals in regard to promised delivery times
• Formula: On-time units / Total units

#10: KPIs in Finance and FP&A – Avoided Costs

• Description: How much money you saved by using preventive maintenance
• Formula: Assumed Repair Cost + Production Losses – Preventative Maintenance Cost

KPIs in Finance and FP&A – Cash KPIs

The greatest cash flow indicators and Cash KPIs provide information about the financial health and potential of your organization. Additionally, some of these measures may be calculated by investors using data from financial statements.

As a result, investors can better comprehend a company’s finances thanks to many of these data. To clarify, here is the table of the top 10 Cash KPIs.

#1: KPIs in Finance and FP&A – Cash Burn Rate

• Description: Net Cash spent by a company in a specific time frame (usually monthly or normalized to a year)
• Formula: Cash Spent (monthly average) – Cash Received (monthly average)

#2: Average Days Delinquent (ADD)

• Description: Measures effectiveness of collection efforts. Often used at the client level to compare with the others
• Formula: Days Sales Outstanding (DSO) – Best Possible Days Sales Outstanding (BPDSO)

#3: Operating Cash Flow (OCF)

• Description: Money generated by daily operations
• Formula: Net Income + Non-Cash Expenses – Increase in Working Capital

#4: Free Cash Flow (FCF)

• Description: Expands on the OCF concept by also excluding interest payments and including asset purchases
• Formula: OCF + Interest Payments – Asset Purchase

#5: Overdues Ratio

• Description: Measures your effectiveness of collecting cash and the quality of your receivables
• Formula: Overdues / Total Receivables

#6: Days of Inventory Outstanding (DIO)

• Description: Average number of days that a company holds inventory before turning it into sales
• Formula: Average Inventory / Yearly Cost Of Goods Sold (COGS) x 365 days

#7: Days Sales Outstanding (DSO)

• Description: Average number of days that it takes a company to collect payment for a sale
• Formula: Average Account Receivables / Annual Sales x 365 days

#8: Days Payables Outstanding (DPO)

• Description: Average number of days that it takes a company to pay its suppliers
• Formula: Average Account Payables / Yearly Cost Of Goods Sold (COGS) x 365 days

#9: Cash Conversion Cycle (CCC)

• Description: Days to convert inventory into cash flows from sales
• Formula: DIO+DSO−DPO

#10: KPIs in Finance and FP&A – Cash Reserves in Days

• Description: Measures of how long your organization could survive if cash dried up tomorrow.
• Formula: Cash Reserves / Average Daily Expenses

KPIs in Finance and FP&A – Inventory KPIs

Inventory KPIs can offer profound insights into a wide range of other operational concerns.

In other words, your inventory contains a wealth of important, actionable information, from sales numbers and future demand to storage performance and opportunity costs. Furthermore, here is the table of the top 10 Inventory KPIs.

#1: KPIs in Finance and FP&A – Average Inventory

• Description: Amount of inventory a company has on hand during a period.
• Formula: Average inventory = (Beginning inventory + Ending inventory) / 2

#2: Days on Hand

• Description: Days on hand (DOH) is the average days before inventory is sold.
• Formula: Days of inventory on hand = (Average inventory for period / Cost of sales for a period) x 365

#3: Stock-to-Sales Ratio

• Description: Stock-to-sales ratio is the measure of the inventory amount in storage versus the number of sales. This broad calculation can be used to adjust the stock to maintain high margins.
• Formula: Stock to sales ratio = Inventory value / Sales value

#4: Cost of Carry

• Description: Percentage of total inventory value a company pays to maintain inventory in storage.
• Formula: (Inventory Service Costs + Inventory Risk Costs + Capital Cost + Storage Cost) / Total Inventory Value

#5: Backorder Rate

• Description: Tracks the number of delayed orders due to stockouts.
• Formula: Backorder rate = (Number of Undeliverable Orders / Total Number of Orders)

#6: Sell-through Rate

• Description: Comparison of the inventory amount sold and the amount of inventory received from a manufacturer.
• Formula: Number of units sold / Number of units received

#7: Scrap Rate

• Description: Measures the quality of the inventory and is used to decrease the non-quality costs.
• Formula: Scrap expenses over the period / Average inventory over the period

#8: Time to receive

• Description: Measures the efficiency of the stock-receiving process.
• Formula: Time for stock validation + Time to add stock to records + Time to prep stock for storage

#9: Inventory shrinkage

• Description: Measures the shrinkage due to damage, miscounts, and fraud.
• Formula: Ending inventory value – Physically counted inventory value

#10: KPIs in Finance and FP&A – Dead Stock

• Description: Dead stock is inventory no one wants to buy. Measures efficiency of the supply chain.
• Formula: Amount of unsellable stock in period / Amount of available stock in the period

KPIs in Finance and FP&A – Headcount KPIs

The Headcount KPIs provide readers with information on the whole workforce of the firm or department of focus.

Therefore, for the great majority of HR reports, internal management choices, and finances, headcount is a necessary measurement. In addition, here is the table of the top 10 Headcount KPIs.

#1: KPIs in Finance and FP&A – Headcount

• Description: Number of active people working for a company at a certain time
• Formula: Number of active employees full-time & part-time + leasing employees

#2: Full-Time Equivalent (FTE)

• Description: 1 FTE equivalent of a standard working hours contract. Example: a part-time at 50% = 0,5 FTE
• Formula: Number of hours in the employee contract / Standard working hours

#3: Turnover Rate (also Called Attrition or Churn)

• Description: Calculates the % of people leaving the company compared to the total number of employees
• Formula: Number of departures over a period / Average total headcount

#4: Natural Attrition

• Description: Number of employees planned to leave the company based on the actual contractual situation
• Formula: Planned retirement + Planned end of limited contract

#5: Capacity

• Description: Calculates the number of hours available from the direct workforce
• Formula: Number of FTEs over a period x working hours available for one FTE

#6: Capacity Increase Flexibility

• Description: Calculates how much capacity can be increased without having to recruit new employees
• Formula: Flexible time account not used + Overtime + Temporary change of hours available in part-time contracts

#7: Capacity Decrease Flexibility

• Description: Calculates how much capacity can be decreased without having to discontinue employment contracts
• Formula: Flexible time account + Temporary change of hours available in part-time contracts + Temporary worker’s time

#8: Noria Effect

• Description: Effect of changes in compensation due to hiring and departures
• Formula: (New hires salary costs – Leavers salary costs) / Previous salary costs

#9: Absenteeism

• Description: Calculates the % of the time not worked due to illness
• Formula: Illness days / Total working days

#10: KPIs in Finance and FP&A – Time to Fill

• Description: Measures how long it takes to fill in an open position
• Formula: Average number of days between job opening and contract signed by the candidate

The Bottom Line – Understanding and Using The KPIs in Finance and FP&A Are Key to Your Success!

In conclusion, you may track and analyze a wide range of other KPIs in finance and FP&A to see how your business is doing and how your activities affect the development of common objectives.

However, the financial KPIs described above are an excellent place to start. Therefore, all finance professionals must gain a strong understanding of how these measures affect business strategy and the company as a whole.

Finally, you can take my course for finance professionals to learn all you need to become an expert in finance with valuable knowledge.

Key Takeaways

• KPIs in Finance and FP&A: Key Performance Indicators (KPIs) in finance and FP&A are measurable metrics used to evaluate a company’s success in achieving strategic goals and growth objectives.
• SaaS KPIs: Essential SaaS KPIs include Customer Churn Rate, New Buyer Growth Rate, Lifetime Value, Customer Acquisition Costs, Net Burn Rate, Runway, ARPU, SaaS Quick Ratio, MRR, and Total Addressable Market.
• Manufacturing KPIs: Critical Manufacturing KPIs encompass Production Activity, Cycle Time, Takt Time, Inventory Turnover, ROA, First Pass Yield, Yield Factor, OEE, On-Time Delivery, and Avoided Costs.
• Cash KPIs: Cash KPIs cover Cash Burn Rate, Average Days Delinquent, OCF, FCF, Overdues Ratio, DIO, DSO, DPO, CCC, and Cash Reserves in Days.
• Inventory KPIs: Inventory KPIs include Average Inventory, Days on Hand, Stock-to-Sales Ratio, Cost of Carry, Backorder Rate, Sell-through Rate, Scrap Rate, Time to receive, Inventory shrinkage, and Dead Stock.
• Headcount KPIs: Headcount KPIs comprise Headcount, Full-Time Equivalent (FTE), Turnover Rate, Natural Attrition, Capacity, Capacity Increase Flexibility, Capacity Decrease Flexibility, Noria Effect, Absenteeism, and Time to Fill.

FAQ

1. What are the KPIs in finance and FP&A?

• KPIs are measurable metrics used to assess how effectively a company achieves its strategic goals and growth objectives, aiding in performance evaluation and goal-setting.

2. How do CEOs and CFOs differ in their roles?

• CEOs focus on strategy and innovation, while CFOs manage financial stability and reporting.

3. What are some essential SaaS KPIs?

• Important SaaS KPIs include Customer Churn Rate, New Buyer Growth Rate, Lifetime Value, Customer Acquisition Costs, Net Burn Rate, Runway, ARPU, SaaS Quick Ratio, MRR, and Total Addressable Market.

4. What Manufacturing KPIs are crucial?

• Vital Manufacturing KPIs encompass Production Activity, Cycle Time, Takt Time, Inventory Turnover, ROA, First Pass Yield, Yield Factor, OEE, On-Time Delivery, and Avoided Costs.

5. What Cash KPIs should be considered?

• Essential Cash KPIs cover Cash Burn Rate, Average Days Delinquent, OCF, FCF, Overdues Ratio, DIO, DSO, DPO, CCC, and Cash Reserves in Days.

6. What Inventory KPIs offer insights?

• Inventory KPIs include Average Inventory, Days on Hand, Stock-to-Sales Ratio, Cost of Carry, Backorder Rate, Sell-through Rate, Scrap Rate, Time to receive, Inventory shrinkage, and Dead Stock.

7. What are Headcount KPIs used for?

• Headcount KPIs provide insights into workforce management, turnover rates, capacity, and other HR and financial considerations.

Sensitivity analysis is a method used in financial modeling to examine how various independent variable values impact a certain dependent variable in a given set of circumstances. In other terms, performing sensitivity analysis as an FP&A professional determines how different types of ambiguity in a mathematical model affect the overall level of uncertainty in the model.

This method is used within predetermined bounds that hinge on one or more input variables. Also, sensitivity analysis is one of the best tools for decisions making.

How Does A Sensitivity Analysis Work?

It is sometimes referred to as what-if or simulation analysis, and financial analysts and economists are the most frequent users. Furthermore, you can use it to determine how interest rates impact bond prices and to forecast share values for publicly listed corporations.

Additionally, analysts can identify which factors are more important than others in influencing a choice using this method. As a result, it gives investors perspective on how various factors may affect the prospective returns on their investments. Also, the analyst will observe how the variables change in addition to how the input variable influences the target. Above all, sensitivity analysis enables predicting using previous data, allowing for the making of crucial corporate, economic, and financial choices. Therefore, as a finance professional, you need to learn it.

How to Perform Sensitivity Analysis as an FP&A Professional?

Do you want to master it?

Check these eight sensitivity analysis tables for a perfect illustration of what you can do to help your management. ( Source: FPANDA CLUB)

• Impact of price increase on “Profit in % of Sales.”

Source: FP&A club

• Price increase needed to grow the amount of profit by X%.

*(credits to FP&A club)

• Impact of price discounts on “Profit in % of Sales.”

(credits to FP&A club)

• Compensations of price discounts by volume increase.

*(credits to FP&A club)

• Impact of cost variations on “Profit in % of Sales.”

*(credits to FP&A club)

These tables created by Marina Gorodnicheva and Anna Oblakova, PMP®, Ph.D., from FPANDA CLUB show the impact on profit from:

• Price increase
• Price discount
• Volume increase
• Cost increase
• Cost decrease

My favorite table is the last one, where we can see the effect of the cost decrease needed to reach a certain profit. For example, if your profit is at 20% of sales, decreasing the costs by 3% will increase your profit by 2,4 points (new profit being 22,4%). Therefore, this can be really handy when management is asking for a sensitivity analysis during a meeting, and you can answer straight away by showing this table. Furthermore, with these tables, management and finance can set the appropriate target of cost reduction and/or price increase to reach the expected new profit level.

Advantages and Disadvantages of Sensitivity Analysis

Here are the pros and cons of performing a sensitivity analysis as an FP&A professional.

Pros

• It serves as a thorough examination of the variables’ behavior
• Typically results in more accurate forecasts
• Aids decision-makers in determining where they need to improve the financial model in subsequent versions
• Tests any economic model under a variety of scenarios, giving it more credibility
• Displays how sensitive the outcome is to variations in particular values.

Cons

• All results are based on assumptions about historical data, which renders them prone to error.
• Analyzing the interactions and correlations between variables, as well as any potential effects, is impossible when we consider each element separately

Benefits of Using Sensitivity Analysis

Management can receive a variety of relevant input from financial models that include sensitivity analysis in a variety of situations. Here are some of the benefits of performing Sensitivity analysis:

• Identifying the influencing elements. This covers what and how various outside circumstances affect a particular project or endeavor. As a result, management is better equipped to grasp how input factors could affect output factors.
• Minimizing uncertainty. Comprehensive sensitivity analysis models teach users about the various factors that have an influence on a project, which in turn tells project participants what to watch out for or what to prepare for in advance.
• Detecting mistakes. There could have been some undiscovered flaws in the initial hypotheses for the baseline study. As a result, management may identify errors in the first analysis by carrying out several rounds of the analysis.
• Making the model simpler. Analyzing the inputs may be challenging for comprehensive models. Therefore, users may learn more about what components don’t really important and can be eliminated from the model owing to their lack of materiality by undertaking sensitivity analysis.
• Delivering outcomes. Upper management can already be on the defensive or curious about a project. However, putting together an analysis of many scenarios helps decision-makers learn about other solutions.
• Reaching objectives. Long-term strategic plans may be established by management, and they must reach certain criteria. In other words, a corporation may understand better how a project might evolve and what circumstances must exist for the team to accomplish its metric objectives by undertaking sensitivity analysis.

Conclusion – Understanding Sensitivity Analysis as an FP&A Professional Gives You an Advantage

To sum up, every FP&A professional should include sensitivity analysis in his toolbox. Above all, it reveals the model’s flaws in further detail. Additionally, it reveals how responsive the selected optimal solution is to changes in the input values of one or even more independent variables.

Ultimately, if you want to broaden your financial knowledge and learn new analyses, tips, and insights, you can take my course and emerge in the finance world.

 

Many of you asked me how to learn Financial Modeling. Even if I considered myself knowledgeable in model construction, I recently discovered that there was much more to learn. Therefore, the last weekend I finally decided to act and took a course on Financial Modeling.

Here, as a result, I will share with you what I learned.

Why I Took a Financial Modeling Course?

First, here is why I took a course in the first place…

In my 14 years of experience, I have built a lot of financial models for audit clients, business cases, and for budgets. But thanks to LinkedIn, I met experts in Financial Modeling who were building models every day and used them in other contexts (company valuation, raising capital, issuing debt, private equity, real estate, etc.).

This is why I finally took the dive and jumped into the course of an expert (Chris Reilly) to upskill myself.

Here is what I learned from my research on Financial Modeling and from Chris Reilly’s course (Chris Reilly authorized me to share the information coming from his course).

When to Use Financial Modeling?

Financial Modeling is used in many industries and in many finance roles.

Here are some of the situations where you need to use Financial Modeling:

• Raise capital
• Grow the business organically
• Sell or divest business units
• Allocate capital
• Budget and forecast
• Value a business
• Financing through debt

Also, here are some of the financial jobs requiring modeling skills:

• Investment banker
• Financial analyst
• Private equity analyst
• Strategy consultant
• Auditor
• FP&A analyst
• Controller
• Credit analyst

Although it’s commonly assumed that Analysts are the ones primarily doing the modeling, I learned nearly all Finance positions at a company would also have some exposure, even CFOs.

Professional Financial Modeling Process

In the course I took, I first learned how to optimize the structure of my financial model.

Here are the five steps I found helpful:

• Start with raw data
• Then build your sub-schedules linked to the raw data and assumptions (headcount, expenses, investments…)
• Consolidate the information in the three statements (Income Statements, Balance Sheets, Cash Flow Statement)
• Build a summary sheet for management communication and executive summary presentations
• Finish with an error check (best practice is to have an error checking sheet)

Standards in Formatting

Ultimately, this is something I was not doing before, and I started doing it when I took the course. Now by using the same standards over and over, I can simplify the way I work with Excel and reduce the number of decisions I have to make on the format.

Here is an example of what standards in formatting can look like:

Another “pro tip” I found in my research was integrating a Loom video recording into the financial model. You can quickly record a set of instructions and create a video link directly inside the model using the =HYPERLINK function.

This is a great way to “humanize” the model and help new users navigate the file when they first open it.

How to Calculate Each Line Item of The Three Financial Statements

If, like me, you have a strong understanding of accounting; you might probably think that you can calculate financial ratios without help. But the template provided (see one example below) really helped me. It had everything in one place.

Each line item is defined in simple terms, and you even get an indication of how to calculate it.

This is something that can make you save a lot of time but also help you ensure that you and your team have the same standards in calculating financial ratios.

How to Proof Check Your Model with A Control Panel

Until this weekend, I rarely saw a relevant control panel in an Excel file.

But now I know I should add this module to nearly all my Excel files.

Here is why it is helpful:

• If you’re building a time series model, an Actual date field (linked to all the dynamic cells you want to be based on your actual date), so your model can quickly update with the latest actuals once they’re available.
• Error-checking cells that flag all model issues are ideally separated into “model issues” (problems with the file) and “business issues” (strategic indicators for the company).
• Link the “Master Error Check Cell” to all other sheets in your workbook, so you’re notified of issues the right way.

In the course, you get great examples of where to have error checks (for example, there is a check about the cash movement in the balance sheet being equal to the cash flow statement).

I’ve included an example below, although this one does not have the actual date field I mentioned above.

Conclusion

These main five points are what I learned thanks to my research and Chris’ courses. Also, to top it off, I learned some great best practices for the models I’ll build in the future. If you are interested in learning professional Financial Modeling, Chris gave me an affiliate link for his course.

My recommendation is to start with this course (that’s the one I took) to master the three statements in under two hours.

Here are three other articles from my blog that could be helpful for you:

• 9 Steps to Prepare Financial Statements
• What is Budgeting
• 5 Sales Forecasting Methods