6 basic financial analyzes to predict future trends

What do you understand by the term “Financial Analysis”? It is a complete system that involves several tools to effectively improve the profitability or productivity of a company. Financial Analytics collects and evaluates company financial data to understand the different facets of its business insight. With the help of graphs and tables, the collected data is displayed. It gives you a visual picture of complex information and helps you recognize the scenario much easier and smoother. By analyzing the data with the help of Financial Analytics, you can also predict behavior patterns, future trends, make informed decisions and foster the growth of your business.

Here are 6 basic financial analyzes to help you predict future trends.

1. Predictive Sales Analytics or PSA

What do you think is the most vital aspect of a company? Without a doubt, sales revenue comes in at no. 1 place and this is what decides the future of your company. When you take the PSA approach, you can easily predict the sales figure for a given month. You can get an idea of ​​whether the sales figure is going to fall during a certain period.

Consequently, you can review the strategies to boost sales or implement new ones to calculate how effective your prediction is. When you get a clear picture of your sales generation, your stresses and panic attacks are much less. You can take a variety of competencies and strategic approaches to get to know your customers, plan effectively, and achieve a smooth workflow.

2. Product Profitability Analysis or PPA

In this competitive market, you need to know exactly when to make your investments. It can take quite some time to estimate the profit, clearly analyzing the product and its cost.

In such a situation, PPA or Product Profitability Analytics comes as the best solution to evaluate the product and determine its profit line. It can help you make an informed decision by getting an instant understanding of all the products and services you offer. To strategically promote your products, you must know the tastes and preferences of your customers. Once you are aware of the customer demand using the PPA analytics tool, the product promotion strategy becomes easy.

3. Customer Profitability Analysis or CPA

Who is your potential customer? Whether you’re an e-commerce giant, a cloud hosting service provider, or any business in the search engines, recognizing your prospects can always benefit your marketing efforts. There are two types of client-

• The one that adds value to your company
• One that brings risk to your company

Your revenue generation can increase if you can differentiate between your profitable and unprofitable customers. Your marketing efforts can get a boost if you can start to recognize your customers by extracting their detailed information. CPA or Customer Profitability Analytics can help you analyze your customer behavior.

4. Shareholder Value Analysis or SVA

Attach the value of your business based on the returns your shareholders receive from your business with the help of Shareholder Value Analytics or SVA. This tool also helps determine risk percentage and shareholder value. When SVA is used with revenue and profit analysis, its execution is better and easier to understand.

5. Cash Flow Analysis or CFA

When running a business, you need to understand how much capital your business requires to run smoothly. Cash Flow Analytics helps predict capital outflows and inflows, future capital investment requirements, and also the amount you may need to support corporate operations.

6. Value Driver Analytics or VDA

A positive approach is a basic requirement for running a successful business. Furthermore, planning and implementing well-planned strategies are also important to achieve the desired results. Your business goals can be properly furthered if you can understand the financial disruptions that may affect your business. Related to this, the VDA tool can help you analyze the strategic drivers for your business to achieve the expected results.

With a better understanding of financial analytics, functional KPIs, customer profitability, and sales, you can help your business increase shareholder value and revenue. It will also help you understand your drawbacks in order to overcome them for a great end-user experience. To achieve your organization’s goals, embrace financial analysis tools.