What is Financial Analysis and Reporting?

A Financial Analysis and Reporting Overview. There are a few fundamentals that can’t be overlooked for any business and having solid financial analysis and reporting procedures at your disposal is critical. Although there are many variations, it’s widely accepted that one of these reports should have a number of sections that are the same for each.

Valuation

This is considered the meat and potatoes of any financial analysis and reporting template. A larger company needs to make sure that it has some kind of independent template to value its stocks and a discounted cash flow analysis is one of the tools most often used to help set this benchmark. There are other ways to come to a valuation including looking at a company’s book value. Because every situation is different, the relative value is a third option. Understanding which of these is most relevant is the domain of a professional financial analyst who can give you the kind of overview you need to make decisions.

Risk Factors

Considering the volatility of today’s marketplaces, any financial analysis and reporting overview will have risk factors as a major foundation. There are more than a few different considerations that need to be taken into account here including the industry where the company operates.

Company Overview

Of course, any company that is looking to have investors should have a good company overview to lead off any financial analysis and reporting framework. Details here should include any advantages the business has over its competitors as well as a few words on the market in which it operates. Having a complete picture of this business is an important overview not only for investors but so each expert working within the framework can see the big picture.

The importance of having good financial reporting can’t be understated. Not only is this a good snapshot of how the company is performing over time, but it also supplies valuable information to the public if the company is deciding if it wants an IPO.

There are two reasons for undergoing a comprehensive financial analysis and reporting procedure. First and foremost, it allows management to make well-informed decisions. Second, one of these reports provides valuable information to stakeholders so they can be in the loop.

These financial reports are often included in the statements that a company makes publicly as opposed to management reports which are more internal.