Every company has employees who analyze its financial data and
enhance its decision support process by providing their insights and analyses
to management. In some companies the CFO, controller, or accounting staff
performs this function in addition to their regular responsibilities. In other
companies the process is more formal, with financial analysts, cost
accountants, and even whole departments dedicated to this function. No matter
which way it's done, effective financial analysis is really more a way of
thinking than a series of steps or processes.
Financial
professionals who are effective at financial analysis can add value to their
companies and excel in their careers. Good analysts identify cost-savings
ideas, revenue growth opportunities, and strategies for productivity
improvements. Even people who work with financial data but don't do regular
analysis (general ledger, accounts payable, financial systems staff) can
benefit by building an analytic approach into the way they perform their jobs.
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