Challenging market and rising costs put businesses into a non-stop race for efficiency and expense reduction. Cost management and identification of real expenditure sources in the production process are among the highest priorities for Financial Planning and Analysis (FP&A) and the entire finance department in almost every company.
In times of uncertainty, the failings of systems and measures are brought sharply into focus. Managing profitability often requires a complete re-think of how an organisation plans and the supporting systems that can help sustain profits in both the short and long term. That’s the subject of this paper.
Nowadays cash flow is a trending topic and especially in FP&A where we are generally focused on P&L forecast and management. When we talk about cash flow there are three main pillars: liquidity, valuation, and performance.
Providing decision support on product offerings in an online marketplaces environment requires digging deep on the granularity of the key business drivers to evaluate success. Using a method called “A/B testing” allows an FP&A leader to easily build a framework on key criteria to better understand the various behavioural impacts that consumers apply in different scenarios and to analyse their performance.
There is no hiding that companies had to look hard and rely on deep financial analysis to weather a storm like most of us witnessed in 2020. One of the key components was the growing focus on the Profitability of their services and products line. Profitability became front and center, whether it was via cost management or revenue or investment management or ALL of the above.
While profitability is an easy concept to grasp, it is notoriously difficult to manage, especially in rapidly changing market conditions. How can we manage profitability in times of uncertainty? One answer is by using the profitability analysis framework.