One can find many definitions of financial analysis. Investopedia defines financial analysis as “the process of evaluating businesses, projects, budgets and other finance-related entities to determine their suitability for investment.”
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FP&A Insights is a collection of useful case studies from leading international companies and thought leadership insights from FP&A experts. We aim to help you keep track of the best practices in modern FP&A, recognise changes in the ever-evolving world of financial planning and analysis and be well equipped to deal with them.
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One of the realities that FP&A professionals need to realize is people tend to be too optimistic in their financial plans. People tend to expect higher revenues, lower expenses, or less time to recover the amounts of their investments. Psychologists label these expectations as optimism bias. As an accountant, I am guided by the conservatism principle.
In this recent interview with GTNews, Larysa Melnychuk sets out the fundamentals of FP&A, its vital role within the organisation, its international aspects and future FP&A trends to watch.
As we know a simple matter of spotting bias – systematic under or over forecasting – can get surprisingly tricky in practice if our actions are to be guided by scientific standards of evidence – which they need to be if we are actually going to improve matters.
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