Financial Analysis Task

A Financial Analysis Task is a financial reasoning task that is a domain-specific analysis task that assesses the viability, stability and profitability of a business or project.

• AKA: Financial Diagnostics, Business Financial Assessment.
• Context:
  • Input(s): Financial Statements, Business Data, Market Information
  • Output(s): Financial Analysis Report, Financial Recommendation, Business Decision Support
  • Performance Measure(s): Analysis Accuracy, Prediction Quality, Decision Impact
  • ...
  • It can range from being a Simple Financial Analysis to being a Complex Financial Analysis, depending on its analysis scope.
  • It can range from being a Historical Financial Analysis to being a Predictive Financial Analysis, depending on its temporal focus.
  • It can range from being a Quantitative Financial Analysis to being a Qualitative Financial Analysis, depending on its analysis approach.
  • It can range from being a Single-Entity Analysis to being a Comparative Financial Analysis, depending on its analysis coverage.
  • It can range from being a Standard Financial Analysis to being a Custom Financial Analysis, depending on its analysis purpose.
  • ...
  • It can be supported by a Financial Analyst or a Financial Software System.
  • It can assess Financial Risk.
  • It can determine Business Valuation.
  • ...
• Examples:
  • Based on Analysis Purpose, such as:
    • Business Viability Analysiss, such as:
      • Business Fundamentals Analysis, for operational assessment
      • Corporate Financial Modeling Task, for performance prediction
    • Financial Performance Analysiss, such as:
      • Budget-to-Actuals Analysis, for variance assessment
      • Ratio Analysis Task, for financial health evaluation
  • Based on Analysis Scope, such as:
    • Internal Financial Analysiss, such as:
      • Working Capital Analysis, for liquidity assessment
      • Cost Structure Analysis, for efficiency evaluation
    • External Financial Analysiss, such as:
      • Market Position Analysis, for competitive assessment
      • Industry Comparison Analysis, for peer benchmarking
  • Based on Decision Type, such as:
    • Investment Decision Analysiss, such as:
      • Capital Investment Analysis, for project evaluation
      • Stock Investment Analysis, for equity assessment
    • Operational Decision Analysiss, such as:
      • Make-or-Buy Analysis, for production decisions
      • Resource Allocation Analysis, for efficiency optimization.
  • ...
• Counter-Examples:
  • Legal ANalysis, ...
  • Product Planning, which focuses on product development
  • Medical Diagnostics, which analyzes health conditions
  • Technical Analysis Task, which focuses on market patterns
  • Strategic Planning Task, which focuses on business strategy
• See: Financial Planning, Business, Project, Financial Statement, Stocks, Loan, Working Capital, Financial Model, Investment Analysis.

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References

2014

• (Wikipedia, 2014) ⇒ http://en.wikipedia.org/wiki/financial_analysis Retrieved:2014-10-8.
  • Financial analysis (also referred to as financial statement analysis or accounting analysis or Analysis of finance) refers to an assessment of the viability, stability and profitability of a business, sub-business or project.

    It is performed by professionals who prepare reports using ratios that make use of information taken from financial statements and other reports. These reports are usually presented to top management as one of their bases in making business decisions.

    • Continue or discontinue its main operation or part of its business;
    • Make or purchase certain materials in the manufacture of its product;
    • Acquire or rent/lease certain machineries and equipment in the production of its goods;
    • Issue stocks or negotiate for a bank loan to increase its working capital;
    • Make decisions regarding investing or lending capital;
    • Other decisions that allow management to make an informed selection on various alternatives in the conduct of its business.

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