Financial Analysis

Financial Analysis is a process to analyze the financial status and related entities of a company to be in a better position to evaluate its strength and profitability. It also helps deduce the credibility of investing into the business. A financial model, on the other hand is the financial representation through which analysis is made possible.

It identifies the target market, the potential competitors, and the analysis of any strategy in frequent use. It really depends on the underlying question the research aims at answering. However, it’s not wrong to set up a business research even prior to the business plan. This validates the strength and accuracy of the business plan, also making it look more impressive. Since a business plan is one of the basic pillars in setting up a business, the importance of a business research is undeniable.

Different types of ratios helps a business analyze its financial progress at a certain point in time. This helps in building useful tactics and strategies to cope or maintain the financial position. Financial Analysis is a business’s need, which is why Academia Pro pays additional attention drafting afore mentioned statements. This helps in a better representation and in turn a better overall judgment of the true strengths and weaknesses of a business.

Break Even Analysis helps the business find out the least amount of revenue it must generate to make a profit. This helps the business do a prior planning to acknowledge all risk factors. The breakeven point formula = Fixed costs / Price (unit) – variable costs