Untitled Flashcards Set

Financial Analysis

To evaluate the financial well-being and invest-ability of a business based on profitability, stability, liquidity, and rates of return.

Financial Planning and Analysis (FP&A)

Involves budgeting, forecasting, planning, and analysis of financial information to aid decision-making.

Horizontal Analysis

Compares financial data from one time period to another, also known as Trend Analysis.

Vertical Analysis

Compares many items against a base item, like revenue, expressed as a percentage.

Variance

Measures the spread between numbers in a data set, indicating how far each number is from the mean.

Variance Analysis

Analysis of the difference between actual results and budgeted or forecasted numbers.

Sensitivity Analysis

Measures how a change in one independent variable affects dependent variables.

Leverage Ratio

A ratio that measures the amount of debt compared to metrics like equity, assets, and earnings.

Insolvent

When a person or company can no longer pay their owed money; debts exceed total assets.

Valuation

A company’s total market value.