6 Basic Financial Analytics to Predict the

Future Trends

What do you understand by the term "Financial Analytics"? It is a complete system involving
various tools to effectively enhance the profitability or productivity of a company. Financial
Analytics collect and assess the financial data of the company to gain an understanding of the
different facets of your business prospect. With the help of graphs and charts, the collected data
is displayed. It gives you a visual picture of the complex information and helps you to recognize
the scenario much easily and smoothly. By analyzing the data with the help of Financial
Analytics, you can also predict the behavioral patterns, the future trends, take mindful decisions
and nurture your business growth.

Here are 6 basic Financial Analytics to help you predict future trends.

1. Predictive Sales Analytics or PSA

What do you think is the most vital aspect of a company? Undoubtedly, the sales revenue comes
at the no. 1 spot and this is what decides the future of your company. When you adopt the PSA
approach, you can easily predict the sales figure for a certain month. You can get an idea if the
sales figure is going to drop for a certain period.

Accordingly, you may revise the strategies for boosting the sales or implementing the new ones
to calculate how effective your prediction is. When you get a clear picture of your sales
generation, your tensions and panic attacks are much lesser. You can adopt a range of
competencies and strategic approaches to know about your clients, plan effectively, and achieve
hassle-free workflow.

2. Product Profitability Analytics or PPA

In this competitive market, you must know when you should exactly make your investments. It
can be quite a time consuming to make an estimate of the profit, analyzing the product and its
cost distinctly.

In such a situation, PPA or the Product Profitability Analytics comes as the best solution for
evaluating the product and determining its profit-line. It can help you to make an informed
decision by gaining an instant understanding of all your offered products and services. In order to
strategically promote your products, you must know the likes and preferences of your customers.
Once you are aware of the customer's demand using the PPA analytic tool, strategizing product
promotion becomes easy.

3. Customer Profitability Analytics or CPA

Who is your prospective customer? Whether you are an e-commerce giant, a cloud host service
provider, or any business across the search engines, recognizing your prospective clients can
always benefit your marketing endeavors. There are two types of client-

 One who brings value to your company

 One who brings risk to your company

Your revenue generation can jump up if you can differentiate between your non-profitable and
profitable clients. Your marketing efforts can get a boost if you can start recognizing your
customers by extracting their detailed information. CPA or Customer Profitability Analytics can
help you in analyzing your customer's behavior.

4. Shareholder Value Analytics or SVA

Adjudge your business value on the basis of the returns your stockholders receive from your
business with the help of Shareholder Value Analytics or SVA. This tool also helps in
determining the risk and value percentage of the shareholders. When SVA is used with revenue
and profit analytics, its execution is better and easy to comprehend.

5. Cash Flow Analytics or CFA

While running a business, you must understand how much capital your business requires to
function smoothly. The Cash Flow Analytics helps to predict the outflow and inflow of capital,
future capital investment requirements, and also the amount that you may require to foster
corporate operations.

6. Value Driver Analytics or VDA

A positive approach is a basic requirement to run a business successfully. Apart from it, planning
and implementing your well-planned strategies are also important to achieve the desired results.
Your business objectives can be nurtured rightly if you can understand the financial disturbances
that may affect your business. In relation to this, the VDA tool can help in analyzing the strategic
drivers for your business to achieve expected outcomes.

With the better knowledge of the financial analytic measures, functioning KPIs, customer and
sales profitability, you can help your business to increase your shareholder values and revenues.
It will also help you to understand your drawbacks to overcome them for great end-user
experience. In order to achieve the goals of your organization, embrace the financial analytic
tools.

Article Source: https://EzineArticles.com/expert/Moupriya_Das/1626848