Financial data is information that pertains to the financial health of an organisation or the economy. It includes data on assets that are deemed to be liabilities, equity income, and cash flow. Data sources that are traditional include financial reports, statements of earnings and SEC filings.
Modern business organizations require instant information and insights to make critical decisions and maintain their competitive edge. Recent technological advancements and the promise of insight from big data have made analytics more vital than ever before. Financial data analytics is the process of analysing and interpreting financial data to find valuable insights.
Analyzing data requires specialized tools to detect patterns and trends in a company’s performance. It also involves evaluating past performance to predict the future, and making recommendations on how to improve performance.
Data analysis can take a long time. It involves several steps, which include collecting data from different sources, cleaning the data and prepping it for analysis, calculating the figures and comparing them, and finally interpreting the results. To reduce the burden, a purpose-built financial data analytics software can help streamline the process by automating tasks and reducing manual labor.
Financial analytics tools as well as automating repetitive processes, can provide useful insights that can improve the value of a business. For instance, they could find patterns of over-ordering inventory or a lapse in manufacturing workflows which reduces waste and saves resources. The information can be used in the creation of budgets and forecasts that will aid companies in reaching their financial goals. They can also be used to determine and reduce the risk of potential problems.
