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Why your business needs financial analysis services
October 20, 2021 at 4:00 AM
A sheet with an organization's performance metrics over a period of time.

Initiating new programs and projects for your business can be a potentially costly venture. It’s important for the health of your company that you understand how these new initiatives will impact your financial health and bottom line. Detailed, comprehensive financial analysis is the best way to gain this kind of understanding, and it’s easiest to get a sense of how to put these insights to practical use for your business when you have the help of expert consultants.

That’s where NFA Consulting comes in. We’ve offered detailed financial analysis services to clients in private industry as well as government and academia, and our extensive experience with this variety of different entities gives us a stronger understanding of the cost concerns associated with many different kinds of policies and projects. These concerns are essential to consider ahead of time to ensure that your organization has the bandwidth to launch these initiatives effectively.

In this blog post, we’ll go into greater detail about what financial analysis involves and how to put analysis insights into practice at your organization.

What does financial analysis involve?

As stated in this Investopedia article, financial analysis involves evaluating economic trends, setting financial policies for your organization, establishing long-term plans for your operations, and identifying projects or areas of operation worth investing in. Data from your comapny’s financial statements, including your income statement, balance sheet, and cash flow statement, is used to perform this analysis.

The type of financial analysis used to determine where an organization should invest its internal resources is called corporate financial analysis. This often includes a few different key ratios and data points, including net present value and internal rate of return. It also often involves using an business’ past performance data, typically from its net earnings or profit margin, to estimate future performance.

Putting insights into practice

Putting the insights generated from financial analysis into practice generally boils down to determining where a company will direct its internal resources and when it will do so. Estimating the company’s future performance through past data, for example, gives you a sense of seasonal trends and which of your operations are most relevant to those trends. This can give you a better idea of what kinds of projects are best to invest in, when they should ideally launch, and how long your organization should be focusing on them.

NFA Consulting helps businesses in this way by estimating the potential cost of proposed projects and programs for a given period of time. This is helpful for ensuring that the appropriate resources are devoted to those initiatives and that a business actually has the financial capability to fund, plan, and execute them for the proposed window of time.

Specifically, our analysis helps by:

  • Translating system/functional requirements into cost requirements
  • Assessing how changes in schedules, programs, strategies, and performance level may impact your organization’s finances
  • Estimate a proposal’s necessary budget and provide guidance for adhering to it
  • Assess the political impacts of a proposal and provide guidance for managing them

Work with NFA Consulting for expert cost estimation and financial analysis services

The financial impacts of new projects and programs can have reverberating effects throughout your entire organization, and it’s essential to put a detailed plan into place on the basis of comprehensive insights. Failing to do your due diligence before putting these initiatives into practice can introduce unnecessary risk to your company.

When you’re looking to institute these kinds of changes at your organization, get expert help to determine the ideal way to launch them for the lowest risk and biggest potential benefits for the company’s financial health. Get in touch with us now to find out how we can help you.