Why Wait for the Future, When You Can Predict It with Predictive Business Analytics?

Analytics, in general, refers to the collection and transformation of data for meaningful insights and business decisions. With big data and business intelligence rapidly gaining importance in today’s world, there is growing demand for analysts and data scientists. According to Mc Kinsey Global Institute’s Report on Big Data, demand for analytical talent in the United States could be 50% – 60% higher than its projected supply by 2018 – there could be a shortfall of around 1.5 million data-savvy managers and analysts. This clearly highlights the fact that a shortage of analytics professionals could become a serious constraint making analytics a lucrative career option for many. A career in analytics could be pursued in any industry – today organizations in most sectors and most fields of work have analytic divisions driving their strategic decisions

Who is a Business Analyst?
A business analyst is someone who analyses an organization’s domain (real or hypothetical) and documents its business or processes or systems, assessing the business model or its integration with technology.

If you are an aspiring business analyst, then I am sure that you’d be searching on Google for the answer and by the end of this article, I assure you that you’ll get that answer. Well becoming a business analyst is no rocket science, just follow the simple steps mentioned below and you’ll be ready to take up the role of a Business Analyst in any reputable company.

Take up a Business Analytics Certification Course
To develop the analytical skills, it is imperative to get trained in business analytics. Good training means increased chances of getting a good job in a good company. If you are a working professional and cannot spare time for the classroom training, then try the search for institutions that provide online courses. Before taking up the course just check the following:

Research about the good institutes that provide business analytics training
Check their course curriculum and see if it matches your expectations
Check what value the certificate holds
Check if any placement assistance is provided

One good institute that I know is EduPristine, and has recently launched the Predictive Business Analytics Course. At EduPristine you can expect a mix of case studies, analytical tools, and the hallmark pedagogy of learning through a plethora of hands-on and real-life scenarios. Finishing the course with our state-of-the-art Capstone project helps the participants to season their skills as a Business Analytics professional; thus, making them ready for the job role. The methodology offers real-life challenges, compelling learners to apply concepts in the class and prepare for career realities.

Sensitivity Analysis: Definition, Uses & Importance

What is Sensitivity Analysis?

Financial risk modeling takes sensitivity analysis to the next level and helps in assessing the probability and potential impact of unfavorable outcomes. Based on the assessments, various decisions with respect to managing, hedging or transferring risks are taken.

Sensitivity analysis is one of the tools that help decision makers with more than a solution to a problem. It provides an appropriate insight into the problems associated with the model under reference. Finally, the decision maker gets a decent idea about how sensitive the optimum solution is chosen by him to any changes in the input values of one or more parameters.

Have you ever been caught in a situation regarding data sensitivity analysis in Financial Modeling? If you have faced a problem before, find your answer right here!

Measurement of sensitivity analysis

Below are mentioned the steps used to conduct sensitivity analysis:

·         Firstly, the base case output is defined; say the NPV at a base case input value (V1) for which the sensitivity is to be measured. All the other inputs of the model are kept constant.

·         Then the value of the output at a new value of the input (V2) while keeping other inputs constant is calculated.

·         Find the percentage change in the output and the percentage change in the input.

·         The sensitivity is calculated by dividing the percentage change in output by the percentage change in input.

This process of testing sensitivity for another input (say cash flows growth rate) while keeping the rest of inputs constant is repeated till the sensitivity figure for each of the inputs is obtained. The conclusion would be that the higher the sensitivity figure, the more sensitive the output is to any change in that input and vice versa.

For Sensitivity Analysis follow the following steps

First LINK the output you want to check sensitivity of? (IN FMCG case link the share Price or EV)

Next decide the variable you want to check the sensitivity of (e.g. WACC; Terminal Growth rate; tax rate etc.)

Let’s say we selected WACC and Terminal Growth which originally n the model is 10.7% and 5%. Now take the range for two variable which will be 8.7; 9.7; 10.7;11.7 and 12.7% for WACC and let’s say 3; 4; 5; 6; 7% for T. Growth. place these numbers on the cell next to your linked cell in step one above. So, if you have linked EV in the cell G30 Wick will come in the cell from H30 - L30 and T Growth will come in cell G31 to G35

Now select the cell from G30 to L35 and go to data tab - "What if Analysis" - "Data table"

Now in the window which pops up in the "row input" select the cell where you have originally calculated your WACC and in Column select cell where you have originally calculated T Growth Rate and press enter

Uses of Sensitivity Analysis

·         The key application of sensitivity analysis is to indicate the sensitivity of simulation to uncertainties in the input values of the model.

·         They help in decision making

·         Sensitivity analysis is a method for predicting the outcome of a decision if a situation turns out to be different compared to the key predictions.

·         It helps in assessing the riskiness of a strategy.

·         Helps in identifying how dependent the output is on a input value. Analyses if the dependency in turn helps in assessing the risk associated.

·         Helps in taking informed and appropriate decisions

·         Aids searching for errors in the model

Conclusion

Sensitivity analysis is one of the tools that help decision makers with more than a solution to a problem. It provides an appropriate insight into the problems associated with the model under reference. Finally, the decision maker gets a decent idea about how sensitive the optimum solution is chosen by him to any changes in the input values of one or more parameters.

What are Accounting Standards and why do they matter?

What are Accounting Standards?

Accounting standards exist to ensure that accounting decisions are made in a unified and reasonable way for effective functioning of the businesses and capital markets. The most important role of accounting standards is the universality that they bring to financial record keeping of both the government as well as non-government organizations.

They are designed to enforce transparency which is especially important in the case of public entities, including the governments or publicly traded companies. The standards enable investors to make comparisons on a like-for-like basis and provide assurance that key elements of a company’s financial controls and systems have been assessed and reported on.

Why use accounting standards?

The International Financial Reporting Standards (IFRS), which was developed by the International Accounting Standards Board, are a set of accounting rules followed by, or being adopted by more than 100 countries. All the listed companies operating in and from the European Union member nations are required to use IFRS after the 28-nation bloc adopted them in 2005. Meanwhile in the US, these standards are called the generally accepted accounting principles or GAAP, the set of standards, guidelines and procedures developed by the Financial Accounting Standards Board and are to be used when accounting for the affairs of most governmental and non-governmental bodies.

Recent reports reveal that all other major economies have initiated a process to consider convergence or adoption of IFRS in the coming future. Since 2007, even the US has allowed the cross-listed firms on the country’s stock markets to file statements prepared under IFRS. Due to the increasing globalization of financial markets and of companies, the use of a single set of financial reporting standards across countries also reduces the cost of preparing the consolidated financial statements of groups made up of companies conducting business worldwide.

Experts suggest that without accounting standards, an investor who has studied the financial statements of a large publicly traded company would not know whether to trust the findings on those statements. Standards mean that taxpayers can see how their tax dollars are being spent and regulators can ensure that laws are followed.

A practicing or a prospective accountant both need to have a thorough understanding of the accounting principles and standards while preparing the financial report of a government or private entity. However, if a person is simply preparing individual income tax statements, understanding of these standards probably isn’t as important.

IFRS accounting standards:

Some of the most important IFRS are listed below in order of their relevance:

IFRS 1: First-time Adoption of International Financial Reporting Standards

IFRS 2: Share-based Payment

IFRS 3: Business Combinations

IFRS 4: Insurance Contracts

IFRS 5: Non-current Assets Held for Sale and Discontinued Operations

IFRS 6: Exploration for and Evaluation of Mineral Assets

IFRS 7: Financial Instruments: Disclosures

IFRS 8: Operating Segments

IFRS 9: Financial Instruments

ACCA Exam Dates and Syllabus 2018

Why to study ACCA?

ACCA makes you eligible to follow your own path to a rewarding and fulfilling career in any sector that you want to work in, in any financial role and position that you would like to work in. It opens doors for you in the corporate world that would have been difficult to prise open.

ACCA is a broad-based certification that opens the doors for diverse rewarding careers in accounting, banking, management, and consulting. You can easily reach influential senior roles in organizations by leveraging your skills with ACCA course.

ACCA doesn’t have a single definite pattern for all of its exams. Broadly the entire ACCA Exam Structure and Pattern are divided into different levels and modules and the ACCA Course pattern varies with them and within them. Let’s try to understand it from the beginning.

ACCA Exam Dates:

The ACCA exam dates for 2018 are as follows:

Exam entry period           Early closing date             Standard closing date     Late closing date

June 2018 exam session 12 February 2018              30 April 2018      7 May 2018

September 2018 exam session   14 May 2018       30 July 2018        6 August 2018

December 2018 exam session    13 August 2018  29 October 2018               5 November 2018

ACCA syllabus offer comprehensive and cutting-edge guidance for all 14 papers in ACCA comprising of ‘Knowledge, Skills, and Professional’ levels.

Subjects Covered:

Thus, there are three levels to the exams. The topics covered in each level are:

Applied Knowledge: Accounting in business(F1), Management Accounting(F2) and Financial Accounting(F3).

Applied Skills: F4 Corporate And Business Law (LW), F5 Performance Management PM, F6 Taxation (TX), F7 Financial Reporting (FR), F8 Auditing and Assurance (AA) and F9 Financial Management (FM)

Professional: There are three levels to this; Professional Essentials which contain Governance, Risk & Ethics (P1), Corporate Reporting (P2) & Business Analysis (P3); Professional Options which contain Advanced Financial Management (P4), Advanced Performance Management (P5), Advanced Taxation (P6) & Advanced Auditing & Assurance (P7) and Strategic Professional which contain Strategic Business Leader & Strategic Business Reporting.

To know more about the ACCA syllabus, click here: https://www.edupristine.com/courses/acca-course