Finance chiefs are bolstering their strategic roles by hiring more FP&A help.It’s not news that today’s CFOs are more strategically oriented than many of their predecessors. But they are now trying to bring more of that analytical mind-set to their staffs, by adding more financial analysts than other types of finance positions.
Forecasting performance objectives are usually set in one of three ways:
1) Relative to “best-in-class” industry benchmarks.
2) Improvement over prior year performance.
3) Arbitrarily – based on what management wants or needs to happen.
All three are wrong.
How do executives expect to realize their strategic objectives if all they look at is financial results like product profit margins, return on equity, earnings and interest before interest, taxes, depreciation, and amortization (EBITDA), cash flow, and other financial results? These are really not goals – they are results. They are consequences.
There are two primary purposes of budgeting. The one most people think of first is to put a cap spending. But that’s only one reason why organizations (and people) budget.
The other reason why organizations budget is to ensure what’s important gets done. And let’s face it, just because something is important doesn’t mean it will get done. Unless it’s properly resourced and funded, it won’t happen. So let’s examine that crucial link between budgeting and execution.
Last night, European leaders announced a €130 billion bailout for Greece, with the aim of getting the country’s debt-to-GDP ratio down to 120% by 2020. Nomura has assembled 7 key points on the latest Greek bailout.
With its long-awaited IPO filing, Facebook has revealed the identity of the partner that will define it for years to come.
Hedge fund titan and philanthropist Bill Ackman, the CEO of Pershing Square Capital Management, hosted the Harbor Investment Conference yesterday at JPMorgan Chase.
In this morning’s Cashin’s Comments, UBS’s Art Cashin addresses what worries traders these days. A Greek default has been on everyone’s minds lately. But the traders Cashin has talked to think that it’s just the tip of the iceberg.
Moody’s announced that it may soon downgrade the long-term credit ratings of 17 of the largest banks in the world.
“Capital markets firms are confronting evolving challenges, such as more fragile funding conditions, wider credit spreads, increased regulatory burdens and more difficult operating conditions,” wrote the credit ratings agency in a statement.
People who perform the financial planning and analysis (FP&A) function in the finance organization put together and update the budgets and forecasts. In many companies, the “A” portion of this activity gets short shrift. That’s because the mechanical process of pulling together and collating the data takes up so much time that very little remains for analysis. The result is that planning and budgeting is a less useful business tool than it could be. Improving FP&A can give executives and managers more insightful analytics and easier access to analytical tools that support more accurate and timely planning and budgeting.