Corporate: Financial planning and Analysis

January 6, 2022
Financial Planning and Analysis

Financial Planning and Analysis (FP&A) teams play an important role in businesses by performing budgeting, forecasting, and analysis to support the CFO, CEO, and Board of Directors’ major corporate decisions.

Without rigorous financial planning and cash flow management, very few, if any, businesses can be consistently successful and grow. The FP&A team and the Chief Financial Officer are usually in charge of managing a company’s cash flow (CFO). Find out more about the CFO’s role.

For a corporation to evaluate its progress toward attaining its goals and to map out future goals and plans, corporate financial planning and financial analyst specialists use both quantitative and qualitative analysis of all operational areas of the company. Forecasting a company’s future financial results requires FP&A analysts to consider economic and business trends, review past company performance, and attempt to anticipate obstacles and potential problems.

FP&A Workflow

Income, expenses, taxes, capital expenditures, investments, and financial statements are all overseen by financial affairs professionals. Financial analysts, unlike accountants, are responsible for investigating, analyzing, and assessing the entirety of a corporation’s financial activities, as well as planning out the company’s financial future.

Corporate FP&A’s Roles

  • Evaluate if a company’s present assets and investments are the best use of its extra working capital by comparing their return on investment (ROI) and cash flow with other options available to it (e.g., other possible investments, increased stock dividends, etc.)
  • Using key financial ratios such as the debt to equity ratio, current ratio, and interest coverage ratio to assess the company’s overall financial health.
  • Identifying which of the company’s products or product lines generate the most revenue.
  • Determine which products have the highest (and lowest) profit margin – This is a separate inquiry from the one listed above, because the highest profit margin product(s) may not necessarily be the ones that generate the most total profit. For example, Product A may have a higher profit margin than Product B, but the company may sell significantly more units of Product B than Product A.
  • Assessing the cost-efficiency of each firm department in light of the percentage of the company’s financial resources consumed by each department.
  • Working with individual departments to create budgets that are then combined into a single corporate budget.
  • Making internal reports for executive leadership and assisting them in making decisions
  • Incorporating financial models and detailed forecasts of the company’s future operations into, updating, and maintaining financial models
  • Compiling historical data with budgets and forecasts, as well as performing variance analysis, to understand differences in performance and make future improvements
  • Considering the company’s potential for expansion or growth. Growth plans, including capital expenditures and investments, are being mapped out. Creating financial estimates for the next three to five years.

Finally, a firm’s financial analysts are required to provide analysis and advice to top management on how to best utilize the company’s financial resources to boost profitability and grow the company at a rapid pace while avoiding major financial risk.

How to Figure Out if FP&A is Right for You

Financial analysts that are capable of handling and effectively evaluating a mountain of different forms of data and data assessment measures are considered good financial analysts.

Financial analysts are adept at resolving problems. They can decipher the various puzzle pieces that make up a company’s finances and imagine putting them all together to come up with a variety of growth options.

Instead of working in math or using spreadsheets like Excel, you might want to consider a different career path.

Become a corporate financial analyst, on the other hand, if you’re a creative problem solver with a natural or nurtured knack for financial analysis, modeling, and forecasting.

Decision Making and Learning Skills

Financial analysts must analyze a variety of sophisticated financial options and scenarios, but they must also be capable of making solid conclusions, avoiding being paralyzed by a plethora of financial options.

The willingness to always learn is a crucial personal strength for financial analysts. Analysts must change and adapt in the same way that organizations, markets, and economies do.

In addition to honing financial skills and techniques, they are required to stay on top of business, industry, and economic developments. The finest analysts are always learning new things and improving their skills.

Financial Statements: Reading and Analyzing

Professionals in corporate financial planning and analysis must be able to read and comprehend a company’s financial statements, which include balance sheets, cash flow statements, income statements, and, in the case of public businesses, shareholders’ equity accounts, among other things.

A smart analyst not only comprehends the meaning and significance of each individual financial statement, but also recognizes the bigger picture of how the combination of assets, liabilities, cash flow, and income reflects a company’s overall financial status

Finance analysts at a company must have an equivalent, if not better, understanding of accounting journal entries and financial reconciliation statements than accounting analysts. Analysts must be able to compute and assess important financial ratios and grasp the connected features of debits and credits in order to determine where the company stands financially and how best to go from there.

Skills in Project Management

Financial planners are financial analyzers. Their mission is to advise a company’s management on the most financially efficient means of developing the company’s business and earnings based on research, data collection, and data analysis.

Financial analysts are essentially developing financial projects when they put together reports like three-year and five-year financial estimates. Leadership, cost and time management, delegation, communication skills – and overall problem-solving skills – are all qualities that skilled financial analysts bring to the table when it comes to project management.

The majority of financial analysts are well-versed in creating and analyzing reports using tools like Microsoft Excel. Performing corporate financial analysis necessitates a significant amount of data collection and consolidation, as well as the creation of several reports with numerous factors.

Financial analysts spend a lot of time looking at key financial variables like profit margins, sales volume, and inventory turnover, and then using the information to make decisions.

Financial Analyst Specialties

Corporate financial analysts can specialize in a variety of areas. Some financial analysts eventually specialize on managing firm investments, while others focus solely on getting the funding required for growth projects.

Consider what kind of role and atmosphere you’d be happiest and most comfortable in when looking for employment as a financial analyst. Some people choose to work for a large organization with well-defined career paths and the potential to advance through the ranks of a well-established company.

Some people like the challenge of assisting small businesses find their way through a period of rapid expansion, even if it means wearing many hats in terms of employment responsibilities.


Anything that indicates you’ve exhibited the capacity to assist a firm grow, especially in a cost-effective manner, is the best practical work experience outside of direct financial analysis work. This could range from increasing sales through a good window display to lowering overhead expenses through a complete overhaul of a company’s inventory system.

When looking for work as a corporate financial analyst, virtually any general business experience that displays your ability to solve problems and boost profitability can be a huge bonus on your CV.

Working at a bank or at a public accounting company can be an excellent way to get into FP&A.