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Excel for FP&A and Accounting: Essential Skills Every Finance Professional Needs

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In today’s finance world, Excel is more than just a tool; it’s an essential skill that drives data analysis, budgeting, forecasting, and strategic decision-making. For professionals in FP&A (Financial Planning and Analysis) and accounting, Excel mastery is crucial. But what are the core skills you need, and how can you make the most out of Excel’s powerful features? Let’s dive in.

Why Excel is Critical for FP&A and Accounting

From organizing data to performing complex financial analysis, Excel provides the versatility and functionality that finance professionals depend on. Here’s why it’s indispensable:

  • Data Analysis and Reporting: Excel’s formulas and pivot tables allow finance professionals to quickly analyze and interpret large datasets, transforming raw data into meaningful insights.
  • Forecasting and Budgeting: Excel offers a suite of functions for modeling future performance, helping businesses make data-driven forecasts and create realistic budgets.
  • Streamlined Workflows: With shortcuts and automation tools like macros, Excel allows you to save time and reduce manual errors, streamlining repetitive tasks.
  • Decision Support: Excel’s flexibility lets you build financial models that assess profitability, evaluate investment options, and make informed financial decisions.

Core Excel Skills Every FP&A and Accounting Professional Should Master

Here are some of the top Excel skills and functions you need to become highly effective in FP&A and accounting:

1. Data Manipulation and Cleaning

Handling large datasets is a daily task in finance. These functions are essential:

  • FILTER, SORT, and UNIQUE: Quickly filter data, sort it in specific orders, and remove duplicates for a clean dataset.
  • TEXT Functions (e.g., LEFT, RIGHT, MID): Extract specific information from text fields (like codes or IDs) for easier analysis.
  • IFERROR: Handles errors gracefully, ensuring that your reports look professional even when data is missing or inconsistent.

2. Key Formulas for Calculations

Basic yet powerful formulas form the foundation of financial analysis in Excel:

  • SUM, AVERAGE, MIN, MAX: Essential for calculating totals, averages, and finding the highest and lowest values in datasets.
  • IF and Nested IF Statements: Set conditions in calculations, allowing you to create logic-based reports or flag values based on criteria.
  • COUNTIF and SUMIF: Useful for counting and summing cells based on specific criteria, making it easier to analyze trends in data.

3. Advanced Lookup Functions

Lookup functions save you from manual data entry and ensure accuracy:

  • VLOOKUP and XLOOKUP: Quickly find data from different tables or datasets. XLOOKUP, in particular, offers more flexibility and replaces VLOOKUP’s limitations.
  • INDEX and MATCH: More versatile than VLOOKUP, this combination allows for dynamic lookups, especially useful in multi-dimensional datasets.

4. Pivot Tables and Pivot Charts

Pivot Tables are a finance professional’s best friend. They help you summarize data quickly, enabling insightful analysis with minimal setup. With Pivot Charts, you can visually represent data trends, making your reports more engaging and easy to interpret.

5. Data Visualization

Presenting data in an accessible, visual format is key to communicating insights:

  • Conditional Formatting: Highlight cells based on specific conditions (e.g., budget variances, red for expenses over budget), making data trends easy to spot.
  • Charting: Use bar charts, line charts, and pie charts to represent financial data visually, allowing decision-makers to grasp insights at a glance.

6. Forecasting and Scenario Analysis

Advanced forecasting skills help finance professionals make predictions based on historical data:

  • FORECAST.LINEAR and FORECAST.ETS: These functions allow for forecasting based on linear trends or seasonality, useful for planning sales, expenses, and cash flow.
  • Scenario Manager and Data Tables: Analyze how changes in key inputs affect financial outcomes, enabling you to make better strategic decisions.

7. Automation with Macros

Macros allow you to automate repetitive tasks, making your workflow faster and more efficient. They’re particularly useful for tasks like formatting reports, refreshing data, or running multiple calculations at once.

Pro Tips for Mastering Excel in FP&A and Accounting

1. Practice Consistency in Formatting and Organization

  • Consistent formatting—like standardized fonts, colors, and number formats—makes spreadsheets easier to read and reduces errors. Organizing your data logically also helps you locate information faster.

2. Embrace Keyboard Shortcuts

  • Mastering shortcuts (like Ctrl + Shift + L for filters or Alt + = for autosum) saves time and reduces reliance on the mouse, allowing for a faster, smoother workflow.

3. Use Templates for Recurring Tasks

  • Templates for budgeting, forecasting, and variance analysis allow you to focus on data input rather than setup, helping you save time and maintain accuracy across reports.

4. Make Use of Named Ranges

  • Named ranges allow you to label cells or cell ranges, making formulas easier to understand and manage. This is particularly useful in complex workbooks with multiple data sets.

5. Keep Learning!

  • Excel has a vast range of capabilities, and the more you learn, the more value you can bring to your role. Explore new functions, stay updated on Excel’s latest features, and continually practice your skills.

The Bottom Line: Excel is Essential for Success in FP&A and Accounting

Excel is a powerful tool in the finance and accounting fields. By mastering the essential skills and advanced techniques outlined here, you can increase your productivity, reduce errors, and make a bigger impact in your organization. Whether you’re just starting out or looking to enhance your expertise, a solid foundation in Excel is a must-have for any finance professional.

Ready to Level Up?

Explore our Excel crash course to gain hands-on practice with these functions and take your Excel skills from basic to advanced. With dedication and practice, you’ll be well-equipped to tackle any financial analysis task that comes your way.

EBITDA vs. Net Income: Key Differences Explained

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Understanding the difference between EBITDA and Net Income is crucial for anyone involved in finance, whether you’re a business owner, investor, or financial analyst. Both metrics provide insights into a company’s profitability, but they do so in different ways and serve different purposes. Lets understand the differences.

What is EBITDA?

EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is a measure of a company’s overall financial performance. It strips away non-operational expenses to provide a clearer picture of operational profitability.

Interested in understanding EBITDA and performing income statement analysis with more details. Check out the advanced income statement (and EBITDA) analysis course: P&L and EBITDA analysis course. Specially, if you are involved with presenting income statement and financial results during management meetings, this course is essential to understand the drivers behind EBITDA performance and how to compare and present results vs budget and previous periods.

Calculation of EBITDA

EBITDA is calculated using the following formula:

EBITDA =Net Income + Interest + Taxes + Depreciation + Amortization

For example, if a company has a net income of $5 million, interest expenses of $1 million, taxes of $2 million, depreciation of $3 million, and amortization of $1 million, the EBITDA would be:

EBITDA=5+1+2+3+1=12 million dollars

What is Net Income?

Net Income, also known as net profit or the bottom line, is the total profit of a company after all expenses have been deducted from total revenue. This includes operating expenses, interest, taxes, and non-cash items like depreciation and amortization.

Calculation of Net Income

Net Income is calculated as: Net Income=Total Revenue−Total Expenses

For example, if a company reported total revenues of $394 billion in 2023 and total expenses (including cost of goods sold, operating expenses, interest, and taxes) of $300 billion, the net income would be: Net Income=394−300=94 billion dollars

Key Differences Between EBITDA and Net Income

1. Inclusion of Non-Operational Costs

EBITDA excludes interest, taxes, depreciation, and amortization, focusing solely on operating performance. Net Income includes these costs, reflecting the overall profitability of the company after all expenses.

2. Impact of Capital Structure

EBITDA is unaffected by a company’s capital structure (i.e. how the business activities are financed e.g. shareholder’s equity vs debt) since it excludes interest expenses. Net Income, however, is influenced by the capital structure because it includes interest payments.

3. Tax Considerations

EBITDA is before tax, providing a pre-tax measure of profitability. Net Income is after tax, giving a post-tax measure.

4. Non-Cash Items

EBITDA excludes non-cash items like depreciation and amortization, while Net Income includes them. Depreciation and amortization are called non-cash items because they do not represent an actual outlay of cash, but an allocation of the cost of long-term asset. The actual cash outlay could be completely different depending on the terms of acquisition of asset (e.g. advance payments, or stages of payments).

Example

For example, a company reported a net income of $12.6 billion in 2023, with interest expenses of $1.2 billion, taxes of $3 billion, depreciation of $4 billion, and amortization of $500 million, the EBITDA would be:

EBITDA=12.6+1.2+3+4+0.5=21.3 billion dollars

Common Mistakes and Misconceptions About EBITDA and Net Income

1. EBITDA is Not Cash Flow

A common misconception is that EBITDA represents cash flow. However, it does not account for changes in working capital (accounts receivable, accounts payable and inventory) or capital expenditures (such as purchase of land, building etc).

2. Ignoring Interest and Taxes

Some analysts mistakenly use EBITDA as a proxy for profitability without considering the impact of interest and taxes. Note that although excluded from EBITDA calculation, interest and taxes still need to be paid by the company, and impact cash flow and ability to settle due liabilities of a company.

3. Depreciation and Amortization are Non-Cash, But Important

While EBITDA excludes these non-cash items, they are crucial for understanding long-term asset and investment impacts. This is because the company acquisition of long-term assets still requires cash outflow, and most organizations require a certain level of acquisition related outflow on a constant basis, ignoring which could result in incorrect assumptions related to the cash flow of a company, and hence its valuation.

4. EBITDA Overstates Profitability

Because it excludes significant costs, EBITDA can sometimes paint an overly optimistic picture of profitability. You may encounter companies with EBITDA margin of above 20%-30%, but net income % of below 5%, or even negative net income margin.

5. Different Uses, Different Interpretations

Using EBITDA in the wrong context, such as comparing companies with vastly different capital structures, or business landscapes can lead to misleading conclusions.

Some points to consider related to EBITDA

1. Adjusting EBITDA for Non-Recurring Items

To get a clearer picture, adjust EBITDA for non-recurring items like one-time gains or losses. This provides a more normalized view of operational performance.

2. Comparing Across Industries

Use industry-specific EBITDA multiples for more accurate comparisons. Different industries have varying capital and operational structures, impacting EBITDA differently.

3. Linking EBITDA to Operating Cash Flow

To approximate operating cash flow, add changes in working capital and capital expenditures to EBITDA. This provides a more comprehensive view of financial health and cash flow.

Interested in understanding EBITDA and performing income statement analysis with more details. Check out the advanced income statement (and EBITDA) analysis course: P&L and EBITDA analysis course. Specially, if you are involved with presenting income statement and financial results during management meeting, this course is essential to understand the drivers behind EBITDA performance and how to compare and present results vs budget and previous periods.

Excel Charts & Graphs for Advanced Financial analysis📈

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Download the practice file here:

shared-chart-and-graphs-for-financial-analysisDownload

Watch the full video here:

Excel charts and Graphs for financial analysis.

In this video, we’ll delve into advanced financial analysis, equipping you with the skills to uncover meaningful insights using powerful charts and graphs in Microsoft Excel.

Book One on One session: https://calendly.com/learnaf Income statement analysis

Course: https://ebitda.thinkific.com/pages/start

FP&A playlist: https://www.youtube.com/playlist?list=PLcRqJFBzcNZWuJmu96M_SFbUIHAJ2aLZu

A Comprehensive Guide to Analyzing an Income Statement

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1. Understanding the Income Statement:

The income statement, also known as the profit and loss (P&L) statement, serves as a snapshot of a company’s financial performance over a specific period (NOT a point in time). It is structured as follows:

  • Revenue: This is the starting point of the income statement and represents the total income generated from the company’s primary operations, such as sales of goods or services.
  • Expenses: Expenses are categorized into various line items, including cost of goods sold (COGS), operating expenses, interest expenses, and income taxes. These costs are deducted from revenue to calculate net income.
  • Net Income: Net income is the bottom line of the income statement, reflecting the company’s profit after all expenses have been accounted for.
Complete income statement and EBITDA analysis video course

2. Revenue Analysis:

a. Price Analysis:

Price analysis is a critical aspect of revenue analysis. It involves examining how changes in selling prices impact revenue. Consider the following points:

  • Pricing Strategies: Companies may adjust prices strategically to increase market share, maximize profit margins, or respond to competitive pressures.
  • Example: If a company increases the price of its flagship product by 10%, it may lead to a revenue boost if sales volume remains constant. However, if consumers perceive the price as too high, sales could decline.

b. Mix Analysis:

Mix analysis focuses on the composition of a company’s sales, emphasizing high-margin and low-margin products or services. Key points to consider include:

  • Product Mix Strategies: Companies often assess which products or services contribute most to their profits and may allocate resources accordingly.
  • Example: Shifting towards higher-margin products can boost gross profit even if overall revenue remains stable.

c. Volume Analysis:

Volume analysis assesses changes in sales quantities. It is essential for understanding how changes in sales volume affect revenue. Consider these factors:

  • Seasonality: Many businesses experience seasonal fluctuations in sales. Understanding these patterns is crucial for accurate revenue forecasting.
  • Example: A 15% increase in the number of units sold for a popular product can positively impact revenue, especially if this increase aligns with peak demand.

3. Expense Analysis:

a. Cost Analysis:

Cost analysis is pivotal in determining a company’s profitability. It involves a thorough examination of all expenses. Key points include:

  • Variable vs. Fixed Costs: Distinguishing between variable costs (expenses that fluctuate with production) and fixed costs (expenses that remain constant) is essential for cost control.
  • Example: A company can improve profitability by identifying and reducing variable costs that do not directly contribute to revenue generation.

b. Fixed Costs:

Fixed costs are those that do not vary with changes in production or sales levels. Analyzing fixed costs is crucial for:

  • Break-Even Analysis: Calculating the break-even point helps determine the minimum level of sales required to cover fixed costs.
  • Cost Reduction Strategies: Identifying opportunities to reduce fixed costs without compromising essential operations.
  • Example: Rent and salaries are typical fixed costs that need to be covered irrespective of sales volume.

4. Gross Profit and Gross Profit Margin:

a. Gross Profit:

Gross profit is a critical indicator of a company’s operational efficiency. Delve deeper by considering these factors:

  • COGS Analysis: Analyzing the components of COGS helps identify areas where cost efficiencies can be achieved.
  • Example: Streamlining the supply chain or negotiating better deals with suppliers can directly impact gross profit.

b. Gross Profit Margin:

Gross profit margin is a percentage that reflects a company’s profitability on each dollar of revenue. Dive deeper into this metric:

  • Benchmarking: Comparing gross profit margins with industry peers can reveal whether the company is performing above or below industry standards.
  • Example: A gross profit margin of 35% indicates that 35 cents are left as gross profit for every dollar in revenue.

5. EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization):

a. Analyzing EBITDA:

EBITDA is a powerful measure of operational performance. Dig deeper by considering:

  • Cash Flow Generation: High EBITDA suggests that the company is generating substantial cash flow from core operations.
  • Use in Valuation: EBITDA is often used in valuation models, such as the EBITDA multiple, to estimate a company’s worth.
  • Example: A company with an EBITDA of $10 million suggests that it generated $10 million in operating profit before accounting for other expenses.

6. Recommendations for Financial Analysts and Accountants:

a. Use Visual Aids:

  • Graphs and Charts: Consider using tools like bar charts, line graphs, and pie charts to illustrate trends and comparisons effectively.

b. Focus on Key Metrics:

  • Highlight KPIs: Emphasize key metrics like EBITDA margin, net profit margin, and return on assets (ROA) to provide a clear snapshot of financial health.

c. Provide Context:

  • Comparative Analysis: Contextualize your analysis by comparing the company’s performance against industry peers, historical data, or forecasts.

d. Highlight Trends and Insights:

  • Trend Identification: Identify recurring patterns, upward or downward trends, and their implications for future performance.

In conclusion, a thorough analysis of an income statement involves an in-depth examination of revenue and expense components, with a focus on key metrics like EBITDA and gross profit margin. By following these guidelines and considering real-world examples, financial analysts and accountants can gain a deeper understanding of a company’s financial health and present their findings effectively to management and leadership teams.

Note: If you are involved in analyzing and presenting income statement or EBITDA, we highly recommend you take our in depth income statement and EBITDA analysis course by clicking on https://ebitda.thinkific.com/courses/learn

Quick guide Automate your daily reporting using Excel Pivot Tables

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Learn how to completely automate (100%) your reports with Microsoft Excel Pivot Tables and some simple tweaks/tricks. If you prepare frequent reports, such as daily sales, or daily margin report, you do not have to create and update the reports every day at all. You do not even need advanced business intelligence tools. You can keep it simple, and nice and easy by automating you existing Pivot Table.

Download the file here:

data-for-pivot-tableDownload

Note: If you would like to learn in detail, how to calculate all income statement variances and the impact they have on sales, gross profit and ebitda, both in $ and %, and how to explain performance vs budget and prior periods, click here for a detailed video course (at a special price for readers of this post) showing exactly how this is done. You will also learn how to analyse and present the results of the variances to management and will be able to download solved variance calculation Excel files.

Would you like to work with me to get one on one training, or to solve your specific workplace challenges, book your 15 minute consultation here: https://calendly.com/learnaf

For fully automated reporting using a Pivot Table, you need a few things to be automated within the Pivot Table: 1) Pivot Table Data Range (to expand or shrink with changes in Source Data) 2) Calculations within the Pivot Table (such as calculation of Gross profit and profit Margin) 3) The Sorting Order for data in the Pivot Table 4) Pivot Table format to stay consistent with changes in source data 5) The Pivot Table should be able to Auto Refresh when new data is updated. This video covers all of these topics, while we work together with source data in the file provided.

Hope you find the information in the video helpful. If you like to watch more videos in accounting, financial analysis and controller ship, videos that help you directly in doing your job, subscribe to my channel. If you liked the video, I would love if you could LIKE it and leave a comment. If you have any questions or feedback, again leave a comment. Lets stay connected at #learnaccountingfinance.

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Calculating Prices in a Grocery Store: A Step-by-Step Guide

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Calculating prices in a grocery store can seem like a daunting task, but it’s actually quite simple once you understand the basic principles. In this blog post, we’ll walk you through the step-by-step process of how to calculate prices in a grocery store, so you can confidently set prices for your products and maximize your profit.

Note: If you would like to learn in detail, how to calculate all income statement variances and the impact they have on sales, gross profit and ebitda, both in $ and %, and how to explain performance vs budget and prior periods, click here for a detailed video course (at a special price for readers of this post) showing exactly how this is done. You will also learn how to analyse and present the results of the variances to management and will be able to download solved variance calculation Excel files.

Step 1: Determine your cost

The first step in calculating prices in a grocery store is to determine the cost of each product. This includes the cost of purchasing the product from a supplier, as well as any additional costs associated with storing, handling, and selling the product (such as packaging and labor).

To determine the cost of a product, you’ll need to consider the following factors:

  • Purchase price: This is the price you pay to purchase the product from a supplier.
  • Handling and storage costs: These are costs associated with handling and storing the product, such as the cost of packaging, labeling, and refrigeration.
  • Labor costs: These are costs associated with the labor required to handle, store, and sell the product, such as the wages of employees who stock shelves or check out customers.

Would you like to work with me to get one on one training, or to solve your specific workplace challenges, book your 15 minute consultation here: https://calendly.com/learnaf

Step 2: Determine your desired margin (or markup)

The next step in calculating prices in a grocery store is to determine your desired margin or markup, or the amount of profit you want to make on each product. The desired markup or margin will depend on a variety of factors, including your overall business goals, your competition, and market conditions.

You’ll need to consider the following factors:

  • Business goals: Consider your overall business goals and how much profit you want to make on each product.
  • Competition: Research the prices of similar products at other grocery stores in your area, and determine how much margin you need to remain competitive.
  • Market conditions: Consider factors such as the current state of the economy and the demand for the product when determining your desired margin.

Step 3: Calculate the selling price

Once you’ve determined your cost and desired profit, you need to calculate the selling price. This can be a little tricky as you need to make a distinction between markup and margin. They are both not the same. Markup is a percentage on the cost, while margin is a percentage on the selling price. For example, If your product costs $100, and the required markup is 25%, then the selling price will be calculated as:

Selling price = Cost + Markup = $100 + (25% x $100) = $125

However, if the required margin is 25%, then you need to apply the formula:

Selling price = Cost / (1 – Margin) = $100 / (1 – 25%) = $133.33.

Note that 25% markup is not the same as 25% margin. So, its important to understand what you are really looking for. If you would like to learn more about the difference between markup and margin, and how to convert one into the other, e.g. 10% margin = __% Margin? or 10% margin = __% markup, watch this video in which, I explain in detail the concepts and the calculations.

By using this formula, you can easily calculate the selling price of each product in your grocery store, ensuring that you’re making the desired profit while also remaining competitive with other stores in the area.

In conclusion, calculating prices in a grocery store is a simple process that requires you to consider the cost of each product, your desired margin, and market conditions. By following these steps, you can confidently set prices for your products and maximize your profit.

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Hope you find the information in the videos helpful. If you like to learn about accounting, financial analysis and controller ship, and learn from videos that help you directly in doing your job, subscribe to my channel. Lets stay connected at #learnaccountingfinance.

Free Accounting Crash Course

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Here is a list of videos that I recommend you watch in sequence to gain a quick basic understanding of Accounting. This should give you enough information to understand what is accounting? the accounting principles, rules of debit and credit and how to create financial statements such as 1) Income statement, 2) balance sheet, and 3) Cash flow statements.

Note: If you would like to learn in detail, how to calculate all income statement variances and the impact they have on sales, gross profit and ebitda, both in $ and %, and how to explain performance vs budget and prior periods, click here for a detailed video course (at a special price for readers of this post) showing exactly how this is done. You will also learn how to analyse and present the results of the variances to management and will be able to download solved variance calculation Excel files.

  1. What is Accounting … https://youtu.be/sLGq3z8_xZY
  2. What are assets …https://youtu.be/DCU3P_572_U
  3. Introduction to International Financial Reporting Standards … https://youtu.be/WbZVNS6AUJA
  4. Definition and Types of Assets … https://youtu.be/igrmTYeJXFM
  5. Asset types and what are current assets … https://youtu.be/60WJ4r_mOIg
  6. Non-current and Intangible Assets … https://youtu.be/d23bMnpx4do
  7. What are Liabilities … https://youtu.be/-NTfNhP0LHE
  8. Non-current liabilities explained … https://youtu.be/0vgjxmSfFPQ
  9. Income and Expenses explained … https://youtu.be/9n4veabgKTU
  10. What is Equity and the Balance sheet equation … https://youtu.be/b_f7JsSnLOw
  11. Accounting principles Part 1 … https://youtu.be/j-NL3K4e6iA
  12. Accounting principles Part 2 … https://youtu.be/te8Nz3K-gv8
  13. Accounting Entry practice – Part 1 (Applying the rules of debit and credit) … https://youtu.be/d9AL2PVM8gU
  14. Accounting Entry practice – Part 2 (Applying the rules of debit and credit) … https://youtu.be/BX-o6DHiVYg
  15. Flow of Journal Entries (Accounting Entries) … https://youtu.be/DTdAIRPeJHs
  16. How to create Balance Sheet from Trial Balance … https://youtu.be/IwTzIGE_jdI
  17. How to create Income Statement from Trial Balance … https://youtu.be/GBkYZJ5fvEM
  18. How to create Cash flow statement from Balance Sheet and Income Statement … https://youtu.be/aXN97_d_IEY

Sit back and enjoy the course! Let me know if you would like to know more, or something is not clear enough.

Would you like to work with me to get one on one training, or to solve your specific workplace challenges, book your 15 minute consultation here: https://calendly.com/learnaf

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Hope you find the information in the videos helpful. If you like to watch more videos in accounting, financial analysis and controller ship, videos that help you directly in doing your job, subscribe to my channel. If you liked the videos, I would love if you could LIKE themand leave a comment. If you have any questions or feedback, again leave a comment. Lets stay connected at #learnaccountingfinance.

Top 7 Essential skills every Financial professional Must Have!

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As a finance professional, it’s important to have a strong foundation of knowledge and skills to be able to succeed in your career. Here are the 7 most important skills that every finance professional should have, along with examples of how these skills can be applied in real life:

Note: If you would like to learn in detail, how to calculate all income statement variances and the impact they have on sales, gross profit and ebitda, both in $ and %, and how to explain performance vs budget and prior periods, click here for a detailed video course (at a special price for readers of this post) showing exactly how this is done. You will also learn how to analyse and present the results of the variances to management and will be able to download solved variance calculation Excel files.

Would you like to work with me to get one on one training, or to solve your specific workplace challenges, book your 15 minute consultation here: https://calendly.com/learnaf

  1. Financial analysis: The ability to analyze and interpret financial data is essential for finance professionals. This includes being able to understand and use financial statements, perform ratio analysis, and create financial projections. Financial analysis is an important tool for understanding a company’s financial performance and making informed decisions about its future. For example, a financial analyst might use financial statements to identify trends in a company’s revenue and expenses (what will the revenue and expenses look like a month, year, three years from now), and use this information to make recommendations for cost-cutting measures or to identify opportunities for growth.
  2. Communication: Finance professionals need to be able to effectively communicate financial information to both technical and non-technical audiences. Communication is important for any professional field, but is a core skill required for good financial analysts. This includes being able to explain complex financial concepts in a clear and concise manner and using various forms of communication, such as written reports, presentations, and graphs (One example of such graph is a waterfall chart). Strong communication skills are essential for finance professionals, as they often need to present financial information to stakeholders such as clients, investors, and management. For example, a financial advisor might use a presentation to explain the benefits of different investment options to a client, while a CFO might use a written report to update the board of directors on the company’s financial performance.
  3. Leadership: Finance professionals often work in leadership roles and need to be able to motivate and manage teams. This includes the ability to delegate tasks, provide constructive feedback, and resolve conflicts. Leadership skills are important for finance professionals as they may be responsible for leading teams of financial professionals and ensuring that projects are completed efficiently and effectively. For example, a finance manager might lead a team of financial analysts and be responsible for assigning tasks, setting goals, and providing guidance to team members.
  4. Problem-solving: Finance professionals need to be able to identify problems and find solutions. This includes being able to analyze data, develop and evaluate options, and make informed decisions. Problem-solving skills are essential for finance professionals, as they are often faced with complex financial challenges that require creative and analytical thinking. For example, a financial analyst might be faced with the challenge of finding ways to increase profitability for a company. To solve this problem, the analyst might analyze the company’s financial data, identify areas where costs can be reduced, and present recommendations to management.
  5. Attention to detail: Accuracy is crucial in finance, and finance professionals need to have a strong attention to detail in order to avoid errors and ensure that financial information is reliable. Attention to detail is important in finance, as even small mistakes can have significant consequences. For example, an accountant might need to review a large number of transactions to ensure that they are properly recorded and that the financial statements accurately reflect the company’s financial position.
  6. Time management: Finance professionals often have to juggle multiple tasks and deadlines, so the ability to manage time effectively is important. This includes being able to prioritize tasks and work efficiently. Time management skills are essential for finance professionals, as they may have to handle multiple projects and meet tight deadlines. For example, a financial planner might have to prepare financial plans for several clients at the same time, and need to be able to manage their time effectively to ensure that all clients receive the attention they need.
  7. Adaptability: The finance industry is constantly evolving, and finance professionals need to be able to adapt to new technologies and techniques. This includes being open to learning and continuously improving skills. Adaptability is important for finance professionals, as they need to be able to keep up with changes in the industry and adopt new tools and approaches as needed. For example, a financial analyst might need to learn new software to analyze financial data more efficiently, or a financial advisor might need to stay up-to-date on new investment products and strategies,

By developing these skills, finance professionals can position themselves for success in their careers. Whether you’re just starting out in finance or are an experienced professional, it’s always a good idea to work on improving and expanding your skillset. By continually learning and growing, finance professionals can stay ahead of the curve and succeed in an ever-changing industry.

If you would like to learn these skills, including help with Microsoft Excel, accounting and financial analysis, make sure you connect with us through one of the following channels.

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How to perform Vertical Analysis of Income Statement (Coca Cola vs Pepsi)

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Download the practice file by clicking on the link below if you would like to practice along with me.

Download Link:

https://learnaccountingfinance.com/wp-content/uploads/2021/03/vertical-income-statement-analysis-coca-cola-vs-pepsi-download-free.xlsx

Would you like to work with me to get one on one training, or to solve your specific workplace challenges, book your 15 minute consultation here: https://calendly.com/learnaf

Note: If you would like to learn in detail, how to calculate all income statement variances and the impact they have on sales, gross profit and ebitda, both in $ and %, and how to explain performance vs budget and prior periods, click here for a detailed video course (at a special price for readers of this post) showing exactly how this is done. You will also learn how to analyse and present the results of the variances to management and will be able to download solved variance calculation Excel files.

In this video, I explain vertical analysis of income statement (in Excel) by comparing the real income statements of Coca Cola and Pepsi.

What is vertical income statement analysis?

Vertical analysis is a top to bottom analysis of income statement where amounts for all line items in the income statement are converted to a percentage of a base amount (usually total revenue or Net Sales). This analysis is done to see the relative size of each type of income or expense with respect to the revenue (base).

When is Vertical Analysis used?

Vertical analysis of income statement can be used when trying to understand the size and significance of the components of income statement (hence reflected in percentage), and also to compare financial statements of difference companies either in the same or different industries, which may or may not be of similar size or revenue base. Converting amounts into percentage gives a particularly good idea for comparison, as you will see in the video above. Although Pepsi’s total revenue is more than double Coca Cola’s revenue, you can still compare the two income statements and analyze them to make informed decisions.

Vertical Analysis vs Horizontal Analysis

While vertical analysis looks at the components of income statements and their relative size, horizontal analysis looks at changes in the financial statements over a period of time. It is usually reflected in terms of year over year growth or decline.

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Course: If you would like to learn in detail, how to calculate sales variances and the impact they have on sales $, profit $ and profit margin %, and how to explain performance vs budget and prior periods, click on the link for a detailed video course (at a special price). You will also learn how to analyse and present the results of the variances to management and will be able to download solved variance calculation Excel templates. https://www.udemy.com/course/learn-financial-analysis-of-variances-in-profit-and-sales/?couponCode=YOUTUBE10

Hope you find the information in the video helpful. If you like to watch more videos in accounting, financial analysis and controller ship, videos that help you directly in doing your job, subscribe to my channel. If you liked the video, I would love if you could LIKE it and leave a comment. If you have any questions or feedback, again leave a comment. Lets stay connected at #learnaccountingfinance.

Sort Pivot Table Values largest to Smallest, by Names, Dates and More!

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Download Link

Download the practice file by clicking on the link below if you would like to practice along with me.

https://learnaccountingfinance.com/wp-content/uploads/2021/03/pivot-table-sorting-tutorial-data-shared.xlsx

Would you like to work with me to get one on one training, or to solve your specific workplace challenges, book your 15 minute consultation here: https://calendly.com/learnaf

Note: If you would like to learn in detail, how to calculate all income statement variances and the impact they have on sales, gross profit and ebitda, both in $ and %, and how to explain performance vs budget and prior periods, click here for a detailed video course (at a special price for readers of this post) showing exactly how this is done. You will also learn how to analyse and present the results of the variances to management and will be able to download solved variance calculation Excel files.

Learn how to sort pivot table data from largest to smallest values and vice versa for multiple columns including Customer names, months and Values. In this video, I will explain the basics and advanced uses of Sorting Pivot Table Data.

Sort Pivot Table values from Largest to Smallest:

We start with very simple sorting of Customer Names based on the largest value of Sales amount. Then we start adding other fields in the pivot table and see how it impacts the Sorting.

Sort Pivot Table Manually

E.g. we add the countries in the Pivot Table report, and manually change the order resulting in Manual Sorting of the Data.

Sort Pivot Tables by Subtotals and Grand totals

We can also sort Pivot Table based on subtotal values or Grand Total values. Just click on the Cell for the field you are looking to sort and then click the sort ascending or Descending button for this to work.

Checking Pivot Table Sort Settings

We can also check current Pivot Table Sort settings by right clicking on any field and Value and then clicking on Sort à More Sort Options. This shows exactly how the current sorting is setup in the Pivot Table.

Sort Pivot Table by Months and Dates

We also take a look at how we can sort dates or months in Pivot Tables. By default, if the dates or months are entered in correct format, the Pivot Table will sort them based on Oldest to Newest. However, we can change that setting and Sort based on values for each date as well as sort from Newest to Oldest date or month.

Issues with Sorting, Errors in Sorting data

Sometimes, you may not be able to sort values when there are no subtotals or Grand Totals to click and Sort on. In this case, you can still sort Pivot tables data even though you do not add the subtotals. You can do this by right clicking on the Field you want to sort by values, and then click on Sort, and then More Options. Then Choose Ascending or Descending Sort option. Finally, select the value field you want to sort based on, from the Drop down selection available.

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Hope you find the information in the video helpful. If you like to watch more videos in accounting, financial analysis and controller ship, videos that help you directly in doing your job, subscribe to my channel. If you liked the video, I would love if you could LIKE it and leave a comment. If you have any questions or feedback, again leave a comment. Lets stay connected at #learnaccountingfinance.