Join Rudolph Rosenberg for an in-depth discussion in this video Exceptional factors, part of Financial Analysis: Introduction to Business Performance Analysis.
…An important element to take into consideration when analyzing your…business is the presence of exceptional factors.…Let's define what that means.…When I say exceptional, it is a matter of time and magnitude.…It is an event that is impacting the company financially.…And it is both big and does not happen often.…For example, signing a large contract that will…generate significantly more revenue than your usual contract, and…that does not happen very often, would qualify as an exceptional contract.…
It has both the time factor, as it does not happen very often, and…is significantly bigger than your usual contract.…If it happens every day, it is not exceptional.…And if it's the same size as your other contracts, it's not exceptional either.…When it comes to business analysis,…my advice is to always exclude exceptional factors.…Of course, exceptional factors are part of business and…count towards your overall performance.…But when you analyze a company, exceptional factors can be misleading.…
Lets imagine for example,…
This course, the first in our Financial Analysis series, introduces you to key concepts of business performance analysis. Author Rudolph Rosenberg focuses on the analysis of the profit and loss (the P&L) statement and on the key dynamics you need to understand in order to interpret the performance of your business. Understanding this data will help you make informed decisions that benefit your company in the long run.
Get started now with this quick primer. When you're ready for the next steps, check out Financial Analysis: Analyzing the Top Line with Excel and Financial Analysis: Analyzing the Bottom Line with Excel.
- Identify the three elements of a profit and loss statement.
- Recall the importance of performing a combined analysis.
- Distinguish between a controllable and an uncontrollable factor.
- Define an exceptional factor.
- Explain the difference between a dashboard and an analysis.