From the course: Data Analytics for Pricing Analysts in Excel (2018)

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Variance analysis walks and pricing

Variance analysis walks and pricing - Microsoft Excel Tutorial

From the course: Data Analytics for Pricing Analysts in Excel (2018)

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Variance analysis walks and pricing

- [Narrator] Now that we understand how to make forecasts and the roll that price play in our forecasts over time and their profitability, it's useful to go through and understand one of the most common tools in corporate finance, variance analysis. Variance analysis often relies on what we call walk charts or waterfall charts. If you work in a corporate FPNA position, you've probably seen these charts somewhere along the way. These types of charts are used to identify where a business is meeting its financial plan commitments and where it's falling behind. In fact, walk charts can be used for operating margin, for net income, for revenue, for a variety of different income statement variables that we care about, and they're a great tool for understanding whether our price increases or decreases have lead to overall better performance. There's three major types of variance analysis. The first and probably most common is forecast variance. This really looks at how a business is…

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