Contact Us
×

Author: Imarticus Learning

Performance-driven Accounting

Posted on by Imarticus Learning

Performance-driven accounting is a management accounting approach that focuses on identifying and measuring key performance indicators (KPIs) critical to an organisation’s success. This approach involves analysing and interpreting financial and non-financial data to monitor and evaluate performance against established goals and benchmarks.

certified management accounting course

Performance-driven accounting can play a significant role in risk management by providing valuable insights into an organisation’s performance and identifying potential risks before they become significant issues.

If you want to learn about performance-driven accounting, this blog is for you. To become a Certified Management Accountant (CMA), enrol in the US CMA Course.

What is Performance-driven Accounting?

Performance-driven accounting is an accounting methodology that goes beyond traditional accounting methods that only focus on financial metrics, such as revenue, expenses, and profits.

Performance-driven accounting can provide valuable insights into an organisation’s performance and help ensure that financial reporting is accurate, relevant, and useful for decision-making.

How does Performance-driven Accounting function?

The following are the key steps in the process of performance-driven accounting:

Define performance metrics: The first step in performance-driven accounting is to identify and define the performance metrics that will be used to evaluate an organisation’s performance. These metrics can include both financial metrics (such as revenue, expenses, and profits) and non-financial metrics (such as customer satisfaction, employee engagement, and product quality).

Collect data: Once the performance metrics have been defined, the next step is to collect the data needed to evaluate an organisation’s performance. This may involve collecting financial data from accounting systems, as well as data from other sources such as customer surveys, employee engagement surveys, and product quality testing. Collecting data is an essential component in decision analysis.

Analyse performance: Once the data has been collected, the next step is to analyse the performance metrics to evaluate an organisation’s performance. This may involve comparing financial results to industry benchmarks, analysing trends over time, and identifying areas of strength and weakness.

Develop action plans: Based on the analysis of performance metrics, organisations can develop action plans to improve performance. These action plans may involve changes to operational processes, marketing strategies, product development, or other areas of the organisation.

Monitor progress: Finally, organisations must monitor their progress toward achieving their performance goals. This may involve ongoing data collection, periodic performance reviews, and adjustments to action plans based on changes in the business environment.

Communication and collaboration: Effective communication and collaboration are essential for performance-driven accounting. This involves sharing financial data with relevant stakeholders, such as management, investors, and employees, and working together to identify opportunities for improvement.

Embrace technology and automation: Performance-driven accounting can be made more efficient and effective by using technology and automation. Organisations should consider using accounting software, data analytics tools, and other technologies to streamline their accounting processes and improve data analysis.

Overall, performance-driven accounting provides organisations with a more comprehensive view of their performance, enabling them to make more informed decisions and take action to improve their operations and achieve their goals.

By leveraging performance-driven accounting for risk management, businesses can make better-informed decisions and reduce their exposure to financial risks. This can help improve overall performance and create long-term value for the business and its stakeholders.

Shortcomings of Performance-driven Accounting

While performance-driven accounting has many benefits, it also has some potential shortcomings. Here are some common shortcomings of performance-driven accounting:

Overemphasis on financial metrics: Performance-driven accounting can sometimes place too much emphasis on financial metrics, such as revenue growth, profit margins, and return on investment (ROI). This can lead to a narrow focus on short-term financial results at the expense of longer-term strategic objectives.

Incomplete data: Performance-driven accounting relies on accurate and reliable data, but sometimes organisations do not have complete data sets, which can lead to incomplete analysis and decision-making.

Inaccurate or misleading data: Inaccurate or misleading data can lead to incorrect decision analysis. This can happen if data is not collected correctly if there are errors in the accounting system, or if the wrong data is used.

Limited scope: Performance-driven accounting may not capture all relevant factors that impact an organisation’s performance, such as social and environmental factors, employee satisfaction, and customer loyalty.

Resistance to change: Organisations may resist implementing performance-driven accounting if it requires significant changes to existing accounting processes or if there is a lack of buy-in from stakeholders.

Ethical concerns: Performance-driven accounting can create ethical concerns, such as manipulating data or incentives to achieve desired results, which can compromise the integrity of financial reporting.

To address these shortcomings, it is essential to adopt a balanced approach to performance-driven accounting that takes into account both financial and non-financial factors and emphasises transparency and ethical conduct.

Future of Performance-driven Accounting

The future of performance-driven accounting is likely to be driven by technological advancements, increased use of data analytics, and the growing importance of sustainability and environmental, social, and governance (ESG) factors in decision-making.

Technological advancements, such as artificial intelligence (AI) and machine learning (ML), will enable organisations to collect and analyse data more efficiently and accurately. This will enable organisations to identify trends and insights that were previously difficult to detect, leading to more informed decision-making.

The use of data analytics will also play a crucial role in the future of performance-driven accounting. Organisations will increasingly rely on data to measure and evaluate their performance, identify areas for improvement, and make decisions about future investments.

The growing importance of sustainability and ESG factors will also shape the future of performance-driven accounting. As stakeholders place greater emphasis on these factors, organisations will need to incorporate them into their performance metrics and reporting.

Overall, the future of performance-driven accounting will be characterised by a greater focus on data-driven decision-making, the use of advanced technologies, and a more holistic approach to measuring and evaluating organisational performance that takes into account financial, non-financial, and ESG factors.

Conclusion

In conclusion, performance-driven accounting is a strategic approach to accounting that focuses on providing real-time financial information to drive decision-making and improve business performance. It differs from traditional accounting by placing a greater emphasis on forward-looking data, KPIs, data-driven decision-making, integration with other business functions, and value creation.

By adopting a performance-driven accounting approach, businesses can gain a competitive advantage by making more informed decisions and improving overall performance. By aligning financial performance with other business functions, businesses can optimise their resources and create long-term value for their stakeholders.

If you want to become a certified management accountant (CMA), Imarticus Learning’s US CMA Course is for you. Get a chance to master accounting and finance, and download the brochure for further details.

Visit Imarticus Learning to know more about the US CMA Course, and propel your career in this field.

Why Full Stack Developers Must Learn MongoDB

Posted on by Imarticus Learning

Full stack development refers to the complete programming of a website or application. A full stack developer creates both the client-side (front end) and server-side (back end) of software applications providing customers with a smooth and responsive user interface. 

Full stack developers are in high demand amongst businesses, organisations and all imaginable sectors, making it a lucrative career option. More than 20,000 full stack developer job vacancies are currently available in India. Amongst the many programming languages, a full stack developer must know MongoDB.

Read on to learn why a detailed knowledge of MongoDB is necessary for full stack developers.

MongoDB – An Overview

MongoDB is a NoSQL JavaScript-based document database designed to build versatile internet applications on the software’s user and server sides. MongoDB is integral to the most popular MERN and MEAN technology stacks, built on the model-view-controller (MVC) architectural pattern.   

Why is it necessary for full stack developers to learn MongoDB?

Full Stack Developer Course

MongoDB is a must-learn topic for prospective candidates wanting to be full stack developers. Listed below are a few reasons explaining why it is so necessary – 

Easy installation and open-source database 

MongoDB is an open-source product with an easy installation process. Setting up a MongoDB cluster can be easily achieved with the help of MongoDB Atlas. 

Wide support base

MongoDB stores and reproduces data in a document format, making it accessible in any language. It is compatible with data structures native to those languages.

Schema-free database 

MongoDB is a schema-free database. Any document type can be edited easily with MongoDB. A user can easily store different types of data together. MongoDB uses BSON data format, which is derived from JSON. 

Flexibility in design

MongoDB is an excellent choice for web designers. The designer is free to write new data at any point in time, keeping the system intact. No downtime is needed if a schema change is required for the site. 

Robust analytics

Indexing in MongoDB makes accessing documents easier. It performs complex data analytics with minimum coding. It is a gem in response to complex querying with the help of its Query API. 

Easier scale-out and distribution of data

With MongoDB, scaling is easy. This is to add more resources to your server and share the workload horizontally. These processes quicken the work processes and help big business houses run smoothly. 

Developer data platform on cloud base

Being a complete developer data platform, MongoDB has much more to offer to its users than just being a database. MongoDB Atlas is a cloud product of MongoDB, with several services under its hood.

MongoDB Charts provides us with an easy user interface with eye-catching visualisation tools. Performance Advisor suggests ways to optimise the database, while MongoDB Query API runs a text-based search engine.

Professional support

An aspiring full stack developer can always rely on the MongoDB helpline or support system. MongoDB has a huge chunk of documentation or ready-made tutorials available as open-source materials. MongoDB University is a library of contact and easy-to-understand courses. MongoDB offers paid tutorials as well. 

Better performance compared to traditional RDBMSs

Traditional RDBMSs (relational data base management systems) use joint operations. Whereas, MongoDB uses a document model, where queries may be solved much faster pulling back necessary information to the database on a single call. It has an unmatched performance through its insertMany and updateMany functions. Indexing makes access to documents much easier and faster. 

Other skill sets required for being a full stack developer

Besides front- and back-end development, a full stack developer must have a knowledge of development languages, servers, basic design capabilities, and algorithms and data structures. 

It is desirable for a full stack developer to transform into a DevOps developer so that a complete knowledge of development and operation is acquired. Software developers or interns often need to use a common internet hosting server, where they may see and edit each other’s projects. This service is provided by GitHub, which they should master.     

Conclusion

MongoDB has a wide application base. E-commerce product catalogues, blogs, mobiles and social networking sites extensively use MongoDB. In full-stack development, it is primarily useful for its extensive storage capacity and seamless access to data. Other reasons which make it an ultimate choice for a full stack developer are its speed and performance, query response and excellent helpline. If full stack development is your calling, then a full stack development course is the right choice for you.

The Full Stack Developer Pro Course at Imarticus can boost your career towards a bright future. The course is of 6 months and offers placement support. 

The advantages of pursuing a capital market certification course from IIM Calcutta

Posted on by Imarticus Learning

Are you interested in a career in finance? Have you considered pursuing a stock market certification course? In today’s fast-paced and competitive world, having a solid understanding of capital markets and financial products is essential to succeed in the finance industry. A capital market certification course equips you with the necessary knowledge to make informed investment decisions, analyze financial data, and assess risk.

Whether you are a recent college graduate or a working professional looking to upskill, a capital market certification in India can provide various benefits. Not only will you gain a comprehensive understanding of capital markets, but you will also increase your job opportunities, earn higher salaries, and have better career growth prospects.

So why wait? Invest in your future by pursuing a capital market certification today.

Overview of Capital Market Certification Courses

Capital markets are an essential part of the financial system and play a significant role in economic growth. A capital market certification equips you with the knowledge and skills required to succeed in this field.

  • These courses cover topics such as securities analysis, investment management, financial modeling, and risk management.
  • Courses are offered in different formats, such as online, part-time, and full-time programs.
  • According to the Bureau of Labor Statistics, the demand for financial analysts is expected to grow by 9% (faster than average) from 2021 to 2031.

Benefits of enrolling in a capital market certification course

Now if you are thinking, What are the benefits of capital market courses online? Let’s take a Closer look:

  • Increased job opportunities and career growth – A certification from a recognized institution can open doors to new job opportunities and help you advance in your career.
  • Comprehensive knowledge and understanding of capital markets and financial products – A capital market certification course gives you an in-depth understanding of financial products and their functioning in the market.
  • Better investment decision-making abilities – You’ll learn to analyze securities and make sound investment decisions based on financial market trends and risk management strategies.
  • Higher earning potential and financial growth – With a certification, you’ll have better prospects for higher-paying jobs and opportunities for financial growth.

By pursuing a capital market certification course, learners can also gain a competitive edge in the job market and establish themselves as qualified and skilled professionals.

IIM Calcutta & its Capital Market Certification Course

IIM Calcutta, established in 1961, is one of the top management institutes in India. It is renowned for its exceptional faculty, world-class infrastructure, and academic excellence. The institute offers a wide range of programs, including the Capital Market Certification Course.

The Capital Market Certification from IIM Calcutta is a complete program that covers all aspects of capital markets and financial products. It is specifically designed to equip students with the necessary skills to excel in the finance industry.

Why Capital Market Certification from IIM Calcutta?

If you want to boost your career in finance, consider pursuing a capital market certification course from IIM Calcutta. This institute has a stellar reputation worldwide, and having their certification on your resume can increase your credibility and employability.

But it’s not just about the name – the course itself is top-notch. With a curriculum covering everything from equity to risk management, you’ll understand capital markets and financial products comprehensively. And the emphasis on practical experience means you’ll be well-prepared for real-world scenarios thanks to live projects, internships, and industry collaborations.

Plus, by studying at IIM Calcutta, you’ll have access to a broad network of alumni and industry experts. This can be invaluable for finding career opportunities, getting mentorship, and gaining insider knowledge of the finance industry.

Pursuing a capital market certification from IIM Calcutta is a smart decision for anyone looking to advance their finance career. It can give you the tools, knowledge, and connections you need to succeed.

Summing Up

Are you looking for ways to stand out in the finance industry? As the demand for financial analysts grows, you must equip yourself with the skills and knowledge necessary to succeed. And what better means to do that than by pursuing the best capital market certification course available?

Fortunately, Imarticus Learning and IIM Calcutta have joined forces to offer a comprehensive training program with hands-on experience and access to a vast network of alumni and industry experts. By enrolling in this financial market certification course, you’ll gain a competitive edge that can help you secure your dream job and accelerate your career growth.

The benefits of this certification course speak for themselves. Not only will you learn from the best in the industry, but you’ll also have the opportunity to apply your newfound knowledge in real-world scenarios. Plus, with a certification from a renowned institution like IIM Calcutta, you’ll have the validation and recognition you need to stand out.

So why wait? Take the initial step towards future-proofing your career, and sign up for this game-changing certification course today!

Demand Forecast and Planning

Posted on by Imarticus Learning

Demand forecasting and planning refer to estimating future demand for a certain product or service and developing a strategy to meet that demand. This requires studying previous sales numbers, market patterns, and other variables to forecast future demand accurately. 

The fundamental goal of demand forecasting and planning is to guarantee that the right items are available in the right quantities and at the right time to fulfil the demands of consumers. Demand planning is a step in the sales and operations planning (S&OP) process that uses statistical sales forecasts and the experience of other areas to estimate future demand.

Demand forecasting and planning have become essential elements of supply chain management in today’s fast-paced corporate atmosphere. Planning and forecasting demand with accuracy may assist organisations in maximising inventory levels, cutting expenses, and enhancing customer happiness. 

How to Do Demand Forecasting and Planning?

Demand forecasting and planning can be a complex process, but it can be simplified by following these steps:

Collect Data: The initial stage in demand forecasting and planning is gathering data on previous sales, market trends, and other pertinent elements that might influence demand.

Analyse Data: After gathering the data, the subsequent step is to analyse it to uncover patterns and trends. This study can assist you in identifying demand-influencing elements like seasonality, promotions, and economic situations.

Develop a Forecast: Based on the data analysis, you can anticipate future demand. This projection should be as precise as feasible, considering factors that influence the market.

Plan Inventory: After creating a prediction, the following step is to plan inventory levels to satisfy that demand. This process includes choosing how much inventory to purchase, when to order it, and how to maintain inventory levels to minimise stockouts and overstocking.

Types of Demand Forecasting Techniques

There are several types of demand forecasting techniques:

  • Survey methods, which involve collecting data through customer surveys
  • Statistical methods, which use historical data to identify trends and patterns
  • Trend projection, which consists in extrapolating past trends into the future
  • Market research, which uses customer data to identify demand patterns
  • Sales force composite, which involves aggregating sales forecasts from individual salespeople
  • Delphi method, which consists in collecting and aggregating expert opinions

Each technique has strengths and weaknesses, and the appropriate strategy will depend on the specific forecasting problem.

Factors Affecting Demand Forecasting

Here are some of the most important factors that influence demand forecasting:

Type of goods: The type of goods being sold can have a significant impact on demand forecasting. It can be goods that are already established in the market, or it can be new goods that are yet to be introduced.

Economic conditions: Economic conditions such as GDP, unemployment rate, inflation rate, and consumer confidence are key factors that affect the level of demand for products or services.

Product cost: The price of goods is also a factor affecting forecasting. Even a subtle change in pricing can have a significant impact on demand forecasting.

Competition: The number of competitive products also influences product demand. Additionally, new products can also shift the market dynamics. Demand forecasting becomes challenging and complex in this situation.

Other factors affecting demand forecasting include market fluctuations, cyclical economic trends, and seasonal highs and lows in demand.

Best Practices in Demand Forecasting and Planning

To ensure that your demand forecasting and planning process is effective, here are some best practices to follow:

Use Multiple Data Sources: To develop an accurate forecast, it is essential to use multiple data sources, including historical sales data, market trends, and customer feedback.

Collaborate with Stakeholders: Demand forecasting and planning should be a collaborative process that involves stakeholders from across the organisation, including sales, marketing, and operations.

Use Technology: There are many tools available that can help simplify the demand forecasting and planning process, such as demand planning software and inventory management systems.

Monitor Performance: Once you have implemented your demand forecasting and planning process, it is essential to monitor performance regularly to identify areas for improvement and make adjustments as needed.

Benefits of Effective Demand Forecasting and Planning

Demand forecasting and planning provide several benefits to businesses. These are:

  • Optimising inventory by predicting future sales, which allows demand managers to make informed business decisions about inventory planning, warehousing needs, running flash sales, and meeting customer expectations.
  • Reducing risks and making profitable financial decisions that increase profit margins and opportunities for expansion while also making the allocation of resources, inventory accounting, staffing, cash flow, and overall spending more efficient.
  • Providing valuable information regarding prospects in current and other markets, allowing managers to make informed pricing, business growth plans, and market potential decisions.
  • Maximising revenue and reducing costs by helping businesses strike the right balance between sufficient inventory levels and customer demand.
  • Creating accurate budgeting by estimating demand, including sales timing, allows firms to be more precise.
  • Reserving cash or negotiating bridge loans or credit terms in advance by forecasting demand, which helps businesses avoid an inability to supply customers.
  • Helping businesses better plan production, financing, labour, and marketing by determining the timing of sales. 

Future Outlook on Demand Forecasting

Accurate demand forecasting is critical for organisations to satisfy consumer demand, optimise inventory levels, and maximise profitability. There are several approaches and tools available for demand forecasting, including statistical models, machine learning algorithms, and market research. While predicting overall market demand might be tough, it can give useful insights into future market circumstances and help organisations make better strategic decisions.

supply chain management courses

IIT supply chain management course on demand forecasting and planning covers the components like, including averages, linear trend, seasonality, and cyclical, irregular, and random factors. Getting certified in such a course will help one build a career in supply chain management.

Conclusion

Imarticus Learning offers a Professional Certification in Supply Chain Management and Analytics in collaboration with the Department of Management Studies (DoMS) and the E-learning Centre at IIT Roorkee. The programme is designed to provide candidates with cutting-edge experience to enter the operations and supply-chain industry. 

Supply chain performance, drivers, metrics, demand forecasting, inventory management, logistics, and supply chain analytics are all covered in the curriculum. Supply chain analytics allows managers to make data-driven choices at the strategic, operational, and tactical levels.

The certified IIT supply chain management course prepares candidates for high-demand job roles such as demand planner, data scientist, and supply sales and operations planning. The programme delivers live online training sessions and discussions with some of the best faculties in India and leaders from the industry. 

What do you mean by financial valuation? Explain its various types

Posted on by Imarticus Learning

Understanding an asset’s or investment’s value is vital in business since money drives everything. Calculating the economic worth of a firm, investment, or asset is known as financial valuation. 

By 2030, GDP growth in economies that use data sharing for finance may range from 1 to 5 percent, with advantages for consumers and financial institutions.

It is an important facet of financial analysis that aids in the decision-making process for people and businesses regarding investments, mergers and acquisitions, and other financial transactions. 

Capital Market Training Courses

Various financial valuation methodologies may be used, depending on the scenario. Business valuation is not a one-size-fits-all approach. This blog post will cover what is financial modeling and valuation and examine the many financial valuation models employed by financial analysts and investors.

What is the importance of financial valuation in finance and investment?

Financial valuation is the process of calculating the value of a business, and it’s used to determine the value of a business enterprise.

You should incorporate financial modeling into your business intelligence and analytics strategy. With software like Excel, businesses may develop dynamic models that users can relate to crucial financial records like income statements, balance sheets, complicated debt obligations, and more. 

Financial modeling often inputs data from a company’s operational and financial history. The financial models offer information and statistics for planning the future, estimating revenue, and projecting expenses.

Some other uses are:

  • Reduce or eliminate a business unit
  • Budget
  • Estimate your capital expenditure requirements and distribute cash accordingly.
  • Be ready for business dealings (e.g., merger, stock buyback, corporate purchases)

Different Types of financial valuation Models

  • Three-Statement Model

A three-statement model is a financial model used in finance and investment. It is a three-statement model that measures the value of a company.

The three statements are:

  • Income Statement: It shows a company’s profitability at various levels, with net income as the last line item at the bottom.
  • Cash Flow Statement (CFS) – The CFS accounts for investing and financing operations before adjusting a company’s net income for non-cash expenses and changes in net working capital (NWC).
  • Balance sheet: It shows the carrying worth of a company’s resources (or assets) and the source of the money used to pay for the assets’ acquisition and upkeep (i.e., sources).

  • Comparable Company Analysis: Trading Comps

Trading comps are used to value a company. They’re also used to determine a company’s worth and compare it with other companies to determine if the stock is undervalued or overvalued. 

For trading comps to be accurate, they must be based on similar businesses that are already publicly traded. If you have access to another company’s financial statements, then you can use them as comparable data points while creating your model of their business performance.

  • Discounted Cash Flow Model

The DCF analysis is a discounted cash flow model. It calculates a company’s intrinsic value by discounting future cash flows into a single number and then comparing that number with the current stock price.

By discounting anticipated free cash flows to the present, the discounted cash flow (DCF) model considers the time value of money. Leveraged or unlevered free cash flows are also possible.

  • Budget Model

The budget model is a simple way to calculate the value of a company. It calculates its cash flow, which represents how much money it makes each year and how much it spends on items such as wages, rent, and interest payments.

Thus the private equity firm must make sure the following are true:

  • Monthly Free Cash Flows (FCFs)
  • Sufficient debt capacity 
  • Liquid assets that may be sold for cash
  • Very Little to No Cyclicity

  • Accretion/Dilution Analysis: M&A Merger Model

The M&A Merger Model is used to evaluate the value of a target company. It helps determine whether an acquisition will be accretive or dilutive to your company’s balance sheet and what kind of premium you should pay to complete the deal.

The various varieties of financial models, outside of the 3-statement and DCF models, tend to become increasingly complex due to the growing number of moving parts. 

Although the fundamentals of M&A modeling are quite straightforward, the following modifications might make the process more difficult:

  • Advanced price allocation for purchases (PPA)
  • Deferred Taxes (DTLs, DTAs)
  • Asset sales versus stock sales
  • Resources for M&A Finance (i.e., Debt Financing)
  • Calendarization and stub year modification

The Final Words

Financial valuation is a key component of the financial industry that aids people and businesses in making judgments about their investments and assets. Investors and financial analysts who wish to precisely calculate an asset’s or investment’s economic worth must understand numerous investment valuation techniques. 

The innovative Financial Services & Capital Markets Management Program from Imarticus Learning and IIM Lucknow will help you realize your potential for success in the financial services and capital markets sector. This innovative curriculum provides a thorough education covering every market facet, giving you the information and abilities required to succeed in this cutthroat sector.

What is the meaning of financial statement analysis and explain its methods?

Posted on by Imarticus Learning

Financial statement analysis examines a company’s financial statements to understand its performance. Understanding a company’s financial health requires using a technique like financial statement analysis. In essence, it is examining the financial documents of a firm and determining what they reveal about its operations and prospects for the future. 

This is looking at the figures and connections between earnings, assets, and liabilities to understand how the business is doing and how well it could do in the future. We can decide whether or not to invest in a firm more effectively by conducting this examination.

These records can help evaluate the company’s past, present, and future performance. Understanding financial statement analysis can help you assess a company’s financial health and make informed investment decisions. Keep reading to know more! 

What is financial statement analysis?

The financial report analysis reviews and interprets a company’s financial statements to gain insights.

This analysis uses three critical financial statements: 

  • Income statements: Gross profit margin, operating profit margin, net profit margin, tax ratio effectiveness, and interest coverage 
  • Balance sheets: Receivables turnover, quick ratio, debt to assets, days to sales, and debt to equity
  • Cash flow statements: This is the amount of money available and profits before taxes, interest, depreciation, and amortization (EBITDA). These figures might be shown on a per-share basis.

What are the objectives of financial statement analysis?

It helps investors and creditors evaluate a company’s financial health and make informed investment or lending decisions. 

Financial analyst

Financial statement analysis helps company management to identify areas of strength and weakness within their operations. 

Financial statement analysis is essential for regulatory authorities and tax agencies to ensure compliance with laws and regulations.

A financial statement evaluation provides information about a company’s economic performance. This information can help people make better decisions about lending money to the company. It helps identify the risks and opportunities associated with working with the company.

Benefits of financial statement analysis

  • Financial statement analysis is essential for investors, creditors, and management to understand a company’s financial health. 
  • It has many benefits and can help these stakeholders make informed decisions.
  • Corporate financial analysis lets stakeholders gain insight into a company’s financial performance. 
  • Assessment of accounting statements can be helpful for people interested in a company’s performance. 
  • It can help them spot patterns, unusual things, and places where they should pay attention. 
  • For instance, if a company’s profits keep decreasing, it could mean that its expenses are increasing or its prices are being pressured.

How to analyze financial statements effectively?

To understand a company’s financial situation, you should get its financial statements. But before you start analyzing them, it’s essential to check that the reports are accurate and have all the necessary information.

After verifying the statements, you can start calculating ratios and metrics to evaluate the company’s financial performance. These ratios can help you understand how well the company makes profits, manages its resources, and meets its financial responsibilities.

What are the different methods of financial statement analysis? 

Financial statement analysis helps assess a company’s financial health and performance by looking at its financial statements. There are various methods to determine the performance and efficiency of a company.

  • Ratio Analysis: Ratio analysis in finance is a way to evaluate a company’s financial health. These ratios can include profitability, liquidity, and solvency ratios.
  • Common-Size Analysis: Common-size analysis involves converting financial statements into a standardized format. Therefore, it allows for easy comparison between companies over time. Each line item is a percentage of a common base, such as total assets or revenue.
  • Vertical Analysis: Vertical analysis analyses a company’s financial statements by looking at the percentage of each line item at a specific point, such as revenue or total assets.
  • Horizontal Analysis: Horizontal analysis involves comparing financial statements from different periods to identify trends and changes in a company’s economic performance.
  • DuPont Analysis: DuPont analysis breaks down a company’s return on equity (ROE) into three components. It includes net profit margin, asset turnover, and financial leverage.
  • Cash Flow Analysis: It involves analyzing a company’s cash flows to evaluate its ability to generate cash and meet its obligations.

Conclusion: 

Examination of Financial documents helps to evaluate a company’s financial health. Therefore it is crucial for making smart investments and business decisions. Different ways to study financial statements show a unique company performance perspective. To fully understand a company’s finances, combining these methods is essential.

Imarticus Learning provides the best financial analysis courses.  In partnership with KPMG in India, the Financial Analysis Prodegree was created. This 120-hour program develops competence across various fundamental financial activities. This course also gives participants the professional knowledge they need to change or restart their careers.

Cryptographic Technologies in Blockchains: Data Consistency, Transparency and Privacy

Posted on by Imarticus Learning

With the potential to incorporate distributed data storage, peer-to-peer communication, digital encryption technology, consensus processes, and other computer technologies, blockchain has become very popular. 

A cloud computing service might include blockchain technology and blockchain networks. 

Fintech course

Better security of information, simple traceability, increased system interoperability, decentralisation, quicker system discovery, and many other benefits are made possible by using blockchain in cloud computing.

For blockchain to gain popularity, the assurance of user identity and transaction data security is very important. In this article, we will talk in detail about the role of cryptography in blockchain technology. 

Importance of Security in Blockchain

Blockchain will need to store and manage a lot of data because it is intended to be a decentralised distributed database. 

Data privacy and security are becoming more commonplace as data theft rises and the general population realises how sensitive large organisations may misuse data.

Blockchain ensures reliable, trustworthy, and secure data storage in digital databases that are not under any authority’s control. 

These databases also provide the option for trackability, and this openness enables anyone to verify the blockchain’s immutability. Cryptography, which protects user transaction information and privacy, provides this security.

What is Cryptography in Blockchain?

Security of data using cryptography prevents unauthorised access. Cryptography is used in blockchain for safeguarding transactions taking place between two nodes in a blockchain network. 

In any P2P network, the messages are protected using cryptography, and a blockchain’s link blocks and block information are secured with hashing. 

Cryptography’s main goals are securing transactions and participants while protecting against double-spending. 

It aids in protecting various blockchain network transactions. It makes sure that only those people may acquire, read, and handle the transaction intended for them. 

Types of Cryptography

The different types of cryptography are as follows:

Symmetric Cryptography: 

This cryptography employs an encrypted code, key, or cypher to convert inputted information into a cypher. 

The sender and receiver use the same key for encryption and decryption, making it the first instance of cryptography. This method is well renowned for being simple to use and having a fast data processing speed. 

The other sort of cryptography enters the picture, as will be further discussed, to guarantee the integrity of the keys used for encryption. 

Function:

  • Another name for it is secret-key cryptography.
  • The secret can be kept by both parties using the same key.
  • It is right for encryption in bulk.
  • It transfers data faster and with less computing power.

Asymmetric Cryptography: 

As the name signifies, asymmetric cryptography encrypts and decrypts the information using separate keys between the sender and recipient. With this method, the information is transmitted using two keys—the public and private keys. 

The communication is encrypted and decrypted while being sent using the public key and is unlocked using the private key. 

Anyone online can decrypt it via their public key, even when someone adds a set of digital signatures that use private keys.  

Function:

  • It is known as public key cryptography.
  • It is frequently employed for secret key sharing in symmetric cryptography.
  • It takes a while to process something.
  • In determining the reliability of the web server, it is crucial.

Hashing Cryptographically: 

The third kind of cryptography is “Hashing,” which involves employing cryptographic methods to transform any plain text collection into a cryptographic hash (a distinctive data string). 

In contrast to the previous two cryptography techniques, putting data through cryptographic hashing makes it impossible to reverse it. 

A substantial quantity of data can be reduced using the hashing method to compress the data into a short text string.  

A cryptographic hash’s characteristics are:

  • The hash function stays constant for each message.
  • The hash value will significantly alter with a slight modification in the contents.
  • The output hash algorithm cannot predict the input value.
  • They rely largely on bitwise operations, making them quick and effective.

Role of Cryptography in Blockchain 

The fundamentals of cryptography were used to develop blockchain technology. The benefits of cryptography in the following ways:

Security

Cryptography is necessary for the security of the blockchain ledger. The primary objectives of cryptography are to safeguard transactional data, user privacy, and data consistency. 

Every transaction is kept a record of using encrypted data on the blockchain. Users can buy and sell bitcoins and secure access to their data using their public and private keys.

Blockchains maintain the root hashes which securely encrypt each transaction using cryptographic hashing. If someone tries to modify any kind of data in the blockchain, a completely different hash will be produced at the root hash. 

Other users are able to find out whether the data has been hacked by checking the root hash to the one on their machine.

Scalability

With cryptographic hashing, infinite transactions could be safely stored in the network. As a result of integrating multiple transactions into one hash, blockchains can continue to grow at scale.

Reliability

Cryptographic hashing is irreversible, therefore transactions cannot be reverted. Since they are protected from any hostile behavior, all users may rely on the veracity of the digital ledger.

Encryption 

Asymmetric encryption is used in cryptography to safeguard data and communications against unauthorised disclosure and access on their network.

Immutability 

This characteristic of cryptography makes it crucial for blockchain. It enables blocks to be securely linked by other blocks and ensures the data’s reliability. 

It also ensures that no attacker can create a valid signature for hypothetical queries using the signatures of previous queries.

Non-repudiation

The non-repudiation work offered by the digital signature protects against any denial of a communication sent by the sender. 

This benefit is related to collision resistance, or the ability to easily distinguish one message from another since each input value has its hash function, preventing clashes between delivered messages.

Conclusion 

Thanks to cryptography, we can safely send Bitcoin, encrypt data, and preserve a record of previous transactions. 

Without a centralised authority, it ensures that blocks will keep getting added to the chain indefinitely and allows us to exchange cryptocurrencies safely.

Blockchains can store a huge number of transactions while using cryptographic hashing to protect those transactions from hackers. Online transactions are scaled, validated, and made secure.

If you want to build a career in fintech, check out Imarticus Learning’s Professional Certificate in Fintech. This fintech certification course has been designed to provide an in-depth understanding of different concepts of fintech. 

Imarticu’s fintech certification course will help you get a headstart in your fintech career. 

Visit Imarticus Learning to know more. 

What is Incident Handling in Cybersecurity?

Posted on by Imarticus Learning

Cybersecurity threats are a major challenge for organisations. The present-day technology that organisations are using has increased convenience, but they have also given vent to a number of risks such as cyber-attacks. Therefore, organisations have to be prepared in a way that they can respond to attacks, even the ones that might not have taken place before.

cybersecurity courses

Incident handling is a cybersecurity technique through which organisations can develop a robust strategy to ensure cybersecurity. It refers to the process of detecting a threat, responding to it, and finally recovering from it. Incident handling helps to mitigate the damage that is caused by any cyber threat and helps to restore the system to the state it was in prior to the accident. 

This article deals with the different aspects related to incident handling. Read on to find out.

Situations Where Incident Handling Can Help 

Incident handling does not lead to a permanent solution, but it definitely helps to quick-fix a problem and make sure that the work is not hindered. Incident handling helps to detect an incident, respond to it, and nip the problem in the bud. 

Some of the situations where incident handling can help are:

  • WiFi connectivity issues
  • Malware bug or virus
  • Navigation errors or website lags
  • Email malfunctions
  • Security breaches

However, the purpose of incident handling is not only to eradicate a certain problematic incident but also to derive learning from it. Incident handling takes place in a number of steps, which are discussed in the next part of the article. 

Steps Involved in Incident Handling

Some incidents may be critical to deal with. For instance, attackers may perform operations like advanced persistent threats to steal data from a source. These threats are not easy to eradicate and may also remain undetected for a long time. 

Dealing with such incidents may be difficult. Cybersecurity analysts and incident handlers have to detect all the tools and malware the attackers have installed. They also have to look if the attacker has created any new user accounts in the Active Directory and track the data that has been exfiltrated. 

To perform incident handling in the best way, incident handlers have to follow a number of steps, which are mentioned below. 

Preparation

This is the first step of the process, which does not require the occurrence of any prior incident. It is important to invest considerable time in the preparation phase so that companies remain prepared for any kind of unprecedented situation. The complexity of the preparatory process depends on the company’s size and infrastructure. 

This process includes defining the rules and regulations and policies that will guide the security process of an organisation and safeguard it against cybersecurity threats. During this phase, organisations plan how to respond to incidents that might target the organisation. 

During the preparation phase, organisations also develop a plan for communication, that determines who to reach and how to reach them during the incidents. This holds true for professionals both within and outside the organisation. There are mock sessions and simulated incidents through which the members can remain prepared on how to react to the incidents. 

Identification

In the identification phase, the incident that has been discovered is reported. This phase includes checking the actuality of the incident and making sure that it is not a false detection. The scope of the incident is then defined. Cybersecurity analysts and incident handlers then start investigating the incident. 

For the detection of the incidents, they correlate and try to analyse the data from endpoints. The case is then documented for further perusal. 

Containment

This phase of incident handling helps to curb any further damage. In this phase, the incident handler has to first prevent any further communication between the attacker and the compromised network. To ensure this, the network segments or the affected devices need to be isolated.

Next, backups need to be created. Analysts and incident handlers also need to preserve evidence so that the incident can be investigated further. Once all of this is done, the next step is to fix the affected devices and systems so that they can continue their normal functioning. For this, the vulnerabilities have to be patched and any fraudulent access has to be eliminated.

Eradication 

Once the incident has been tracked to the root, it is time to eradicate it. Although changing the passwords, deleting the discovered malware, and applying security fixes may seem like a convenient way to get away with the incident, all of this still leaves a chance for the attacker to come back. 

Therefore, the best possible way to resolve this is by fully reinstalling the affected systems.

Once all of this has been done, it is time to get the system back to work again. Prior to the recovery, make sure that the system has been hardened and patched wherever required. Sometimes, the recovery process may require a complete reinstallation of the Active Directory, and also a change in the passwords of all the employees. This will prevent the occurrence of the same incident. 

After everything has been restored to normal, the teams and the professionals involved in the process should meet and discuss the incident and derive the learnings. Such incidents prepare organisations for the worst.

Conclusion 

Hope this gives you a clear idea about incident handling. To learn more about cybersecurity, incident handling, and other related topics, you can pursue an online course in cybersecurity from Imarticus Learning. 

The course curriculum has been designed by industry experts and will prepare you for the roles of cybersecurity analyst, Incident Handler, Penetration Tester, and many more. Once you invest dedicated six months in this course, it is sure to open up new opportunities. 

The course does not only teach the learners the subject, but also ensures their holistic development through mock interviews, resume-building sessions, and personality development classes. The placement assurance is the cherry on top!

Therefore, enrol now to give your career a boost.

What are Artificial Neural Networks?

Posted on by Imarticus Learning

This is the age of supercomputers, Artificial Intelligence (AI), Machine Learning (ML) and Deep Learning where computing power has gone much beyond our imagination. With such scientific and technological advancements, it has become possible to process huge volumes of data within a fraction of a second for getting valuable insights. 

become a Data Analyst

A common term, which is extensively used when we talk about AI or ML is Artificial Neural Network (ANN). Artificial Neural Network is a model which imitates the way in which various nerve cells function in the human brain. There are many aspects and interesting layers in this network. Read on to learn more about Artificial Neural Networks, how they work, their advantages and other related things. 

What Are Artificial Neural Networks?

Artificial Neural Networks refer to a subfield of Artificial Intelligence, modelled after the human brain. These are algorithms which are based on brain functions for forecasting issues and modelling complicated patterns. The Deep Learning method emanates from the concept of biological neural networks. 

The main aim of developing Artificial Neural Networks was attempting to replicate the functioning of the human brain. If you study closely, you will find that the functioning of ANN is similar to that of biological neural networks. ANN algorithms work on structured and numeric data. 

The learning algorithms that ANNs use can make adjustments independently. Precisely, they can learn as they receive any kind of new input. This is the reason they are highly effective for non-linear statistical data modelling. 

The Architecture of Artificial Neural Networks

To understand Artificial Neural Networks, you must have knowledge about the architecture of ANNs.

Layers in the Artificial Neural Network

There are three or more layers in an Artificial Neural Network, which are interconnected to one another, namely the input layer, hidden layer and output layer. Because of multiple layers, ANNs are often called Multi-layer Perceptron (MLP).

The first layer has input neurons. These neurons send data to the other deeper layers in the network. After the data is processed through these layers, the final output data is sent to the last output layer. 

In the ANN, all inner layers are hidden. These layers are made of units which adaptively alter the data received from one layer to another through a long series of transformations. The hidden layer is also referred to as the ‘distillation’ layer as the most relevant and useful pattern is extracted from the inputs and sent for further analysis to the next level. Redundant information gets discarded in the process. 

Each layer in the ANN functions as both an input and output layer for understanding complex subjects well. Collectively, all the inner layers are called neural layers. 

Using backpropagation

Using backpropagation is an essential part of Artificial Neural Networks. Backpropagation is a process in which the ANN adjusts the output results by considering the errors in the account. 

During the supervised training phase, every time output is labelled as an error, it is sent backwards through the process of backpropagation. Every single weight is updated to understand how it contributed to the error. 

The error recalibrates the weight of the ANNs unit connections for understanding the difference between the actual outcome and the desired outcome. The ANN will gradually learn to minimise the chances of unwanted results and reduce the number of errors as well. 

Practical Applications of Artificial Neural Networks

Artificial Neural Networks have unique properties and therefore they are used in various applications. Some of the practical applications of Artificial Neural Networks are as follows:

  • Forecasting

Artificial Neural Networks help in making forecasts which impact business decisions greatly. Regular business decisions include capacity utilisation, the financial allocation between goods, sales, etc. 

Apart from these ANNs also help in making forecasts on the stock market, monetary and economic policy, finance and other subjects. Forecasting is quite a complex thing as there are many underlying variables concerned, some of which are known and some are unknown. 

There are things that could be improved in traditional forecasting models. On the other hand, ANNs can extract previously known correlations and unknown characteristics, thus providing accurate forecasts with minimal errors. 

  • Image Processing and Character Recognition

Artificial Neural Networks have a significant role in character and picture recognition. This is because these networks can take in innumerable inputs, process them and derive complicated and hidden, non-linear correlations. 

For instance, handwriting recognition is an integral part of character recognition and is used extensively in various applications like fraud detection and national-level security assessments. 

Apart from character recognition, image recognition is a fast-evolving discipline. Image recognition is now used in various applications right from cancer detection in medical science to facial identification in social media, from defence purposes to satellite image processing, agricultural purposes and so on. 

Deep Learning includes deep neural networks, which have opened up transformative and new advances in natural language processing, speech recognition and computer vision. One of the best examples in this regard is self-driving vehicles. 

Advantages of Artificial Neural Networks

Some of the most prominent advantages of Artificial Neural Networks are as follows:

  • Data storage on the entire network

Data used in traditional programming is not stored on a database; but rather on the whole network. When a few pieces of data disappear in one place, it does not prevent the network from functioning. 

  • Parallel processing capability 

Artificial Neural Networks have the capability of performing more than one task simultaneously. This is possible because ANNs have a numerical value. 

  • ANNs can function with incomplete knowledge 

Post-ANN training, the output will be produced from the given information even with inadequate data. The loss of performance depends upon the significance of missing information. 

Summing it up

Artificial Neural Networks have myriad applications and are being extensively used in natural language processing, spam email detection, predictive analysis in business intelligence, chatbots and so on. 

A course in Data Science and Analytics helps you know more about Artificial Neural Networks. Imarticus Learning offers a Postgraduate Program in Data Science and Analytics for building a career in analytics and data science. The programme offers guaranteed job assurance. The 6 Months programme has almost 300+ learning hours with 25+ projects and 10+ tools. Give your tech career the needed boost with this course. 

Handling Investments: Effective Portfolio Management

Posted on by Imarticus Learning

Portfolio management is crucial for making the most of one’s investments. It helps investors to deal with the risks of the derivatives market. The best results are achieved when investors are actively involved in portfolio management. Portfolio management cushions the risks of the money market and successfully increases the returns on investment. 

Investment Banking Training

Portfolio management mainly functions as a SWOT analysis of various investment areas, considering the objectives and risk tolerance capacity of the investors. Hence, it aids in generating significant profits and protecting the earnings from the dangers of financial markets. A good investment banking certification program can assist one to learn all essentials about the subject.

What is Portfolio Management?

Portfolio management is the idea and technique of choosing and overseeing the various areas of investments. It is mainly concerned with long-term investments and financial objectives keeping in mind the ability of rest tolerance of every company or investor. In other words, portfolio management is the process of dealing with the funds and investments of an investor for a specific period of time.

Portfolio management is essential to protect the funds of the investors from the potential market risks in the money market. The basis of portfolio management is to make better decisions regarding the funds of the clients. Portfolio management not only yields better profits for the investors but also protects their funds from the dangers of the financial markets.

Objectives of Portfolio Management

The main objective and purpose of portfolio management are to assist in selecting the best investment option for an investor. It should be decided to keep in mind the age, earnings, time period and ability to tolerate the risk of the investor. 

The major goals of portfolio management can be enumerated as follows:

  • Increasing the value of the invested capital. 
  • Escalating the returns on investment.
  • Improving the overall quality of the portfolio.
  • Minimising the risks of the financial market.
  • Properly allocating the resources.
  • Expanding the reach of the portfolio.
  • Safeguarding the earnings against the risks of the money market.

Essential Elements of Portfolio Management

The success of portfolio management depends upon the long-term assets of the investors. The assets include cash and cash equivalents, securities deposits etc. by understanding the basics of stock, borrow and lending, one can have a better grip on effective portfolio management. 

The following are the important elements of portfolio management: 

Asset allocation

Asset allocation is all about understanding the nature of different assets and how distinct they are from each other. It means that some assets are less volatile whereas some are highly volatile. Good portfolio management involves investing in different types of assets which will give a good balance and mix of investments to the investors.

Asset allocation helps investors to protect their funds from the risks of the money market. More assertive investors concentrate on investing their funds in volatile areas such as growth companies. whereas investors with a cautious investment portfolio tend to invest more in reliable assets such as equity, Government bonds etc.

Diversification

It is impossible for individuals to accurately predict which investment areas are more profitable and which areas can bear losses. A judicious course of action is to gather a portfolio of investments that provide wide and diversified exposure to certain classes of assets. Sticking to any particular investment area all the time is not an intelligent approach.

Diversification involves laying out the risks and rewards of the investments across or within various asset classes. Diversification aims to identify the returns on investment of all the sectors over a period of time tracking the degree of volatility of each asset. Any individual cannot be totally sure about which security will perform the best and which will surpass the other. 

Rebalancing

Rebalancing is a way of returning the portfolio to its original form. It can be done by realigning the weights of assets in a portfolio. Rebalancing involves regularly selling and buying assets to maintain the degree of asset allocation and risks that was the original intention of the investor.

Rebalancing is mostly done by selling high-value securities and investing that amount in lower-value securities. The rebalancing process allows investors to understand the gains and increase the growth potential in high-value sectors. However, it also maintains the alignment of the portfolio with the initial risk and return profile.

Tax efficiency

An important parameter of portfolio management is how it reduces taxes over a longer period. This relates to the use of various retirement accounts, the period for which different securities are held and the various types of securities maintained. 

For instance, certain Government bonds are exempted from tax. Investing in such securities is an advantage for investors. It implies that any dividend earned through such securities does not come under the purview of taxes. Considering tax efficiency and making smart investments is an essential feature of portfolio management.

Types of Portfolio Management

Portfolio management can be classified into four broad categories that are stated as follows:

  • Active portfolio management: This type of portfolio management mainly focuses on increasing the return on investments by buying undervalued stocks and selling them when the prices rise.
  • Passive portfolio management: This category of portfolio management tries to maintain a fixed type of portfolio by following the present market pattern. Here, the returns are comparatively low but the investment area is less volatile.
  • Discretionary portfolio management: In this type of portfolio management the investor gives complete authority to the portfolio manager to make wise investments on the investor’s behalf.
  • Non-discretionary portfolio management: In this category of portfolio management the portfolio manager can only make suggestions regarding the investment options. It is upon the investor whether one wants to accept or reject the advice.

Conclusion

Effective portfolio management is essential as it allows investors to select the best area and strategy for investing their funds, especially for a longer duration. Making investments is however based on multiple parameters such as rest tolerance, age of the investor and earning capacity. Good portfolio management invests the funds considering all the parameters and still making profits out of it.

If you are interested in becoming an investment management expert and learning the roots of portfolio management then the Certified Investment Banking Operations Professional course by Imarticus is the best pick for you. This course is appropriate for finance graduates with little or no experience. You can learn the insightful features by attending the classroom or online training. You can Ace the world of portfolio Management and investment banking by gaining deep knowledge with the help of the course.

Get a free 1:1 Imarticus counselling
Get a free 1:1 Imarticus counselling