What are the different methods to follow in financial evaluation: A complete guide

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Have you wondered how to analyze finances properly? And how to make a well-informed decision about your finances? If yes, read on!

Businesses need to recognize the importance of accurate financial evaluation to optimize resource allocation and maximize profitability. The financial evaluation techniques enable businesses to find profitable projects and identify economic trends. Also, it assists in making sound financial decisions. Financial analysts examine various types of financial statements to study past statistical data and predict the future of the business.

Building a career in this industry is simple. Follow different ways to learn about advanced financial evaluation techniques and understand the requirement of financial analysis tools. This includes a Diploma In Finance Management or an Advanced Management Program In Financial Services.

Financial Analysis: A Complete Guide

The financial evaluation techniques assess economic trends to create financial objectives. They also help create long-term plans and find potential investment opportunities. This process involves combining financial data with trends.

The income and cash flow statements and balance sheets are some of the types of financial statements that a financial analyst will review. Understanding the importance of accurate financial evaluation helps one make better business decisions, wherein the accounts unit conducts a data study called corporate evaluation.

In investment finance, an analyst (not employed by the company) analyses financial data. They use macroeconomic factors and ratio analysis to determine future growth and profitability.

financial services course

Types of Financial Evaluation Techniques

Understanding different financial evaluation techniques will help to make decisions and identify growth potential. Some of them are:

Vertical Analysis.

The analyst examines income statements and divides them by revenue to identify percentages. The results must be comparable to same-sector businesses to measure growth and profits.

Horizontal Analysis.

The horizontal analysis compares data from various years to analyze business growth. This makes it easier for an analyst to see significant trends and test growth.

You need more than 8 years of data to do a useful trend analysis that can be compared to other businesses in the same sector.

Ratio Analysis.

It compares the components of a financial statement to identify upward or downward trends. It's a simple way to get a sense of a company's financial situation.

It also reveals more specific linkages between data. Such as between profit and revenue, as well as liability areas like employee turnover.

Trend Analysis.

To predict market directions, analysts study past data from trading volume and price movement. It is based on the notion that past events will repeat themselves in the future.

This pattern assists firms in better preparing for upward trends and reversals. Trend analysis is essential to earn higher profits.

Cost Volume Sales Analysis.

Businesses can better understand the relationship between expenses, sales, and business profit. To help owners better plan and project profits, it evaluates business and variable costs.

This helps establish the relationship between company sales and variable costs.

You may consider enrolling in a financial services course. They can help you learn about financial analysis and build a career.

The Advanced Management Program in Financial Services is one such course. It is one of the top IIM Lucknow Certificate Courses. It gives you a good understanding of investment banking, market risk, fintech, as well as the requirement of financial analysis tools.

It is a 6-month intensive course. It offers a good curriculum. It is for professionals with two years of experience. It empowers them to restart their careers in financial services.

Why Enroll In Advanced Management Program In Financial Services by IIM Lucknow?

The benefits of enrolling in the Advanced Management Program in Financial Services, IIM Lucknow are:

Offers IIM Lucknow alumni status and completion certificates.

Has a six-day campus immersion.

Provides chances to take classes on campus and learn from top educators.

Equips professionals with knowledge of both traditional financial services and modern fintech.

Follows a case-study-based approach to focus on practical aspects. These will be among the key learnings from the course.


The job profile of a financial analyst has increased by 30% over the past ten years. The finance sector operates on the basic concept of lesser supply and higher demand. Hence, they are in demand more than ever.

Professionals with higher knowledge of financial evaluation techniques may find jobs in top firms. Employers include HDFC, Oracle, HSBC, KPMG, TCS etc.

So opt for IIM Lucknow's Advanced Management Program in Financial Services.

Restart your career right away!

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