FP&A Course - P&L analysis (advanced)

Access FP&A Income statement analysis Course: https://ebitda.thinkific.com/pages/start

A very common mistake when analyzing income statement is to look at the variances vs previous period of target, and make assumptions of the performance based on the variances alone. This is a risky way of analyzing the income statement. This is because you have not analyzed the results thoroughly enough to understand the impact of price vs volume and mix impact. This can lead to incorrect conclusions and explaining the income statement performance incorrectly. This is why I highly recommend that you perform the price, volume, mix and cost analysis first and then proceed with making conclusions or statements on income statement performance.

If you are a financial analyst, or a business analyst, this skill is a MUST HAVE. But its not as easy as it sounds sometimes. Specially understanding the difference between volume and mix, and how price impact is calculated vs quantity (volume and mix). In the end, all the variances should add up to the difference or variance you are seeing in the income statement. A good way is to prepare a bridge or a walk for Net sales, gross profit and EBITDA, both for amount change and also for % change. This is exactly what I cover in the course in detail with examples and a downloadable excel file with calculation of all the variances, bridges and waterfall charts.