How to improve enterprise operation through data analysis

Financial analysis is an attempt to understand the true face of enterprise's operating performance and financial situation, dig out the economic significance behind accounting data from obscure accounting procedures and provide decision-making basis for investors and creditors. Because the accounting system only selectively reflects economic activities, its confirmation of an economic activity will lag behind for a period of time, coupled with the imperfection of accounting standards and the freedom of managers to choose accounting methods, there will inevitably be many inappropriate places in financial reports. Although auditing can improve this situation to some extent, auditors cannot absolutely guarantee the authenticity and appropriateness of financial statements. Their job is only to provide a reasonable basis for report users to make correct decisions. Therefore, even the financial statements that have been audited and obtained unqualified audit reports cannot completely avoid this inappropriateness. This makes financial analysis particularly important. I. Main methods of financial analysis Generally speaking, there are four main methods of financial analysis: 1. Comparative analysis: it explains the quantitative relationship and difference between financial information, and points out the direction for further analysis. This comparison can be compared with the actual plan, the current period and the previous period, and also with other enterprises in the same industry; 2. Trend analysis: it reveals the changes in financial status and operating results, their causes and nature, which is helpful to predict the future. The data used for trend analysis can be absolute value, ratio or percentage data; 3. Factor analysis: in order to analyze the influence of several related factors on a financial index, the method of difference analysis is generally adopted; 4. Ratio analysis: Through the analysis of financial ratio, we can know the financial status and operating results of enterprises, often with the help of comparative analysis and trend analysis. The above methods overlap to some extent. In practical work, the ratio analysis method is the most widely used.