business analysis

(noun)

a research discipline of identifying needs and determining solutions to problems facing firms

Related Terms

Examples of business analysis in the following topics:

  • Business Analysis

    • The output of the business analysis stage is a prediction about whether the product is likely to be profitable or not if ultimately produced.
    • The first step in the business analysis process is to examine the projected demand for the product.
    • A complete cost appraisal is also necessary as part of the business analysis.
    • Based on these costs, the business analysis stage will estimate the likely selling price.
    • Demonstrate knowledge of the components included in the business analysis stage of product development

  • Analysis

    • The focus of the business analysis is primarily on profits, but other considerations such as social responsibilities may also be involved.
    • The focus of the business analysis is primarily on profits, but other considerations such as social responsibilities may also be involved.
    • The first step in the business analysis is to examine the projected demand.
    • A complete cost appraisal is also necessary as a part of the business analysis.

  • SWOT Analysis

    • A SWOT analysis allows businesses to assess internal strengths and weaknesses in relation to external opportunities and threats.
    • A method of analyzing the environment in which businesses operate is referred to as a context analysis.
    • Performing a SWOT analysis allows a business to gain insights into its internal strengths and weaknesses and to relate these insights to the external opportunities and threats posed by the marketplace in which the business operates.
    • The main goal of a context analysis, SWOT or otherwise, is to analyze the business environment in order to develop a strategic plan.
    • A SWOT analysis is a strategic planning method used to evaluate the strengths, weaknesses, opportunities, and threats related to a project or business venture.

  • Conducting a Situational Analysis

    • Managers can use various methods of analysis to understand the firm's own capabilities, customers, and business environment.
    • A situation analysis is often referred to as a "3C analysis", but when extended to a 5C analysis it allows businesses to gain more information about the internal, macro and micro-environmental factors within the environment.
    • Businesses must be able to identify whether the collaborator has the capabilities needed to help run the business as well as an analysis on the level of commitment needed for a collaborator-business relationship.
    • Porter five forces analysis is a framework for industry analysis and business strategy development.
    • Firms use Porter's five forces to develop business strategy and conduct competitive analysis.

  • Analyzing Data

    • Data analysis has multiple facets and approaches, encompassing diverse techniques under a variety of names in different business, science, and social science domains.
    • Business intelligence covers data analysis that relies heavily on aggregation and focusing on business information.
    • In statistical applications, some people divide data analysis into descriptive statistics, exploratory data analysis (EDA), and confirmatory data analysis (CDA).
    • All are varieties of data analysis.
    • Types of data analysis outputs: heat map, bar plots, scatter plots.

  • Balance Sheet Analysis

    • In other words businesses also have liabilities.
    • Balance sheet analysis (or financial analysis) the process of understanding the risk and profitability of a firm (business, sub-business or project) through analysis of reported financial information, particularly annual and quarterly reports.
    • Two types of ratio analysis are performed: 3.1) Analysis of risk and 3.2) analysis of profitability:
    • Risk analysis consists of liquidity and solvency analysis.
    • Vendors who extend credit to a business require financial statements to assess the creditworthiness of the business.

  • Break-Even Analysis

    • As long as a business can cover its minimum costs, it is "breaking even" and can remain in business even if it is not turning a profit.
    • For example: a business selling tables has a BEP of 200 tables per month.
    • Business leaders use this information to determine whether or not they will produce and sell 200 tables per month and proceed based on that analysis.
    • Break-even analysis lets companies compare their production or sales with the minimum point (the break-even point) they need to achieve in order to stay in business.
    • Employ a break-even analysis and derive a break-even point when analyzing a business initiative or project

  • Trend Analysis

    • Trend analysis can be performed in different ways in finance.
    • Fundamental analysis, on the other hand, relies not on sentiment measures (like technical analysis) but on financial statement analysis, often in the form of ratio analysis.
    • Creditors and company managers also use ratio analysis as a form of trend analysis.
    • For example, a company may change its business model so that it begins to operate in a new industry or it may change the end of its financial year or the way it accounts for inventories.
    • When examining historical trends in ratios, analysts will often make adjustments to the ratios for these reasons, perhaps performing some ratio analysis in which they segment out business segments that are not consistent over time or they separate recurring from non-recurring items.

  • The Business Plan

    • Elements of a Business Plan: Cover sheet, Executive summary (statement of the business purpose), Table of contents, Body of the document, Business Description of business, Marketing Competition, Operating procedures, Personnel Business insurance, Financial data, Loan applications, Capital equipment and supply list, Balance sheet Break-even analysis, Profit and loss statements, Three-year summary, Detail by month -- first year, Detail by quarters -- second and third year, Assumptions upon which projections were based, Pro-forma cash flow, Supporting documents, Tax returns of principals (partners in the business) for last three years, Personal financial statements (all banks have these forms), Copy of franchise contract and all supporting documents provided by the franchisor (for franchise businesses), Copy of proposed lease or purchase agreement for building space, Copy of licenses and other legal documents, Copy of resumes of all principals, Copies of letters of intent from suppliers, etc.
    • A business plan is a formal statement of a set of business goals, the reasons they are believed attainable, and the plan for reaching those goals.
    • The key elements of a business plan include a comprehensive presentation of relevant information, from market analysis to company financials.
    • If the company is seeking funding, the business plan gives potential investors an understanding of your proposed business and the money required.
    • Market Analysis: Provides the specific industry, market, and competitive analysis information needed to understand where and how the company is positioned in the overall market.

  • Using Financial Statements to Understand a Business

    • Two types of ratio analysis are analysis of risk and analysis of profitability:
    • Risk Analysis: Analysis of risk detects any underlying credit risks to the firm.
    • Risk analysis consists of liquidity and solvency analysis.
    • Profitability analysis: Analyses of profitability refer to the analysis of return on capital.
    • Explain how a company would use the financial statements to perform risk analysis and profitability analysis