Financial Planning & Analytics Cheat Sheet

What is FP&A? Key pain points in FP&A 7 FP&A Approaches

FP&A stands for Financial Planning and Analysis. It is a 1. Zero-Based Budgeting
function within a company that is responsible for financial Poor data quality can lead to inaccurate forecasts,
Data Quality incorrect analysis, and poor decision-making
planning, budgeting, forecasting, and analysis to support This involves starting each budgeting cycle from scratch, rather
decision-making and strategic planning. than basing budgets on the previous year's spending.
It can be challenging to keep up with new
Technology technologies and to ensure that existing systems are
2. Rolling Forecast
optimized for the team's need
Long Range Revenue and Opex Income Statement
Planning Planning Forecasting It involves regularly updating forecasts based on the latest data
Time Tight deadlines can lead to rushed analysis, errors, and trends, rather than relying on annual or quarterly forecasts.
Constraints and incomplete reports.

Compensation Balance Sheet & 3. Driver-Based Planning

Capex Planning
Modelling Cashflow planning Data FP&A teams may struggle to manage large amounts
Complexity of data and to integrate data from different sources It involves identifying the key drivers of business performance,
such as sales volumes, pricing, or resource utilization, and using
Sales & Operations Workforce Need to align with sales, marketing, and operations, these drivers to build financial models and forecasts.
Sales Forecasting
Planning Planning Collaboration to ensure that financial plans align with business
objectives 4. Activity-Based Costing

This involves allocating costs to specific activities or products

based on the resources consumed by each of them.
Process flow Financial Terms explained
5. Top-Down Planning

Variance Scenario Analysis This involves starting with the overall strategic goals of the
Building Financial
Gathering and company and then breaking them down into specific targets
Models and Difference between actual Testing the impact of
Analyzing Data for each department or business unit.
Forecasts financial performance and different scenarios such as
budgeted or forecasted market conditions on
performance financial performance 6. Bottom-Up Planning

It involves starting with individual departments/ business units

Sensitivity Analysis Forecast Accuracy
Reviewing and and building up to an overall budget or plan for the company
Analyzing Financial Providing Insights and Testing the impact of The measure of how
Performance Recommendations changes to key closely actual financial 7. Integrated Business Planning
assumptions, like changes performance aligns with
in pricing or assumptions, forecasted financial This involves bringing together financial planning and
on financial performance performance operational planning into a single, integrated process

Opex
Monitoring and Capex
Adjusting Plans The day-to-day expenses
Do you know?
Investments in long-term
of running a business, According to a survey conducted by Adaptive Insights, nearly
assets, such as property, 90% of companies use spreadsheets as a primary tool for
such as salaries, rent, and
plant, and equipment budgeting and planning
utilities

KPIs for functions

Cash flow Manufacturing Supply Chain Sales IT& Tech HR

Number of Compensatio
Operating Order Fill Cash-to-Cash Sales Growth Sales IT Budget Employee
Cash Overall Security n Ratio =
Cash Flow Production Rate = Cycle Time = Rate = ((Current Conversion Variance = Turnover Rate =
Conversion Equipment Incidents (Total
(OCF) Ratio: Yield = (Good (Number of Number of Sales - Previous Rate = Actual IT (Number of
Cycle (CCC): Effectiveness (Number of Compensatio
= Operating Units Orders Filled Days Inventory Sales) / Previous Expenditure - Employees
= Days of (OEE): Sales / n Expense /
Cash Flow / Produced / in Full / Total is Held + Sales) x 100 Budgeted IT Separated /
Inventory OEE = Mean Time to
Total Units Number of Number of Number of Expenditure Average Total
Revenue Outstanding + Detect (MTTD)
(Availability) x Leads) x 100 Revenue) x
Started) x 100 Orders) x 100 Days Sales Number of
Days of Sales (Performance) x and Mean Time
Outstanding - Employees) x 100
Outstanding - (Quality) CAC = (Total to Respond
Cash Flow Number of 100
Days of Sales and (MTTR)
Margin = Days Payables CLTV =
Payables Inventory Marketing IT SLA
Operating Outstanding (Average
Outstanding Cycle Time = Cost per Unit Turnover = Costs / Number Performance
Cash Flow / Annual Employee HR Expense
(Total = (Total Cost of Goods of New = (Number of Technology
Net Sales Revenue per Retention Rate Ratio = (Total
Production Manufacturin Sold / Warehousing Customers SLAs Met / Adoption Rate
Customer x = ((Number of HR Expenses
Cash Reserves Time / Total g Costs / Total Average Cost as a Acquired) Total Number = (Number of
Average Employees at / Total
in days = Cash Units Units Inventory Percentage of of SLAs) x 100 Users Adopting
Cash Flow to Customer End of Period - Operating
reserves/ Produced) Produced) Value Revenue = New
Debt Ratio = Lifespan) Number of Expenses) x
average daily (Total Technology /
Operating New Hires) / 100
expenses Warehousing Sales Win Rate Total Number
Cash Flow / Number of
Total Debt On-Time Costs / Total = (Number of Sales-to- of Users) x 100
Transportatio IT Cost as a Employees at
Delivery = Order Lead Revenue) x 100 Won Forecast
n Cost per Percentage of Start of Period)
Free Cash (Number of Time = (Time Opportunities Variance =
Unit = Total Revenue = x 100 Cost per Hire
flow = OCF + Orders Taken from / Number of (Actual Sales
Transportatio (Total IT IT System = (Total
Interest Delivered on Order Order Cycle Opportunities) - Forecasted
n Costs / Total Expenses / Availability = Recruitment
Payments - Time / Total Placement Time = Time x 100 Sales) /
Units Shipped Total (Total Uptime Diversity and Costs /
Asset Number of to Delivery) Taken from Forecasted
Revenue) x of IT Systems / Inclusion Number of
Purchase Orders) x 100 Order Sales
100 Total Time) x Metrics Hires)
Placement to
100
Delivery

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