Financial Analysis Tools

Financial analysis tools can range from the analysis software being used to the tools within the software, such as formulas and functions.

The software of choice to analyze data is usually a spreadsheet program such as Microsoft Excel.  Excel is very popular because it's on most computers and is therefore able to be shared via e-mail or retrieved from a disk or folder.

Within a spreadsheet program are many tools that are available for the analyst to use:

  • A database to store data

  • Formulas to manipulate data

  • Functions that manipulate and report data

  • Reporting features for a professional looking report

The person analyzing the data needs skills or tools himself. These include:
  • Knowledge of the data being manipulated

  • Skillful knowledge of Excel or other software being used

Analyzing data can be painful if the analyst does not know how to use the software well. The software developers have created many tools that are available to make the job as easy as possible, but if the analyst is unaware of these tools or does know how to use them, they are of little use.

A very important tool the analyst should possess is the knowledge of the data being manipulated. If the data is only numbers to the analyst, chances are mistakes are going to be made. If the analyst understands and knows the products that the numbers have come from, then he will understand if the manipulated data makes sense or not.