United International University

ASSIGNMENT
School of Business & Economics

HOW BUSINESS ANALYTICS APPLICATIONS

WORKS IN FINANCIAL ACTIVITIES

SUBMITTED TO SUBMITTED BY
Dr. Md. Qamruzzaman ACMA Md. Mostak Anwar
Associate Professor ID: 112-193-033

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Abstract
The activities within the various sectors like banking, debt or leverage, credit, capital markets and
investments involve finance as a broad term. In general finance involves managing of cash and also the
process of acquiring the funds for meeting various requirements. Finance also incorporates the
oversight, creation and aspects of the financial systems. A blend of finance and therefore the in-trend
technology is understood as Analytics. Financial analytics may be a model that gives different
interpretations about the business financial systems. It gives in-depth understanding and take strategic
actions to enhance business overall performance. It plays a decisive role in computing business worth.
Finance is making its way as an important business function and it intersects with analytics in many
regions. Financial experts are trying to find a replacement technology in the field of finance that are
changing needs of the normal financial practices which led to wish & emergence of Financial
Analytics. Data is collected from contingent sources like websites and articles. Financial analytics
concentrates on the effective analysis for the effective management of the assets of an association such
as cash, machinery etc. Analyzing this financial situation, condition and shaping up tomorrow’s goals
is what financial analytics is about. It offers an entire understanding about the financial condition of the
organization and progresses the profitability, income and assessment of the business. Financial
analytics assists in taking several clever decisions to possess a smooth income, minimize the price,
increase profits etc. Accounting, tax and other areas of finance are often monitored with the assistance
of monetary analytics which is given a knowledge Warehouse which consists of the past and useful
data associated with business which can help to watch business activities and reach all the objectives of
the business.

“Organizations need to innovate in response to changing customer

demands and opportunities offered by
technology and changing marketplaces, structures and dynamics
(Baregheh, Rowley, & Sambrook, 2009).”

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Introduction
As a part of business intelligence and enterprise overall management, financial analytics facilitates the
effective forecasting & planning their further actions for all parts of the business. The use of a treasure
of financial and other significant data from several departments throughout their enterprise, corporate
financial teams are analyzing and using this data to help top level management make well-versed
decisions and enhance the company's value. Financial analytics gives an appropriate insight or report
about the organization’s economic condition and thus assists in improving the income and significance
of the business. Additionally, financial analytics also assists the organizations to enhance income
statements and processes being carried out in business. Financial analytics assists find out answers for
all the questions related to one’s business and also helps to compute the profitability & forecast the
future conditions of business. Financial analytics assists in determining future business goals which
also improves the choice making strategies of a business.

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Objectives of the Study
1. To understand the importance of financial analytics
2. To understand the role of analytics in business sector
3. To study the changing trends in technology for better management of finance/money
4. To analyze past data which will provide a future direction for better decision making

Research Methodology
The data is collected from secondary sources such as websites and online reading material on financial
analytics. Oracle model of financial analytics is referred to understand the practical application of
financial analytics used in business.

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Importance of Analytics
 Today’s businesses require timely information for decision-making purposes.
 Every company needs prudent financial planning and forecasting.
 The diverse needs of the traditional financial department, and advancements in technology,
all point to the need for financial analytics.
 Financial analytics can help shape up the business’ future goals. It can help you improve the
decision-making strategies for your business.
 Financial analytics can help you focus on measuring and managing your business’ tangible
assets such as cash and equipment.
 It provides an in-depth insight into the organization’s financial status and improves the cash
flow, profitability, and business value.

FINAL THOUGHT
Today, analytics has become an essential component for businesses and organizations to stay
competitive and relevant. Financial analytics helps businesses understand and interpret their current
and past performance, and predict future performance to make better business decisions. Financial
analytics software helps in speeding up the creation of reports and enables data presentation through
graphs, which are much easier to read and comprehend.

[Source]

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Literature Review
[Dimitris Andriosopoulos, Michalis Doumpos, Panos M. Pardalos & Constatin Zopounidis-2019] in
their article titled “Computational approaches and data analytics in financial services” provides an
overview of the main financial applications of computational and data analytics approaches, focusing
on the coverage of the recent developments and trends. Also covers different methodological tools and
their uses in areas, such as portfolio management, credit analysis, banking, and insurance.

[Md. Morshadul Hasan, József Popp & Judit Oláh-2020] in their article titled, “Current Landscape and
Influence of Big Data on Finance” study highlights the influence of big data on internet banking,
financial markets, and financial service management. Study also presents a framework, which will
facilitate the way how big data influence on finance. Some other services relating to finance are also
highlighted here to specify the extended area of big data in financial services.

[Meryem Ouahilal, Mohammed El Mohajir, Mohamed chahhou, Badr Eddine El Mohajir-2018] in

their research titled, “A Comparative Study of Predictive Algorithms for Business Analytics and
Decision Support systems” research work made a literature survey of predictive analytics for business
decision support and run a comparative study of predictive algorithms to provide a financial time series
forecasting. Three regression algorithms have been conducted which are multiple linear regression,
support vector regression and decision tree regression to evaluate their effectiveness of making
forecasts.

[Markus Esswein, Peter Chamoni1-2018] in their research titled, “Business Analytics in the Finance
Department” research work conduct a literature review looking at the finance department, i.e. financial
and management accounting, and identify hotspots of current and potential future research. Summarize
their findings in a framework for literature classification with the two dimensions accounting activity
and rationale for business analytics.

Businesses these days are very complex due to the innovation of technology. Plenty of complexities,
questions etc. keep rising in the intelligent minds of business leaders. Analytics arrange for the
solutions to all these complexities. Financial analytics assists the managers/decision makers in the
organization to have accurate reports & information of the business activities.

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Below are few complex questions which analytics can answer:

 The probability of the success of the various investments.

 Which sector of the market is probable to raise more profit to the business in the future?
 What is the profitability of the product through various sources of sales?
 What are the threats involved in various situations that are forecasted?
 What are the factors that will affect the business in the future?
 How to carry out the business processes more effectively?

One must understand about Analytics in general i.e., Integrated analytics and importance of Data
warehouse as all the data which is to be analyzed which is stored in Data warehouse.

Framework of Financial Analytics

INTEGRATED ANALYTICS
Now-a-days, integrated analytics is in trend and used by almost every organization to compete in the
market for existence. Integrated analytics will guide the organizations to make timely reports and share
it among the internal & external sources for further improvement. Integrated analytics is an integrated
solution that combines performance management, analytics and business intelligence tools in a single
bundle.

DATA WAREHOUSE
The data warehouse consists of critical analytical components like data stores, data marts and reporting
applications. Data warehousing in the future will necessitate rich analytical abilities. Clever decisions
are easily made when the data and business procedures are unified across all business activities in an
organization.

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Financial Analytics software which is the one of the best in market include:

ORACLE ANALYTICS FOR FINANCE PROFESSIONALS

Oracle Analytics delivers a complete suite of tools and features designed to help ingest, process and
manage financial data all to deliver unified insight into financial results while offering predictive
modelling to stay ahead of market changes. The general features of financial analytics software are:
 It reduces Human Bias/errors.
 Use the existing resources to the fullest.
 Associate data for Greater Accuracy.
 Increased efficiency, Better models, and projections based on Artificial Intelligence while
generating reports.

Oracle Financial analytics benefits to boost the money performance by analyzing the information
regarding the cost incurred & Profit of all the departments in an organization. It will escalate the cash
flow by accurately monitoring & managing the assets, liabilities, inventory etc. You can generate
reports on a regular basis which helps in determining & enhancing the performance of the
organization. It additionally helps to possess a future forecast and organize your budget well. In short,
Oracle financial Analytics code can guide to boost the money health of the business.

Few tools that oracle financial analytics application include:

 Fixed Assets Analytics – Deals with the measuring assets’ life.
 Budgetary Management Analytics – It helps in avoiding over disbursal through effective
planning of the budget and disbursal effectively.
 General Ledger Analytics – Monitor the financial activities of the corporate through varied
factors.
 Profitability Analytics – Helps in distinguishing variety of customers and those channels which
add additional profit to the organization.
 Payables Analytics – Deals with Liabilities.
 Receivables Analytics – Deals with Current assets i.e., Receivables.
 Proactive Intelligence – It is an indicator regarding the problem to the managers of the
organization that helps to provide instantaneous decisions and solve the problem through
further actions.

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 Pre-Built Information Models and Metrics – Oracle money Analytics has over a hundred
metrics and models.
 Out-of-the-box integration with ERP systems – It assists in simple integration with ERP
systems at a low risk, less price and lower effort.
 Oracle financial Analytics for Oracle Fusion Applications – It assists in knowing company’s
past,
gift and future performance that allows to take sensible selections.
 Powered by Oracle Business Intelligence Foundation – Generates prime quality reports and
encompasses a practical dashboard and is very climbable.
 Exalytics prepared – It drives on the far side of morals of an ancient information analytics and
offers deeper data regarding massive volume of information at the speed of thought.

A PICTURE OF THE ORACLE FINANCIAL ANALYTICS TOOL

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Statements used in Financial Analytics

BALANCE SHEET
Balance sheet deals with showing the current position of the firm. Financial components related to
assets & liabilities are listed and it doesn’t provide the strategies about how they are managed and
monitored which helps in the future for better performance of business.

CASH FLOW STATEMENT

Cash Flow statement includes the cash inflow & outflow of cash in the organization. This shows the
exact figures of the firms’ receipts, bills, debts & Growth in terms of cash of the organization.

Components to figure out the Financial trustworthiness

LIQUIDITY
Liquidity refers to the free flow of cash & other assets to clear organizations’ bills, debts etc. Low
liquidity generally refers to the poor performance & high requirement of capital. The liquidity differs
from time to time due to the variants such as sales, expenses, economic condition etc.

LEVERAGE
Leverage is the capital borrowed from various sources, expecting the profits made to be greater than
the interest payable. Leverage is an important characteristic which is well-thought-out mainly by
bankers and investors.

PROFITABILITY
Profitability depicts to the fetching of the profit from the amount invested as capital in the business
activities. The components which affect the profitability are trend in market, prices of raw material in
market, asset valuation etc.

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Final Thought
At the end of the study a clear understanding about the importance of using financial analytics in
today’s world is explained with the help of the framework of analytics i.e., use of data warehouses and
software. Application of Oracle financial analytics model has helped companies to grow and financial
statements such as income statement, cash flow statement and balance sheet are used as a tool for
measuring financial performance which will help in enhancing the financial position. Financial
analytics is becoming a boon now-a-days which is expected to play a key role in organization
functioning.

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CONCLUSION
Financial Analytics is a concept which can be utilized by every type of Business, Be it a small or large.
It gives a clear picture of the current trend in the market which assists the decision makers to adapt and
function efficiently. Financial analytics offers generation of reports in regular intervals on which
bankers, investors, management analysts etc. can rely upon. The emergence of financial analytics is a
huge boost to the business organizations.

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