Comparison of Various Analysis Methods

Variance analysis or analysis of variance (ANOVA) is the estimation of the difference between budgeted, standard, or planned amount and the actual amount received or incurred. 80/20 Pareto analysis or 80/20 rule holds that in most circumstances, 80% of the activities are determined or controlled by 20% of the causes. ‘What if…’ simulation or sensitivity analysis is the technique of applying changes in the parameters in a given situation or model and finding out the effects of such changes.

Competitive analysis explores the level of competition in the industry, sector, or market niche, which could impact the marketing prospects of a product or a service. Break-even analysis evaluates the break-even point at which the costs and expenses equal the revenues of the firm. Key ratio analysis or financial ratio analysis is the determination of the relative magnitude ratio of two selective numerical values in the company’s financial statements.

Dozens of key sub-ratio analyses are applied in five major ratio analyses, namely, liquidity ratios, activity ratios, debt ratios, profitability ratios, and market ratios. SWOT analysis is the assessment of the strengths, weaknesses, opportunities, and threats that could influence the performance of the organization. PEST analysis is the scanning of external macro-environmental change factors related to the political, economical, social, and technological spheres.

Review of this method in Business Analysis Toolkit

The detailed review of this business analysis method is a part of Business Analysis Toolkit. In this review you will learn:

  • What problems are solved by this method and how?
  • How to use the method step-by-step
  • Pros and cons for this method
  • Best practices for the method
  • Practices to avoid
  • Summary about the method

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