Materiality in Financial Analysis and Modeling
What is Materiality The materiality of a transaction amount or a financial statement line item is determined based on the impact of a misstatement of information on the intended users of that information. If the stakeholder is most likely to alter their actions if we presented the information correctly, the mistake is considered material. And, […]
Creating a Variance Analysis Model – Part 2
This article builds upon the theory discussed in Creating a Variance Analysis Model – Part 1. Be sure to read this article before looking at the more practical examples below. Building a Variance Analysis Model in Excel Let’s create an Excel model to perform our variance analysis. For the exercise, we will assume a simple scenario […]
Creating a Variance Analysis Model – Part 1
Today we will take a more detailed look at Variance Analysis. In this article, we will deal with the theory, and in next week’s article, we will build an Excel model to look more practically at the subject. Variance Analysis Variance analysis looks at the differences between planned and actual numbers. This method is used […]