Most people, ok all people I know anyway think of accounting is boring. Counting numbers, checking everything balances can seem tedious and boring and it can be. There is no question about that. What people fail to understand is that accounting is more than just counting numbers. Accounting is recording financial information but it also involves analysing financial information and that’s where it starts to become fun.
With analysis you can identify trends like why is that product line outperforming that other one and why do two different sales people yield two different results. Its fun because it can really make a difference to a business or organisation. Whereas recording information involves something that has occurred in the past with analysis you can provide insight and information that can make changes in the future. If you were Sony and didn’t know that producing more Walkman’s was continually losing you money you wouldn’t know that you needed to change anything. This is financial analysis in action. This does of course assume that you wouldn’t change anything without proof and there are organisations that operate this way but it always better and more sound to make decisions where you have reliable information to support your decision.
So financial analysis can help you make choices between products but it can also help you make choices in how you do business. Making the choice between using couriers, regular post or using pick up points and comparing them to the gross profits they generate is another example of financial analysis in action.
Financial analysis goes beyond the scope of high school accounting students and in college we are given a basic understanding of these principles. It is when we go into the “real world” that these principles are used. That is why it is so important to master them at college so that when you do go out into the workplace you can use these skills to the best of your ability.
This is why so much time is spent on mastering the accounting basics from the fundamentals to the analytical skills you need to be successful. Spend some time at the store and start mastering those concepts. You will not only excel in high school and college but in your career as well.by