Short answer
Financial analysis turns financial data into explanations and decision-relevant comparisons. Use it when a role investigates performance or evaluates choices, and assess the traceability of the analysis rather than whether stakeholders select its recommendation.
About Financial analysis
Interprets financial data to explain performance, evaluate options, and support decisions. Sound analysis connects a clear question to reliable data, stated assumptions, and conclusions that follow from the evidence.
Use this competency for
- Roles that investigate financial performance, cost drivers, margins, or investment choices.
- Work that compares options and explains financial implications to decision-makers.
Do not use this competency for
- Roles focused only on preparing source records or maintaining approved budget balances.
Important distinctions
Financial planning
Financial analysis answers a defined performance or decision question, while financial planning assembles a connected forward-looking plan.
Accounting controls
Financial analysis interprets data, while accounting controls prevent, detect, and evidence errors or unauthorized activity.
Expectations by level
IC1
Structured analysis
Completes a defined analysis with guidance, uses identified source data, checks calculations, and separates observed results from possible explanations.
Observable behaviors
- Reconciles analysis inputs to the named source.
- Calculates defined comparisons and labels periods and units.
- Lists data limitations and questions that remain unresolved.
Examples
- Builds a monthly cost comparison and identifies that one apparent increase comes from a timing difference.
- Calculates product margins from provided data and flags records without an assigned cost.
IC2
Independent decision analysis
Independently frames and completes analysis for an ambiguous team-level question, tests material drivers, and explains options with assumptions and limitations.
Observable behaviors
- Defines the question, comparison basis, and relevant data before calculating.
- Tests how material assumptions change the conclusion.
- Presents findings, alternatives, and unresolved uncertainty separately.
Examples
- Explains a margin change by separating price, volume, mix, and input-cost effects.
- Compares two contract options using the same time horizon and documents costs excluded from both.
IC3
Cross-functional analytical direction
Sets the analytical approach for material questions spanning multiple teams, resolves conflicting definitions, and enables decisions without overstating what the data supports.
Observable behaviors
- Defines common measures and comparison rules for cross-team analysis.
- Reviews analytical methods for material omissions or unsupported causal claims.
- Connects financial implications to decision thresholds and follow-up measures.
Examples
- Aligns teams on a contribution definition before comparing channels and shows how alternate allocation choices affect the result.
- Structures an investment analysis with staged decision points because later benefits cannot yet be measured.