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Financial Intelligence, Revised Edition
book

Financial Intelligence, Revised Edition

by Karen Berman, Joe Knight, John Case
January 2013
Beginner content levelBeginner
272 pages
6h 32m
English
Harvard Business Review Press
Audiobook available
Content preview from Financial Intelligence, Revised Edition

Part Two

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UNDERSTANDING VARIANCE

Variance just means difference. It might be the difference between budget and actual for the month or year, between actual this month and actual last month, and so on. It can be presented in dollars or percentages, or both. Percentages are usually more useful, because they provide a quick and easy basis of comparison between the two numbers.

The only difficulty with variance when you are reading a financial report lies in determining whether a variance is favorable or unfavorable. More revenue than expected, for instance, is favorable, while more expense than expected is unfavorable. Sometimes the folks in finance are helpful and let you know in a note that a variance enclosed in parentheses or a variance ...

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Publisher Resources

ISBN: 9781422144121