The right analysis tools Assignment Example | Topics and Well Written Essays - 500 words

The right analysis tools - Assignment Example For instance if an analytic tool such as the net margin ratio revealed that the firm’s profit margin was low, the analytical tool by itself would not give the person that found those results any type of plan on how to fix the problem. The managers are the people that interpret the data to determine the best course of action to fix the issue the firm is facing. Analytical tools without a manager or decision maker competent to make good decisions on how to remedy the situation are virtually worthless. The use of financial analytical tools help increase the credibility of the information been released by the management team of a company (Dooley). The use of analytical financial tools can greatly help a manager’s ability to make routine decisions. For instance a company can have daily income statements to determine the profitability of a firm on a daily basis. If a manager notices that the profitability of a firm goes down for several consecutive days he can then check and audit the numbers to determine the factors that caused the profitability of the firm to go down. Analytical tools can also help in quality and staffing considerations. It is important for the HR department of firms to use analytical tools to evaluate the performance of each of their employees. 3. How can analysis tools help the finance or accounting arms of a company more so than operations managers? (For example, do computers really think? Do they learn from their mistakes? Can they manipulate or change their environment?) Analytic tools to evaluate operation management are important, but I believe that analytical tools to evaluate the finances or accounting or a company can be more valuable. The reason for my opinion is based on the fact that finance analytical tools can help managers determine critical information about the status of an ongoing operation. For example the current ratio is a finance analytical tool that helps