The Tools of Analysis in a Corporate Sector

Introduction

Tools of analysis in any organization are very important and they supersede the inexperienced managers’ mandate to meet their organizational duties. This is because if these tools are correctly applied by the management, it will be in a position to make the projections for the organization and consequently, the right investment decisions. It is of essence that the objectives of the corporates are not overrun by the inefficiency of the inexperienced management team.

The financial tools are of important essence in both day to day running of the business as well as for major decisions. Although the tools are expected to aid the decision making process, they also act as guiding parameters to ensure that inexperienced managers do not make unsound decisions as the negative changes in these tools acts as cautionary measures to such managers.

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Tools of Analysis in the Finance Department and Accounting Department

The importance of tools of analysis in the finance and accounting departments cannot be ignored. These tools help an organization to make the management decisions more effective, especially where investment and cost cutting decisions are concerned. Therefore, the tools act as supplements to the operations managers as they help them to execute their mandates more effectively.

Although computers cannot think like a human being, computer programs are coded with a specific objective in mind. The programs that lead to the results of the tools of analysis are coded in such a manner that industry standards are effectively observed. This makes the results of the tools of analysis to have major impact in the decision making process in an organization.

Tools of analysis can help an organization more than an operation’s manager in that they can produce their results quickly and may not be subjected to human factors that may jeopardize productivity of an operation’s manager (Tinghino, 2008).

However, the input of an expert such as operation managers must always counter check the results as computers have no ability to learn from their mistakes. Such counter checking would ensure that any mistake that arises is resolved amicably so that future results of the tools of analysis are in line with the intended mandates of the organization.

The human input is also necessary as the computers cannot manipulate and change their environment. The role of the tools of analysis should be to aid the management in decision making process and not to replace it from the decision making mandate (Mun, 2006). This brings us to a conclusion that although tools of analysis may help inefficient managers to make efficient decisions, human input remains to be of paramount importance.

Cases of Wrong Input Data

Computers operate from input data. If the input data is wrong, tools of analysis cannot have any beneficial outcome to an organization in that the result they will post will also be wrong. A possibility of wrong data brings us to the knowledge that tools of analysis cannot be solely left to influence an organizations’ decisions.

Tools of analysis require a human input to counter check the results produced by computer systems (Helfert, 2001). This realization may make us conclude that tools of analysis cannot be used to cover for weaknesses of inefficient management as they require a management that clearly understands its mandates. An ineffective management may not be in a position to differentiate the results from wrong data and that result that originated from the right data.

In conclusion, it is prudent to assert that tools of analysis help management to make sound decisions concerning various levels of management inputs. The tools can also greatly aid an inexperienced management to make sound decisions concerning various business inputs. However, it would not be prudent to leave an inefficient management to depend fully on the tools of analysis as they are prone to many external factors such as rigidity as far as change in environment is concerned.

References

Helfert ,E., A. (2001). Financial analysis: tools and techniques: a guide for managers. London: McGraw-Hill Professional.

Tinghino, M. (2008). Technical analysis tools: creating a profitable trading system. New York: Bloomberg Press

Mun, J. (2006). Real options analysis: tools and techniques for valuing strategic investments and decisions. New York: John Wiley and Sons.

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