What is a Liquidity Risk Analysis Forecast Report?
Liquidity Risk Analysis reports are considered financial management tools that are used by financial managers to monitor and project the company’s liquidity. A key functionality in this type of report allows the user to score the risk based on a weighted average of various drivers that comprise the overall liquidity risk number as seen in the image below. The user can find more details by expanding the section below the risk rating. In this section, components, such as cash, receivables, EBITDA, payables, debt, and etc. can be viewed. The report pulls these figures from the underlying Cash Flow forecast, which ties to the Profit & Loss and Balance Sheet forecast. You will find an example of this type of report below.
Purpose of Liquidity Analysis Reports
Companies and organizations use Liquidity Analysis Reports to analyze historical and forecasted periods to better manage liquidity. It can also identify unforeseen, as well as, planned business activities that require cash or financing. When used as part of good business practices in a Finance & Accounting Department, a company can improve its liquidity-related decisions as well as reduce the risk that it runs out of money.
Liquidity Analysis Report Example
Here is an example of an easy-to-read Liquidity Risk Analysis report. Because of all the graphical elements, it could also be referred to as a Dashboard.
You can find hundreds of additional examples here.
Who Uses This Type of Report?
The typical users of this type of report are: The Board of Directors, CEOs, CFOs, Treasurers and Analysts.
Other Reports Often Used in Conjunction with Liquidity Analysis Reports
Progressive Finance & Accounting Departments sometimes use several different Liquidity Analysis Reports, along with forecasts and reports for profit & loss, balance sheet, cash flow, receivables aging analysis and other management and control tools.
Where Does the Data for Analysis Originate From?
The Actual (historical transactions) data typically comes from enterprise resource planning (ERP) systems like: Microsoft Dynamics 365 (D365) Finance, Microsoft Dynamics 365 Business Central (D365 BC), Microsoft Dynamics AX, Microsoft Dynamics NAV, Microsoft Dynamics GP, Microsoft Dynamics SL, Sage Intacct, Sage 100, Sage 300, Sage 500, Sage X3, SAP Business One, SAP ByDesign, Netsuite and others.
In analyses where budgets or forecasts are used, the data most often originates from in-house Excel spreadsheet models or from professional corporate performance management (CPM/EPM) solutions.
What Tools are Typically used for Reporting, Planning and Dashboards?
Examples of business software used with the data and ERPs mentioned above are:
- Native ERP report writers and query tools
- Spreadsheets (for example Microsoft Excel)
- Corporate Performance Management (CPM) tools (for example Solver)
- Dashboards (for example Microsoft Power BI and Tableau)
Corporate Performance Management (CPM) Technology Solutions and More Examples
- View 100â€™s of reporting, consolidations, planning, budgeting, forecasting and dashboard examples here
- Discover how the Solver CPM solution delivers financial and operational reporting
- Discover how the Solver CPM solution delivers planning, budgeting and forecasting
- Watch demo videos of reporting, planning and dashboards