Financial Business Analytics 1 to 32.docx - FINANCIAL...

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FINANCIAL BUSINESS ANALYTICS (FBA)
Course Code: SLBA605
Session
No
Title of the Topics Discussed Page No
Module 1: Introduction to Financial Analytics
1 Definition, relevance of Financial Analytics 2-6
2 Recent trends in Financial Analytics 7-17
Module 2: Financial Time Series and Their
Characteristics
3 Asset Returns 18-23
4 Distributional properties of Returns 24-29
5 Review of Statistical Return 30-34
6 Properties of Financial Time Series 35- 36
7 Time Series Analysis with ARIMA 37-44
8 Forecasting and Box-Jenkins ARIMA Model 45-51
Module 3: The Capital Asset Pricing Model
9 Basics of Portfolio Construction 52-55
10 Diversification and Portfolio Optimization 56-64

Session -1- Introduction to Financial Analytics
Definition, relevance of Financial Analytics
Introduction
There is an increasing use of analytics in many organizations these days. Today’s businesses
needs timely information that helps the business people to take important decisions in business.
Finance plays an important role in increasing the value of your business. Finance is finding its
way as an important business function and it overlaps with analytics in many areas. Financial
executives are finding out new ways in the field of finance to increase the value of their
organization.
What is Financial Analytics
Financial analytics is a field that gives different views of a company’s financial data. It helps to
gain in depth knowledge and take action against it to improve the performance of your
business. Financial analytics has its effect on all parts of your business. Financial analytics
plays a very important role in calculating the profit of a business. Financial analytics helps you
to answer all your business questions related to your business and also lets you to forecast the
future of your business.
Financial analytics used in two different contexts:
 Analytics within the finance function
 Analytics related to financial markets – This is where majority of the FBA syllabus
is covered.
Financial analytics in the finance function has to do with analysing the 3 big financial statements
(the balance sheet, income statement, and statement of cash flows) within a company.
Management accountants and financial analysts also go into detail in terms of tracking the
financial health of the business in a much more granular manner, flagging deviations from
budget and other areas worth looking into.
In the financial markets, the focus is on financial assets such as stocks, bonds and
commodity prices (among many others). The work is similarly quantitative, but with a
heavy dose of theoretical models (CAPM pricing, portfolio theory, factor analysis etc)
and statistical models (time series modelling and forecasting techniques).

Why Financial Analytics is important
• Today’s businesses needs timely information that helps the business people to take
important decisions in business.