Month: Oct 2019

Variances are not ALL bad – just mostly

My criticisms of variance analysis are directed at its use to analyse performance. This shouldn’t be taken to mean that I believe all forms of comparison are invalid. Quite the contrary. A number in isolation signifies nothing. It has to be compared to something else to mean something – the issue is what should it be compared to and what conclusions can be drawn from this? 

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Everything you know about measuring financial performance is wrong. Here’s why…

How should we measure financial performance? For decades, this question was rarely asked, because the answer seemed obvious.

It was obvious because we’d all been schooled and drilled to use one tool: variance analysis, where the actual for a period is compared to a fixed target. 

Continue reading “Everything you know about measuring financial performance is wrong. Here’s why…”