Power skills | Storytelling
Telling a story with your numbers
Think about the ‘why’ behind your data, what the financial metrics tell you, and how they will enable better decision-making for you and the wider business
Words Sophie Cross
To progress and have influence in the business world, you must not only understand how to process numbers but also how to translate them. The more helpful the information you can derive from the data and communicate to the broader organisation, the more value you will offer to the business. This should result in more pay rises and promotions down the line.
Delivering information effectively
You must think about what the financial metrics tell you and how you best relay that information to your colleagues and the wider organisation. Remember that the insights you give with the numbers need to be understood by a diverse range of people across different departments and job roles, probably with little or no financial background. Your colleagues should then be able to decide on actions to take based on the data stories you tell them, so your communication skills really matter.
UNDERSTANDING FIGURES
What can financial metrics tell you?
1
Revenue
The sources of income for a business
2
Costs
Fixed and variable costs incurred to run the business
3
Assets and liabilities
How much cash there is in the business, tangible and intangible assets owned, and what is owed
4
Debt and equity
Money the business has borrowed and needs to pay back, and stocks sold
Reporting these metrics is one thing, but a business needs to dive much deeper to be able to answer questions such as:
- What products or services produce the most profit for us?
- How might revenue streams be affected over time or seasonally, and what can we do about it?
- How are our costs affecting our profit margins?
- Are all costs essential to the business, and what value is each cost producing?
- What is our cash flow, and how could we improve it?
- Will we hit our growth targets?
- What is our balance of debt versus equity?
What are financial key performance indicators?
Financial key performance indicators (KPIs) go further in monitoring the health of an organisation and whether it is on track to meet its short- and long-term targets. They will measure profits, revenue and expenses, and what they indicate about the firm’s liquidity, solvency, profitability, valuation and operating efficiency.
These KPIs will include metrics such as gross and net profit margins, working capital, sales growth rate and current ratio. They will be ascertained from financial statement analysis, with the main statements generally used being:
- Income statement
- Cash flow report
- Balance sheet
- Statement of shareholders’ equity
TOP TIPS
Five tips for data storytelling
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Telling a story with your numbers
Think about the ‘why’ behind your data, what the financial metrics tell you, and how they will enable better decision-making for you and the wider business
Words Sophie Cross