Financial planning & analysis (FP&A) refers to the budgeting, forecasting, and analysis of financial data that inform a business’s decision-making. It also helps companies determine their present financial status and plan for the coming years. Therefore, if anyone else asks “what is financial planning and analysis?” It is a tool that helps a company Captured Growth in the Right Direction with the help of numbers and data.
This article should be everything you need to know about financial planning and analysis, from what it means to what career options exist. We will also help you out with how to do financial planning and analysis from an Indian student perspective. Tilting toward finance yet not knowing where to start, is a desire many students have today. If you are among those, then this article is for you. In addition, you will understand how corporate financial planning and analysis plays an important role in this area, the necessary education, and job prospects.
In India, financial planning, and analysis services are in huge demand. Companies need qualified people to lead them financially. Therefore, having FP&A skills is always in demand This article gets into all the details you need to understand this type of work or for financial planning and analysis jobs, whatever one you might be looking for.
Meaning and Definition of Financial Planning and Analysis
In understanding FP&A we need to understand what FP&A actually means. Financial, means anything related with money. It is managing things in the future, as planning means a road for future steps. The word analysis refers to trending state of data and understanding.
Therefore, any work related to financial planning and analysis is about using financial information to develop plans to review them and make good decisions. This save the company money, increase profit and grow faster. FP&A team plays an essential role in the companies. It collaborates with each department. It prepares budgets and tracks spending and predicts future earnings and reports to management. This enables leaders to act quickly whenever necessary.
Important Aspects of Financial Planning and Analysis
Budgeting
A money plan for the company for the next month, quarter or year.
Forecasting
Predicting what the numbers will be in the future based on current trends.
Reporting
Reporting expenditures and revenues with charts, tables, and other simple formats.
Variance Analysis
Finding the difference between what we planned and what the realised results are and explaining it.
FP&A Role in Companies
Financial planning is required by every business, regardless of size. A plan helps a company avoid overspending or losing growth opportunities. That’s why corporate financial planning and analysis is critical. It keeps everything in check.
- It improves decision-making.
- It facilitates long-term business objectives.
- It helps in risk management.
- It is an effective use of resources.
FP&A is the foot-long sandwich of Indian IT. Even startups are hiring FP&A professionals nowadays to stay competitive in the market.
Career in Finance Planning and Analysis
Financial planning and analysis jobs are not just narrow interest but are rather a good career. It is secure, can be very high-paying, and offers opportunities for advancement. Since finance is the foundation of every company, FP&A is a career that a lot of Indian students are opting for these days.
Job Roles in FP&A
- Financial Analyst: Produces reports and assists in planning.
- FP&A Manager: Responsible for the planning and analysis function.
- Finance Business Partner: Collaborates and advises business teams.
- Senior Financial Analyst: Provides strategic planning and complex models.
In each role, you are working with data and assisting a company in making better decisions. These jobs are available in every category such as IT, banking, FMCG, pharma, etc.
Skills Required for FP&A Jobs
Skilled you will need to build yourself in this field:
- Strong Excel knowledge
- Data analysis skills
- Budgeting and forecasting
- Familiarity with financial statements
- Business knowledge
- Interpersonal and public speaking skills
You can work with both Indian companies and multinational companies with these skills. Several FP&A professionals also take on leadership or CFO roles down the line.
Salary Scope
Entry-level analysts earn in the range of ₹4-6 lakhs per annum in India. The mid-level managers can earn ₹10-20 lakhs. At leading firms, seniors earn up to ₹35 lakhs a year. The salary accelerates rapidly with experience.
Educational Background for Corporate Financial Planning and Analysis
The base foundation for all the successful career is education. If you also want a career in corporate financial planning and analysis, then there are both degrees and courses that will greatly benefit you.
Basic Qualification
Begin with a commerce or finance background. A B.Com or BBA in finance, or even an economics degree is a plus. Then opt for PG courses or PG certifications.
Recommended Courses
- MBA in Finance
- Chartered Accountant (CA)
- CMA (Cost Management Accounting)
- Association of Chartered Certified Accountants (ACCA)
- Data source: Chartered Financial Analyst (CFA)
These degrees cover finance, accounting, and reporting—everything you need to know to get an FP&A job.
Certifications for Your Resume to Shine
If you’d like to be competitive, sprinkle in things like certifications:
- Financial Modelling Certification
- Excel Advanced Training — Microsoft Excel Advanced
- Power BI or Tableau (for data reporting)
- FP&A & AFP (Association for Financial Professionals))
How to do Financial Planning And Analysis
In real life, the students like to know how finance planning and analysis is done. Here’s an approach you can experiment with if you want to see the real work.
Step-by-Step FP&A Process
- Data Collection: Begin with financial statements, revenue, expenses, and market factors.
- Sample Income: Create a budget for a certain period of time.
- Forecast Future: Predict what could happen using past data and trends.
- Generate Reporting: Display summary and structure data in graphics.
- Review & Analyze: Confirm that actual numbers align with plan.
- Give Suggestions: Advise the company on where to cut costs or spend more results tracking, make sure that our financial goals are not missed.
That’s how financial planning & analysis services exist in real businesses. It is not only about numbers. It also has to do with people, decision-making and keeping the company afloat.
Tools Used in FP&A
Today, companies rely on software for improved FP&A. Some common tools include:
- Microsoft Excel
- SAP
- Oracle Financial Cloud
- Anaplan
- Power BI
- Tableau
These are the tools that will ensure you get solid financial planning and analysis jobs.
Tips to Get Better at FP&A
- Business news on top of the mind always.
- Practice real case studies.
- Master one tool at a time.
- Consult with mentors, or get involved in finance clubs.
- Internships offer practical hands-on experience.
Relevance to ACCA Syllabus
There is no denying that financial planning and analysis is a key component of ACCA papers such as Performance Management (PM), Strategic Business Leader (SBL) and Financial Management (FM). There are also papers that challenge skills such as budgeting, forecasting, cost control, and decision-making, which are all core FP&A skills.
Financial Planning and analysis ACCA Questions
Q1: How does budgeting format fit in financial planning?
A) To reduce taxation
B) In order to predict cash flow needs
C) To calculate depreciation
D) To prepare final accounts
Answer: B
Q2: How is actual performance compared to budget?
A) Cost ledger
B) Variance analysis
C) Trial balance
D) Bank reconciliation
Answer: B
Q3: What kind of budgeting is based on the zero-base in every period?
A) Incremental budgeting
B) Rolling budgeting
C) Zero-based budgeting
D) Activity-based budgeting
Answer: C
Q4: What is the most useful financial statement for short-term financial planning?
A) Profit and loss statement
B) Balance sheet
C) Cash flow forecast
D) Notes to the financial statements
Answer: C
Q5: The process of planning investments in major assets is referred to as ‘capital budgeting’ in financial planning?
A) Managing working capital
B) Investment Planning of Fixed Assets
C) Calculating gross profit
D) Recording capital gains
Answer: B
Relevance to US CMA SYLLABUS
In the US CMA Part 1, one of the most critical content focuses is on Financial Planning, Performance, and Analytics, which includes in-depth knowledge of budgeting, forecasting, variance analysis, and performance evaluation among many other components—all integral elements of financial planning and analytics.
Financial Planning and Analysis US CMA Questions
Q1: What is flexible budget and how does it help the management?
A) Reduce working hours
B) Activity based costs
C) Avoid external audits
D) Increase tax refund
Answer: B
Q2: What analysis describes the revenue / loss impact resulting from the volume variance?
A) Sensitivity analysis
B) Trend analysis
C) Variance analysis
D) Break-even analysis
Answer: A
Q3: Which statement most accurately describes a rolling forecast?
A) Use prior year’s budget
B) Are only used annually
C) Cross over the fiscal year
D) Only predict revenue
Answer: C
Q4: What do you want to achieve by using the scenario planning in FP&A?
A) Comply with tax law
B) Handle payroll errors
C) Assess risks under certain circumstances
D) Audit internal controls
Answer: C
Q5: Which of the following has the least prevalence in performance measurement in CMA Part 1?
A) Dividend payout ratio
B) Return on investment (ROI)
C) Asset revaluation
D) Capital leasing
Answer: B
Relevance to US CPA Syllabus
The BEC (Business Environment and Concepts) section encompasses budgeting, forecasting, risk analysis, and performance measurement—all components of financial planning and analysis. This equips US CPA candidates to provide financial analysis for business decisions.
Financial Planning and Analysis US CPA Questions
Q1: An essential outcome of financial planning is?
A) A file organized for auditing of your taxes
B) Obtaining a bank loan
C) A forecast on a cash flow basis
D) An extensive asset list for the company
Answer: C
Q2: Which parts of the CPA exam cover Financial Planning and Analysis?
A) AUD (Auditing and Attestation)
B) REG (Regulation)
C) FAR (Financial Accounting and Reporting)
D) BEC (Business Environment and Concepts)
Answer: D
Q3: Why is forecasting good for companies?
A) Filing annual tax returns
B) Early detection of financial risks
C) Reporting to the shareholders
D) The theft of inventory
Answer: B
Q4: What is the difference between static budgets and flexible budgets?
A) Audits use only static budgets
B) flexible budgets are prepared with actual activity levels
C) A static budget can be re-adjusted every month.
D) Focusing on the variable costs leaves the fixed costs out of the flexible budgets
Answer: B
Q5: What is the purpose of capital spending planning to a business?
A) In overseeing employee paychecks
B) By forecasting future movements in stock prices
C) For decision-making regarding long-term investments
D) Daily cash flow calculation
Answer: C
Relevance to CFA Syllabus
Cash flow forecasting, budgeting principles, and financial modeling are key parts of financial planning and analysis (FP&A) as it relates to, particularly for equity research and investment forecasting; this is more in the domain of CFA Level I and CFA Level II Financial Reporting and Analysis (FRA).
Financial Planning and Analysis CFA Questions
Q1: Which of these aids analysts in authoring financial projections?
A) Ethics code
B) Income tax law
C) Financial models
D) Minutes of the stockholder meeting
Answer: C
Q2: What is a sensitivity analysis in FP&A?
A) Employee satisfaction prediction
B) Calculate tax deductions
C) Assess how variations in inputs influence outputs
D) Check customer reviews
Answer: C
Q3: What is the key financial tool in forecasting free cash flows?
A) Income statement, common-size
B) Portfolio key contributor return
C) DCF — discounted cash flow model
D) EPS calculation
Answer: C
Q4: Scenario analysis is helpful in FP&A because it enables:
A) Comply with audit law
B) Predict behavior with altered assumptions
C) Get rid of financial statements
D) Reduce legal risks
Answer: B
Q5: What does the support of strategic decisions regarding finance?
A) Tax audit report
B) Revenue statement
C) Budgeting and forecasting
D) Balance sheet verification
Answer: C
