Financial analysis is the evaluation of an investment option. It assesses its expected financial viability, stability, and benefits. It also takes into account the total cost of a change as well as the total costs and benefits of using and supporting a solution.

Financial analysis deals with uncertainty. As a change initiative progresses through its life cycle, the effects of uncertainties are better understood.

Why use financial analysis?

  • Allows executive decision makers to objectively compare very different investments from different perspectives. This is usually done by combining various analysis techniques.
  • Helps stating if assumptions and estimates, as well as financial calculations, may be challenged or approved. These assumptions and estimates are built into the benefits and costs.
  • Pinpoints and analyses factors influencing an investment. This reduces the uncertainty of a change or solution.
  • If the context, business need, or stakeholder require change during a change initiative, it allows the business analyst to objectively re-evaluate the recommended solution.

  • Some costs and benefits are difficult to quantify financially.
  • Because financial analysis is forward looking, there will always be some uncertainty about expected costs and benefits.
  • Positive financial numbers may give a false sense of security

  • How to conduct a financial analysis​

    Read more by subscribing to the BA Toolkit 

    On top of the brief description of the method, access to:

    • an explanation of when and how to use it,
    • a practical example,
    • tips and recommendations for use,
    • downloadable checklists and templates,
    • references for further reading,

    Table of contents

    Latest techniques


    Not yet a member?

    Plan de travail 1

    For you today

    our document on the 6 steps to do a SWOT analysis!

    Type in your information and get access to the document


    Well Done,
    You can access the pdf!

    Feel free to follow our link and learn more about the BA Toolkit.