Financial analyses and stress tests

Financial analysis: What is the organisation’s financial position, and how do various decisions or shocks affect it?

Accounting profit is not the same as cash in a bank account. Revenue growth does not necessarily equate to value growth. Low average costs may mask an unprofitable product, whilst a balanced annual budget may prove vulnerable to late payments, higher prices or weaker demand. Financial results only become useful for management when you understand what they are made up of, which factors influence them, and what would happen if there were a deviation from the plan.

SOLISFERADOME ANALYTICS carries out financial analyses for companies, public institutions, institutional and professional investors, and organisations. The service focuses on management financial analysis and the use of management and analytical accounting information to assess revenue, expenditure, margins, cash flows, liquidity, working capital, budgets, variances and financial scenarios.

This service does not involve the analysis of stock markets or financial instruments. It does not value shares, bonds, derivatives, investment portfolios or trading strategies. We use quantitative calculations where necessary for management accounting, but we do not provide ‘quant finance’, algorithmic trading or regulated banking stress tests.

The aim is to establish what the available financial data reveals, how reliable this conclusion is, which costs and operational factors drive the results, what adverse conditions the organisation can withstand, and what management actions should be prepared in advance.

What is financial analysis within the scope of this service?

Financial analysis is a systematic examination of an organisation’s financial position, results and cash flows in relation to a specific management issue. Sources may include financial statements, trial balances, management reports, budgets, sales and cost data, receivables, payables, stock levels, capacity and other relevant operational indicators.

The analysis may examine profitability, liquidity, cost structure, efficiency of resource utilisation, working capital, cash cycle, budget performance, deviations from plan, ability to meet current liabilities and sensitivity to changes in the internal or external environment.

Simply calculating ratios is not sufficient in itself. The same indicator may have different meanings depending on accounting policy, seasonality, the business model, the stage of development, the industry environment and the purpose of the decision. Therefore, each key indicator is defined by a formula, source, period, unit of measurement and limits of interpretation.

What is management accounting?

Management accounting transforms financial and operational data into internal information for planning, control and decision-making. It is not limited to what must be reported by law, but examines how the organisation creates, utilises and loses value.

In this context, budgets and their implementation, fixed and variable costs, contribution margin, cost price, cost and profit centres, capacity utilisation, variances between planned and actual figures, the profitability of products, services, projects or organisational units, and the financial implications of management alternatives.

Management analysis does not replace the keeping of accounts. It uses accounting information for a different purpose: to show what the figures mean for a specific decision and what actions can be justified on that basis.

What is analytical accounting?

Analytical accounting breaks down aggregated accounting figures according to economically significant criteria. Depending on the business, these may include a product, service, project, contract, site, region, customer segment, process, machine, cost centre, profit centre or source of funding.

For example, total labour costs do not automatically show which products or services generate them. Total revenue does not show which segment generates a positive contribution after direct and relevant indirect costs. The analytical framework links values to cost drivers and cost factors, so that management can see not only the overall result but also its origin.

The allocation of overheads always involves a methodological choice. Where there is no demonstrable cause-and-effect relationship, we do not present a provisional allocation as an objective fact. We specify the chosen allocation key, its rationale and how an alternative key would alter the conclusion.

What is a management stress test?

A management stress test is a hypothetical assessment of how an organisation’s financial position would change under an adverse but clearly defined set of assumptions. It may examine a decline in sales or budgeted revenue, an increase in the cost of materials, energy and labour costs, longer collection periods for receivables, higher borrowing costs, a build-up of stock, the loss of a key contract, a capacity shortfall, or the simultaneous occurrence of several factors.

The result may show the impact on revenue, margins, operating profit, cash flow, minimum cash balance, working capital requirements, budget deficit or stock levels relative to a critical threshold. Where applicable, the threshold at which the organisation must take a pre-agreed action is also determined.

A stress scenario is not a forecast that an adverse event will necessarily occur, nor does it determine its probability. It answers the hypothetical question: ‘If these circumstances were to occur simultaneously, what would the financial consequences be and what buffer do we have to respond?’

What is the difference between sensitivity analysis, a scenario and a stress test?

Sensitivity analysis varies one factor whilst holding the others constant, to show which factor has the greatest influence on the outcome. For example, one might examine how a change in the selling price alone affects the margin.

Scenario analysis combines several mutually consistent assumptions. In a scenario of weaker demand, for example, sales volume, capacity utilisation, the collection period for receivables and some of the variable costs may all change simultaneously.

A stress test employs a sufficiently adverse scenario to assess resilience, critical thresholds and possible management responses. The severity of the scenario must be justified in light of historical data, contractual relationships, the operational environment or an explicitly defined management hypothesis. An arbitrarily extreme scenario produces dramatic figures, but not necessarily useful insights.

What does the service include?

Analysis of revenue, profitability and margins

We examine how revenue is generated and what contribution remains after direct and relevant costs. Depending on the available data, the analysis can be broken down by product, service, project, contract, site, region, channel or organisational unit. We distinguish between revenue growth and margin growth and check whether higher volumes actually create additional value.

Analysis of costs and cost price

We examine the structure of fixed and variable costs, direct and indirect costs, cost drivers, capacity utilisation and the chosen allocation rules. Where the data permits, it is possible to determine unit cost, contribution margin, break-even point and the effect of a change in the product or service mix.

Liquidity and Working Capital Analysis

We examine the relationship between the accounting profit and cash flow. The analysis may include collection periods for receivables and payment periods for payables, inventory turnover, the cash cycle, minimum required liquidity, and periods during which a positive annual result does not prevent a temporary cash shortfall.

Budgeting, monitoring and variance analysis

We compare the plan with actual performance, using consistent definitions and time periods. The variance is broken down, based on the available data, into effects arising from price, volume, product mix, efficiency, timing, capacity or other controllable or external factors. In this way, the question is no longer ‘why the budget has not been met’, but is transformed into verifiable causes and specific responsibilities.

Management Scenarios and Critical Thresholds

We develop a base-case, adverse and, where necessary, a more severe scenario with explicit input values. We examine under which combinations of revenue, expenditure, working capital and financing a shortfall, loss or other predefined critical condition arises. Thresholds for monitoring and early-warning actions can be added to the results.

Analysis of public budgets and expenditure on activities

For public institutions, the analysis may examine budget implementation, the cost of a service or activity, resource utilisation, deviations by programme and economic components, the financial impact of increased demand for a public service, delayed funding or an increase in core expenditure. The analysis supports management and accountability but does not replace legally established budgetary, audit and control procedures.

What does the service expressly not include?

The service does not include quantitative analysis of financial markets, the valuation or forecasting of shares, bonds, crypto-assets, derivatives and other financial instruments, investment portfolio optimisation, Value at Risk, Conditional Value at Risk, option pricing, high-frequency or algorithmic trading, technical buy and sell signals, financial market trading models or recommendations for transactions involving financial instruments.

The management stress test is not a supervisory or regulatory stress test for a bank, insurer, pension fund or investment intermediary, and does not assess regulatory capital adequacy. It does not replace the methodologies and procedures of the Bulgarian National Bank, the ECB, the European Banking Authority, the Financial Supervision Commission or any other competent authority.

The service does not constitute an independent financial audit, review or other assurance engagement; an accountancy service; the preparation or certification of financial statements; tax, legal or investment advice; a credit rating; an actuarial valuation; a forensic investigation; a business valuation or a guarantee of future financial performance. If a specific decision requires such expertise, the client should engage the relevant qualified professional.

Who is this service intended for?

Public institutions

For ministries, agencies, local authorities, public enterprises and other institutional clients, the analysis can support budgetary control, the assessment of costs for an activity or service, the comparison of financial scenarios, resource planning and a preliminary assessment of the financial sustainability of a management measure.

Companies and industry

For manufacturing, commercial, technology and other enterprises, the service supports the analysis of cost price, margins, liquidity, working capital, budget variances, the profitability of products and business units, capacity utilisation and preparation for adverse changes in revenue and expenditure.

Institutional and professional investors and organisations

For institutional and professional clients, the analysis may examine the operational and financial condition of an enterprise, project or organisation based on financial statements and management data, including as a limited management and financial component of a broader audit. The service does not include a valuation of a financial instrument, a recommendation regarding a transaction or investment portfolio management.

The service is intended for organisations and professional clients. It is not offered as a retail service to individuals acting outside their commercial or professional capacity.

When might the service be required?

Analysis is required when a management decision depends on financial figures that cannot be reliably derived solely from total turnover, profit or cash holdings at a single point in time. This occurs in the event of rapid growth, pressure on margins, temporary or persistent liquidity shortages, significant budget variances, unclear cost of goods sold, build-up of stock and receivables, loss of a contract, price changes, reorganisation, new capacity or the need to reduce costs.

The service is particularly useful prior to a decision that is difficult to reverse or that may result in a long-term fixed cost. Preliminary analysis does not eliminate risk, but it can show what financial buffer is available, which assumptions are critical, and at what deviation the initial decision should be reviewed.

What decisions can the analysis support?

Financial analysis can support decisions regarding pricing, a combination of products and services, a budget, a spending limit, capacity utilisation, receivables and stock policies, payment terms, phased expenditure, internal resource allocation, business restructuring or a choice between management alternatives.

In the case of capital expenditure, the analysis can assess its compatibility with the budget and cash flow, but does not replace a separate evaluation of the investment or the enterprise where such an evaluation is required. In the case of a public institution, it can compare the financial implications of different options for a measure, but does not independently determine its legal admissibility, social justice or political priority.

The analysis does not make the decision on behalf of the commissioning authority. It highlights the financial implications, assumptions, constraints and the cost of error.

What data is required?

Firstly, you need a specific management issue, an organisation or activity to be analysed, a time period, a currency, the desired level of detail, a time horizon and a decision criterion. ‘Carry out a financial analysis’ is a general topic; ‘Can the organisation withstand a 15 per cent fall in revenue and a 20-day extension in the collection period without additional funding?’ is a testable question.

Typical financial sources may include annual and interim financial statements, trial balances, general ledger extracts or management reports, the chart of accounts, budgets, forecasts and reports on their implementation. The level of detail required depends on the question; full access to the accounting system is not automatically assumed.

For cost accounting, data may be required by product, service, project, contract, site, cost centre, customer segment or other unit, as well as defined rules for the allocation of overheads. Operational data may include quantities, working hours, capacity utilisation, productivity, scrap, stock, orders, contract deadlines, and receivables and payables by due date.

A stress test requires a baseline scenario or reference state, defined adverse factors, a reasonable magnitude of change, a time horizon and a critical indicator. Where there is no reliable basis for the magnitude of the shock, it is set as a management assumption rather than an empirically proven probability.

The data must be comparable in terms of period, currency, accounting basis, organisational scope and definition. Significant reclassifications, one-off events, related-party transactions, changes in accounting policy and missing values are disclosed to the extent that they are known and relevant. We do not request personal or other protected data that is not necessary for the matter at hand; in the case of sensitive information, the scope, secure channel and access regime are determined in advance.

How do we work?

1. We define the decision and the scope of the analysis

We clarify who is making the decision, which organisation, activity or project is being analysed, what the time period is, which alternatives are realistic, and what will be considered an acceptable outcome. Without this framework, financial indicators may be calculated correctly but be of no managerial relevance.

2. We verify the origin and comparability of the data

We reconcile key figures between the reports and statements provided, check the time periods, currency, signs, definitions and organisational scope, and document any discrepancies found. This is not an audit and does not provide assurance regarding the financial statements, but it reduces the risk of the analysis being based on data that is clearly incompatible.

3. We establish the analytical framework

We identify the products, services, projects, units, centres of responsibility and cost drivers relevant to the decision. We distinguish between directly observed figures and calculated allocations, and document the rules by which overheads are allocated to individual cost centres.

4. We determine the baseline financial position

We calculate the agreed key performance indicators using standard definitions and comparable periods. We examine trends, structure, deviations and the relationship between profit, cash flow and working capital. Non-standardised indicators such as EBITDA or ‘adjusted profit’ are used only with an explicit formula and a link to the source data.

5. We formulate scenarios and critical thresholds

We define base-case and adverse scenarios without assigning probabilities that the data cannot substantiate. We examine the combined effect and determine when a pre-selected threshold is breached, such as minimum cash holdings, maximum permissible deficit, target margin or another management indicator.

6. We compare possible responses

We examine how different actions alter the outcome: phased expenditure, changes to price or volume, restricting certain costs, altering deadlines, freeing up working capital, spare capacity or any other realistically feasible option. Each response is assessed in terms of its costs, constraints and secondary consequences.

7. We document the results and the rules for updating

We present the sources, formulas, assumptions, constraints, scenarios, critical thresholds and recommended actions. We determine which indicators should be monitored and at what point the analysis needs to be updated.

Why are profit, cash flow and liquidity not the same thing?

Profit measures the accounting result for a period in accordance with the applicable accounting framework. It may include revenue that has not yet been collected and expenses that do not coincide in time with payment. Cash flow shows the actual movement of funds during the period, whilst liquidity refers to an organisation’s ability to meet its obligations on time.

Consequently, a business may report a profit whilst simultaneously experiencing a cash shortfall due to slow collection of receivables, rapid build-up of stock, advance payments, maturing liabilities or investment expenditure. The reverse is also possible: a positive current balance may temporarily mask unprofitable operations or impending payments.

Professional analysis does not treat these concepts as interchangeable and does not derive sustainability from a single indicator alone.

What does a management stress scenario look like?

For a manufacturing company, the scenario might combine lower order volumes, higher raw material and energy prices, lower capacity utilisation and slower collection of receivables. The analysis tracks the impact on unit cost, contribution margin, operating profit, stock levels and cash holdings.

For a commercial or service organisation, the scenario may include a decline in sales, a change in the product mix, lower utilisation, an increase in remuneration and delays in payments from customers. For a public institution, factors such as higher demand for a service, an increase in unit costs, delayed funding and budgetary constraints may be examined.

These examples are illustrative. The actual scenario is determined by the organisation’s activities, contracts, available data and the decision that needs to be supported.

What insights does financial analysis provide?

Descriptive insights

It identifies what has been reported and how it has changed: revenue, expenditure, assets, liabilities, cash flows, margins and budget variances. It describes what has been observed, but does not in itself prove why it has occurred.

Diagnostic knowledge

It breaks down the overall result into economically significant components and shows which products, activities, units, periods or factors are associated with the deviation. This pinpoints the problem, but the causal conclusion remains limited by the structure and quality of the data.

Conditional knowledge

The stress test determines what outcome follows from certain assumptions: if revenue falls, costs rise or collection rates slow by a specific amount, then the model calculates the corresponding financial impact. The validity of the conclusion is conditional upon the accuracy of the input data, the formulas and the specified scenario.

Causal knowledge

Accounting correspondence or a coefficient does not prove causality. A causal conclusion is justified only when there is a logically and empirically defensible link between a resource, an activity and a result, and when plausible alternative explanations have been considered. Where this condition is not met, we are talking about a correlation, a dependency or a management hypothesis, rather than a proven cause.

Policy conclusion

The recommendation on what should be done does not automatically follow from the figures. It depends on the objective, the acceptable level of risk, legal and contractual constraints, available resources and the implications for stakeholders. The analysis makes these criteria explicit so that the recommendation is traceable, rather than being presented as an inevitable result of the table.

Financial analysis provides a better basis for decision-making, but does not turn the future into an established fact. A stress test illustrates the consequences under a given scenario; it does not prove that the scenario will occur, nor do we determine the probability of its occurrence within the scope of this service.

Advantages of financial analysis and management stress tests

Analysis can link the accounting result to the actual sources of revenue and expenditure, highlight the difference between profit and available liquidity, identify economically significant deviations, make hidden assumptions visible, and test decisions before the organisation bears the full cost of a mistake.

Scenario analysis enables management to prepare thresholds and actions in advance, whilst decisions are not yet under pressure from an unfolding crisis. Analytical accounting can reduce the risk of a profitable activity subsidising an inefficient one, without this being apparent in the overall result.

The greatest advantage is not the greater number of indicators, but the clearer link between data, decisions and consequences.

Limitations and potential drawbacks

The quality of the analysis cannot exceed the quality and level of detail of the input data. Incorrectly classified transactions, incomparable periods, incomplete allocations, changes in accounting policy, missing due dates or overly generalised reports can significantly limit the conclusions that can be drawn.

Accounting information is predominantly historical and depends on the rules applied for recognition, measurement and presentation. The allocation of overheads may alter the profitability of an individual product or unit without changing the organisation’s overall result. Therefore, the chosen method should not be presented as the only possible one.

A stress test depends on the scenario chosen. A scenario that is too weak creates a false sense of security, whilst one that is arbitrarily extreme may lead to economically unjustified caution. The test does not automatically cover unknown events, behavioural reactions, legal constraints, disruption to key infrastructure or all secondary effects.

More detail does not always mean a better analysis. Excessive complexity increases data and maintenance costs and may make verification difficult. We use the simplest structure that is sufficient for the specific decision and allows the result to be traced back to its source.

Is financial analysis or a stress test mandatory?

There is no universal rule making this specific management and analytical service mandatory for every company, organisation or public institution. An analysis may be required by a specific regulatory regime, a contract, a creditor, an owner, a funding programme, a public procurement contract, internal rules, a financial management and control system, or a decision by a competent authority.

Obligations relating to accounting, financial statements, independent financial audits, budgetary control or regulatory stress tests constitute separate legal regimes. This analysis does not fulfil or replace them, unless a specific product is expressly permitted and accepted for the relevant purpose by the competent recipient.

Even where it is not formally mandatory, the analysis may be practically necessary if the forthcoming decision involves a significant resource, creates a long-term fixed cost, depends on sensitive assumptions, or may jeopardise liquidity and business continuity.

What does the client receive?

The final deliverable is specified in the individual engagement terms. It typically includes an executive summary, a formulated analytical question, a description and assessment of the data, an analytical framework, definitions and formulas for the indicators used, and an analysis of revenue, costs, margins, liquidity, working capital and budget variances, in accordance with the agreed scope.

Where a management stress test is included, the deliverable contains a baseline scenario, scenario assumptions, the calculated financial impact, critical thresholds, a sensitivity analysis, possible management responses, constraints and indicators for follow-up monitoring.

Market assumptions, demand forecasts, macroeconomic indicators and other external factors may be used as inputs in the financial scenarios. Their use does not automatically constitute a standalone sectoral or market analysis or an econometric forecast. Where the reliability of the financial conclusion depends on a specialised market assessment or a standalone forecasting model, this component is defined separately within the scope of the project.

The results may be delivered as an analytical report, a working model in an agreed tabular format, charts, a dashboard, a presentation or a technical appendix.

How long does it take?

The timeframe depends on the number of companies, business units, products or projects analysed; the availability and comparability of the data; the need to build an analytical framework; the number of periods, indicators and scenarios; and the requirements for documentation, visualisation and presentation.

A preliminary assessment of the scope and readiness of the data can take between 5 and 10 working days. A focused financial analysis of a single organisation or activity, covering key indicators, costs, margins, liquidity and budget variances, typically requires between 15 and 25 working days. A project with a detailed analytical structure, multiple units or products, the reconstruction of incompatible data, several interlinked scenarios and a management dashboard may require between 30 and 50 or more working days.

These are guidelines, not automatically applicable deadlines. The specific timetable is determined following clarification of the requirements and a review of sample data, and commences upon acceptance of the quotation and provision of sufficient information. Delays in closing the accounts, changes to the scope or incomplete data may necessitate an adjustment to the timeframe.

When is the analysis complete?

The analysis is complete not when the maximum number of coefficients has been calculated, but when the agreed-upon question has received a traceable answer; the key values have been compared; the indicators, distributions and scenarios have been defined; the constraints and uncertainties have been specified; and the result can be linked to a specific decision, a critical threshold or a rule of action.

The analysis has a reference date. After this date, new reports, changes in prices, contracts, capacity, accounting policies or external conditions may alter the conclusion. Therefore, actual developments should be compared with the baseline scenario, and the model should be updated in the event of a significant deviation.

Do not start by asking ‘what figures will we get?’. Start with the decision, the financial risk, the critical deadline and the data you actually have available.

Frequently Asked Questions

What is financial analysis in plain language?

It transforms accounting and management data into an answer to a specific question: where does the result come from, which costs and activities affect it, is there sufficient liquidity, and what would happen if there were a deviation from the plan. The analysis is not simply a table of ratios, but a link between data, decisions and consequences.

What is the difference between accounting services and financial analysis?

Accounting services include day-to-day bookkeeping, accounting entries, closing the books and fulfilling applicable reporting and tax obligations. Financial analysis uses existing accounting and operational data to assess profitability, costs, liquidity, variances and management scenarios. SOLISFERADOME ANALYTICS provides the latter, rather than day-to-day accounting services.

What is the difference between financial and management accounting?

Financial accounting focuses on regulated reporting and financial statements for specific external and internal users. Management accounting is geared towards internal decision-making and can structure data by product, project, unit, process or other management object. It also utilises operational information that is not necessarily included in the financial statements.

What is analytical accounting?

It involves breaking down aggregate accounting figures according to economically significant criteria, such as product, service, project, contract, asset or cost centre. The aim is to identify where revenue and costs arise and which entity actually contributes to the overall result.

What is a management stress test?

It is a scenario-based assessment of how the financial position would change under adverse assumptions, such as lower revenue, higher costs and slower collection of receivables. The test shows the effect on margins, cash flow, liquidity, the budget or another agreed indicator, and can identify a critical threshold for action.

Is a stress test a forecast?

No. A forecast assesses likely future developments using an appropriate method and available information. A stress test sets a condition and calculates the consequences should it occur. An adverse scenario may be plausible and useful for preparation, without necessarily being the most likely scenario.

Do you carry out quantitative analysis?

Not in the sense of quantitative finance and capital markets. We do not model the prices of financial instruments, portfolios, derivatives or algorithmic strategies, nor do we provide trading signals. We use transparent quantitative calculations only to the extent necessary for management and analytical accounting, budgeting, costs, margins, liquidity and organisational scenarios.

Is this a banking or regulatory stress test?

No. The service does not assess regulatory capital adequacy and does not replace a supervisory test for a bank, insurer, pension fund or investment intermediary. It is an internal management analysis of a business, organisation, project or public activity.

What changes can be tested?

Depending on the activity, the following may be varied: revenue, sales volumes, prices, product mix, raw materials, energy, labour, logistics, capacity utilisation, collection and payment terms, stock levels, cost of finance, budgetary resources or demand for a public service. Only factors that are relevant and can be formulated with sufficient clarity are selected.

Can the analysis assess liquidity?

Yes, provided there is sufficient data on cash flows, maturities, receivables, payables, inventories and scheduled payments. The analysis can identify periods of shortfall and sensitivity to delayed collections, but it does not guarantee that unforeseen liquidity risk will not arise.

Can the break-even point be calculated?

Yes, when fixed and variable costs can be distinguished with sufficient reliability and the price and contribution margin are known. With multiple products, the result depends on the product mix; therefore, a single break-even point may be misleading without further assumptions.

Can we determine which product, customer or project is profitable?

Yes, if the revenue and relevant costs can be allocated to the selected object. For overheads, there must be a sound allocation key. The analysis distinguishes between directly observable profitability and a result that depends significantly on imputed allocation.

How do you analyse the variance between budget and actual?

Firstly, consistent definitions, periods and organisational scope are ensured. The variance is then broken down, based on the available data, into effects arising from price, quantity, product mix, efficiency, capacity, lead time or other factors. In this way, the overall difference is broken down into specific and verifiable management explanations.

Is the service suitable for public institutions?

Yes. It can support budgetary control, analysis of expenditure on activities or public services, assessment of resource adequacy and financial scenarios. The analysis does not replace the powers and procedures of the internal audit department, the National Audit Office, the State Financial Inspection Agency or any other competent supervisory body.

What data must the client provide?

The data required depends on the issue at hand. Financial statements, trial balances or management reports, budgets, data on revenue and expenditure, receivables, payables, stocks, quantities and analytical indicators are typically used. Prior to submission, the minimum required scope, format and secure channel are specified.

Is full access to the accounting system required?

Not necessarily. In many cases, agreed extracts and reports are sufficient. For a detailed analysis of cost of goods sold, cost centres or due dates, a higher level of analytical detail may be required, but access is limited to the relevant data and does not imply the right to amend accounting records.

Can the analysis be carried out using only publicly available financial statements?

A limited external analysis can be carried out, but it does not usually allow for a reliable allocation by product, project and cost centre, a detailed analysis of maturities or a specific management stress test. This limitation is explicitly stated and is not offset by any apparent accuracy.

How many historical periods are required?

There is no universal minimum. A single closed period may be sufficient for a snapshot of the structure, but comparable data across multiple periods are required to identify trends, seasonality and stability. For monthly analysis, at least 24–36 months are often useful if the business is seasonal, but the number of observations cannot compensate for incomparable or incorrectly classified data.

Do you check the accuracy of the accounting data?

We carry out analytical checks for comparability, logical inconsistencies and relationships between the reports provided, to the extent necessary for the analysis. This is not an independent financial audit or review and does not constitute an expression of assurance regarding the reliability of the financial statements.

Do you use artificial intelligence?

Yes, where appropriate for structuring, comparing, detecting discrepancies, documenting or visualising. Key decisions regarding data, definitions, allocations, scenarios and interpretation remain under the control of human experts. Sensitive data is not entered into an unsuitable environment, and generated results are not accepted without verification.

Is financial analysis an audit?

No. Audits and other assurance engagements have distinct objectives, standards, procedures and competence requirements. Financial analysis supports management decision-making and does not contain an auditor’s opinion or assurance regarding the absence of material misstatements, fraud or irregularities.

Is financial analysis mandatory?

Not as a universal service for every organisation. It may be required by a specific regulatory regime, a contract, an owner, a creditor, a procedure, a funding body or an internal rule. Statutory obligations relating to accounting, reporting, auditing, budgetary control or regulatory stress testing are separate and are not automatically fulfilled by this service.

What exactly does the client receive?

The deliverable typically includes an executive summary, an analysis of the agreed financial areas, definitions and formulas for the indicators, data sources and quality, scenarios, critical thresholds, limitations and recommended actions. The format may be a report, a spreadsheet, charts, a dashboard or a presentation, depending on the individual quotation.

How long does the analysis take?

Assessing the scope and data typically takes 5–10 working days. A focused analysis may take 15–25 working days, whilst a project with a detailed analytical structure, multiple components and interlinked scenarios may take 30–50 working days or more. T

The timeframe indicated is approximate and begins once the necessary input data has been received. Where information is obtained from external sources or under the Access to Public Information Act, or where data is incomplete or contradictory, the timeframe may be extended.

How much do the financial analysis and stress test cost?

The price is determined on a case-by-case basis depending on the number of organisations, periods, units, products or projects, the quality of the data, the required breakdowns, the number of scenarios, the format of the results, the visualisation and subsequent updates. Following an initial consultation, the client receives a quotation specifying the scope, deliverables, timetable and price.

How is confidential information protected?

Before any exchange of sensitive data takes place, the contractual arrangements, the minimum necessary volume, authorised access, the secure channel, the retention period and the rules for return or deletion are defined. The client should not send sensitive accounting data, trade secrets or protected personal data via ordinary email without first agreeing on a suitable channel.

Does the analysis guarantee a profit or financial stability?

No. The result depends on the data provided, the assumptions, the accounting classifications and actual future developments. The analysis can improve the basis for decision-making and highlight sensitivities and critical thresholds, but it does not eliminate risk nor does it guarantee profit, liquidity, financing or business continuity.

How often should the analysis be updated?

The frequency depends on the purpose and dynamics of the business. Budget and liquidity analysis may require monthly or quarterly updates, whilst a structural analysis of costs may need to be reviewed in the event of changes to prices, technologies, capacity, accounting policies or product mix. The indicators that trigger an update are determined in advance.

How does the commissioning process begin?

The first step is a brief description of the analytical question, the organisation, business activity or project to be examined, the forthcoming management decision or action, the period under review, the key financial risk, the timeframe and the available accounting, management and operational data. SOLISFERADOME ANALYTICS then assesses the feasibility, the required level of analytical detail, the applicable indicators and scenarios, the expected outcome, the timetable and the bespoke price.