Presenting Financial Reports: Turning Numbers into Information

Often, when the financial types get up and present a business's financial status, it seems like the lights got turned out and everyone went home. Even though you listen intently, it seems like they're speaking some foreign language that nobody else understands. This happens more often than people like to admit. Read on to see how to (and how not to) report financial or other numerical data so that everyone understands what you just showed them.

Examining reporting pitfalls

Avoid the following pitfalls of reporting numbers and financial information and you'll be well ahead of the game when trying to turn numbers into information:

• Listing numbers as just that — long lists of numbers — and not in some graphical form that is quickly and easily understandable


• Not varying the graphics and visualization techniques to use the best method to transmit information


• Presenting the numbers in the language of the presenter and not in the (plain-English) language of the audience, including using financial jargon and undefined acronyms


• Using too many or too few colors so that the critical information gets lost in the background


• Throwing in data and information that isn't important to the point being conveyed to the audience


• Not knowing what you're really trying to communicate to the audience


• Not using stories or analogies to create a better understanding of the numbers (not always possible, but very effective if you can pull it off)

Most people are visual in nature; pictures and graphs go a lot further in gaining understanding, which leads to information and knowledge. Long lists of numbers are hard to visualize, interpret, and then apply critical thinking skills to. They are difficult, if not impossible, to use to determine trends, issues, and problems. So get visual and avoid the pitfalls.

Showing financial info simply

The best way to show financial information is to get graphical and use good visual presentation techniques. The most common forms for showing financial data are

• Line charts: Best for showing trends over time


• Bar charts: Best for showing comparisons


• Pie charts: Best for showing relative comparisons, such as percentages of total of the whole or size comparisons

Using colors to show different graphical elements of financial information is also a good way to show or highlight comparative information. Just remember that too many colors can be just as confusing as not using any at all. If you're stuck in a black-and-white world, using different grayscale shading or graphic textures can go a long way to helping you show information. And don't forget to add a legend where it's appropriate!

Don't try to shove too much information into any one chart. Your charts have to be easy to understand at a quick glance. If in doubt, get someone to do the quick glance test — show it to someone who hasn't seen the chart before and ask her to tell you what the chart says. If she gets it wrong, you have some more work to do.

dummies

Source:http://www.dummies.com/how-to/content/presenting-financial-reports-turning-numbers-into-.html