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FP&A Presentation Tips: Making Your Data Make Sense

  • By Randall Bolten
  • Published: 3/30/2016

bigdataboltenBig data, predictive analytics and data visualization are all ubiquitous buzzwords in today’s world of financial planning and analysis (FP&A). And all are immensely powerful tools for understanding a complex world and making better decisions. But they’re useless if your audience—not to mention you, the presenter—can’t make sense of the information they provide. All too often, I’ve seen thorough, imaginative analysis utterly fail to convince simply because the numbers weren’t communicated effectively.

In presenting numerical information, you face an immense number of choices. The ever-growing library of software tools only gives you more choices, and in every one of those seemingly small choices matter. To illustrate this, consider these examples of numbers presentation far removed from the financial statements and models we usually work with:

Exhibit 1 

 

 

Exhibit 2

 

 

 

 

 

 

 

 

Exhibit 3

 

 

 

 

 

 

 

A quick review will tell you that all three reports present exactly the same information. Exhibit 1 is an IRS form that virtually all American taxpayers have seen before. The table in Exhibit 2 is derived solely from the numbers in Exhibit 1, and Exhibit 3 is simply a graph of the numbers in the “effective tax rate” column of Exhibit 2. All are clear, effective, and generally excellent examples of numbers presentation; what accounts for the radical difference in their appearances is the purpose for which each of these reports was designed:

  • Exhibit 1 speaks to one single taxpayer who knows exactly what his/her taxable income was, and who simply wants to know exactly what his/her tax bill will be. It’s useless for almost any other purpose, but—as much as it pains me to heap praise on the IRS—it serves that single purpose in a straightforward and effective way.
  • Exhibit 2 won’t easily help you calculate your exact tax bill, but it shows clearly how tax liability changes over a wide range of possible incomes. It also introduces an additional metric—effective tax rate (i.e., income tax ÷ taxable income)—that is more meaningful to many taxpayers than the marginal tax rate is.
  • Though Exhibit 3 may be difficult to read with real precision—that’s typical with graphical presentations—it provides a clear visual sense of how progressive the U.S. federal income tax structure is.

These three wildly different presentations of exactly the same information show us why good, old-fashioned communication skills are becoming increasingly valuable. In fact, the more massive and complex the data you’re analyzing, the more important it is to be able to make sense of it. As you prepare your presentation—whether it’s a high-stakes oral presentation, a position paper, a memo, or simply an Excel report you’re emailing to your colleagues, ask yourself these questions:

  • Have you laid out the information in a way that your audience can use it for its intended purpose? (Yes, there is a reason why you’re presenting this information!)
  • Are you presenting the appropriate level of detail? Too little means unsupported conclusions; and too much can cause your audience to fail to grasp the important stuff, or not even bother to try.
  • Does your report look good? An attractive, thoughtfully laid-out report is easier to read and understand, invites your audience to actually study it, and enhances your credibility as a professional.
  • Do you make effective use of ratios and other metrics that add meaning and context to the raw numbers?
  • Have you avoided obvious errors, spelling mistakes, and other flaws? These errors don’t change the meaning of your work, but do damage your credibility as a professional.
  • Do you use appropriate language and terminology, considering your audience’s level of understanding of the underlying subject matter?

Most of us know to ask ourselves these questions when we write and when we speak. If you ask them when you’re presenting numbers, not only will your reports be more effective, you will be perceived as a true professional.

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