Variance analysis

• What is variance analysis ?

  The difference between your actual figures and the budget that was set down
• What are the two types that variances can be ?

  Positive - when a business is doing better than expected

  Negative - when a business is doing worse than expected
• What can variance analysis help a business to see ?

  What occurs in the business and the internal and external factors
• How to calculate variance?

  Actual figure - budgeted figure
• What are the two ways variance can be caused by?

  Internal factors - changes within the business which could be like changing prices , recruiting new staff

  
  

  External factors - changes from outside the business which could be things like changes in the economy , consumer demand