Variance analysis is a powerful tool used in financial management and control to assess and understand the differences between planned and actual results. This abstract explores the concept of variance analysis, its purpose, and its application in evaluating performance, identifying areas of improvement, and facilitating decision-making. It highlights the key steps involved in conducting variance analysis, including setting standards, calculating variances, and interpreting the results. Additionally, it discusses the importance of variance analysis in budgeting, cost management, and strategic planning. Variance analysis involves comparing actual results against predetermined standards or budgets to determine the reasons for deviations. It enables organizations to identify the factors that contribute to favorable or unfavorable outcomes, allowing for timely corrective actions and performance improvement. Variance analysis is commonly applied to financial metrics such as revenues, costs, profits, and operational indicators.
Associate Professor, Master In Business Administration (General Management), Presidency University, Bangalore, India,
Email Id:- Pramodkumar@Presidencyuniversity.In
