Financial storytelling is the process of presenting data and information in a way that engages the audience and makes sense. It involves using advanced financial reporting tools and in-depth data to create an engaging story that explains the financial performance of a company. While companies have always looked toward the past to understand how they should improve, financial storytelling takes these stories to a new level. The goal of financial storytelling is to provide executives with a comprehensive view of the company’s performance over time.
To be effective, financial storytellers need to know how to connect with their target audience on an emotional level. Financial stories should help them overcome their fear of investing and motivate them to take action. They must explain risk tolerance, risk perception and recency bias and how these factors affect financial decisions. It is also critical to show how the market can be successful in the long term, even in the face of natural disasters and other uncertainties.
Revenue is the usual starting point for a financial story. It gives a sense of the size of the business and how it has changed over time. It is also important to understand the rate of change in revenue as this can tell us about how the business is doing. For example, a company’s revenue fell sharply from FY2014 to FY2015. It stabilised during FY2016 and FY2017 but reversed during FY2018. This was partly caused by a general decline in commodity prices, which meant that customers had put off capital expenditures.
