Should I learn Statistics as a Finance and FP&A Professional?

In short, yes.

What should you learn? I will leave a guide in the bottom of this article on how to get started.

Now the long version.

What is Statistics?

Statistics is just a method of describing problems using math

Before an algorithm can perform machine learning, it needs to be “trained”.

This training entails using a subset of the data and create patterns and improve the algorithm so it can predict the results for the rest of the data set.

Think about being a soccer coach and use some training techniques with 5 of your players. If the those techniques worked, then you use them in the rest of the team.

How can Statistics be applied in Corporate Finance and FP&A?

In summary, these are three practical ways of using statistics to improve EBITDA of a company.

1. Identify cost drivers and areas of inefficiency in a company’s operations: For example, regression analysis can be used to identify the relationship between different inputs (e.g. labor, materials, energy) and costs, allowing the company to focus on the most significant cost drivers. Another technique is…