In today’s fast-moving market environment, financial data serves as the pillar upon which critical business decisions are made for corporate strategists and investors alike. It forms the basis for portfolio allocations, M&A pursuits, capital allocation decisions, market expansion, determining valuations, and more.
The costs of inaccurate financial data are considerable and can have a ripple effect across everything from strategic decision-making to regulatory compliance. To remain competitive, firms need to safeguard against exposures and risks that are difficult to overcome in the long term.
Accurate, vetted financial data is crucial to guide strategic decision making, maintain investor confidence, and enable firms to act upon lucrative deals and opportunities with grounded vision and confidence.
Strategic Decisions that Miss the Mark
One of the most insidious hidden costs of inaccurate financial data is its impact on strategic decision-making. Whether a company is considering bringing a new product to market, determining capital allocations, or evaluating liquidity, inaccurate financial data on competitors or the market can distort their view.
For instance, a company evaluating a potential acquisition may significantly overpay if the target’s financial statements contain inflated revenue figures or understated liabilities. This can strain the acquiring company’s balance sheet and divert resources from more promising opportunities. Similarly, decisions about capital expenditure, such as investing in new equipment or expanding production facilities, can be compromised if projections are rooted in unreliable sales forecasts or inaccurate cost analyses.
For investors, inaccurate data poses serious portfolio risk. Underrepresented performance data can result in exposure to sub-optimal holdings, or alternatively, a missed opportunity to capitalize on an undervalued, more lucrative asset.
The Effect of Misrepresented Valuations
The integrity of financial data directly affects valuations, which in turn influences investor confidence and market perception. Inaccurate data can lead to both over- and under-valuation of a company, with significant hidden costs.
Data that is aggregated or standardized could result in faulty EBITDA figures, misrepresented cash flow, or inconsistent depreciation calculations that can materially alter enterprise value. This puts decision-makers who use aggregated data at risk of making poor decisions, like overvaluing a company that faces a sharp correction, resulting in significant investor losses. The hidden cost extends beyond the immediate financial hit to the erosion of investor trust, which can be difficult to rebuild. Adding to the hidden cost is the extra time firms might invest to double check unreliable data.
Lost Opportunities and Deals
In a competitive deal landscape, inaccurate or incomplete financial data is costly from a sheer opportunity perspective. Lacking clean, structured data can result in overlooked deals or those lost to competitors that were able to execute with greater speed and confidence. The magnitude of the lost opportunity is never truly known.
For example, a private equity firm whose due diligence process is hampered by inaccurate target company data may either pass on a genuinely promising deal due to perceived risks or pursue a flawed opportunity that diverts resources from better prospects. The hidden cost is the profit that could have been realized from the "missed" opportunity, a value that while difficult to quantify is undeniably significant.
In corporate environments, trusted financial data informs market trends, competitor performance, and internal capabilities vital to identifying strategic partnerships, joint ventures, or expansion into new markets. Flawed financial reporting may deter leadership from pursuing growth initiatives that are well within their financial reach, allowing competitors to gain a first-mover advantage.
Mitigate Risks with Unified Financial Data
To mitigate the risks associated with inaccurate financial data, investors and corporate strategists rely on comprehensive, vetted data for their most important business decisions. The AlphaSense platform offers them the unified quantitative data they need to pair with the qualitative insights they trust, to gain a complete market picture and to avoid blind spots.
With AlphaSense's newly expanded Company Profiles and Financial Data, core financials are warehoused in one unified dashboard, offering a current and historical look into revenue, EBITDA, EPS, competitor performance, valuations and ratios, consensus estimates, comparables, charting, historical transactions, and funding rounds.
A one-stop-shop of vetted, comprehensive financial data is foundational for building solid pitch books, preparing investment memos, monitoring competitors, and making portfolio allocations with conviction and ease. In addition, users can verify figures with AlphaSense’s Search to Audit feature, which identifies the number in the company filing.
Beyond standardized metrics, users can also find company- and industry-specific data with Canalyst KPIs, which track data released via filings, press releases, investor presentations, and supplementals, to provide a more comprehensive look at the relevant metrics for a given company or market.
Armed with sophisticated Canalyst modeling capabilities, industry comps, broker research, news, and expert transcripts, gaining a complete, data-driven financial picture is easier than ever — so you can move forward with the decisions that affect your business immediately.
What Our Clients are Saying
“AlphaSense was already great, but now with Company Profiles and the financial stuff, it's a goldmine."
– Managing Partner, Private Equity
“AlphaSense Company Profiles speed up a lot of the time consuming aspects of our research that we do on every deal, and since AlphaSense combines content and financials, we can get rid of other point solutions."
– Venture Capital Analyst
"Having broker research, the market intel, plus the financial data in a one stop shop, plus the searchability, traceability, and the AI on top of it all is extremely powerful."
– Executive Advisor, Finance & Strategic Projects
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