Variance analysis

Variance analysis is a process where the financial and operational performance of a business is evaluated in terms of variances against budgets or standards. The purpose of analysing variances is to ensure timely identification of areas for managerial action. These variances will be either favourable variances (F) or adverse variances (A).


reference: Business Studies / Accounting. Accounts & Finance Glossary. Jim Riley BA(Hons) MBA FCA // tutor2u