I've recently started working with Power BI and designing an application. The interesting thing about Power BI is that it is essentially a pivot table "on steroids".
I absolutely love pivot tables and whenever I assess equities, pivot tables are an essential tool to understanding the equity’s metrics. Now, you have to dig into the 10K and 10Q notes sometimes, but an unbelievable amount of information can be gleaned, at a high level, with the "ginsu knife" approach (slicing and dicing). The “flow” of the most important metrics and the inter-relationships among them can be readily observed over significant time frames.
The beautiful thing about accounting and using the “flow” and interrelationship approach with pivots is that much of the “shifting” between periods with accrual accounting can’t be as easily disguised.
The difference between normal Excel pivot tables and Power BI is that Excel pivot tables are based upon a single data file (flat file/rows and columns) and Power BI pivot tables are based upon a normalized database. While this difference seems rather trivial to the uninitiated user, a normalized database opens a whole new frontier of data analysis and metrics - on an exponential scale!
Pivot tables used to be a feature of MS Access a few versions ago. I image Microsoft identified how powerful a pivot table on a normalized database was and determined that it was foolish giving away the "keys to the castle" to the Access user. So, they yanked the functionality out of Access and built Power BI as an additional high-end revenue source. I can’t blame them when such a “slam dunk” revenue generator becomes clear.
I always use pivots to evaluate companies’ financials and I am thinking of integrating Power BI into that process. After all, more insight means a likely better understanding of companies’ financial positions and increased likelihood of better stock selections.
Gone are the days of single period financial statements or simple period to period comparisons. Why not drive a McLaren (Unfortunately, I'm not related!) versus a bicycle?
Be smart, be well-read, be aware and be successful.
