If you’re a finance professional having financial data at your fingertips is gold. There’s good news for you. From now on for your analyses, you can use Wolfram Alpha (WA). A Computational Knowledge Engine that allows you to do a multitude of things. What’s the difference between WA and a search engine, like Google?
A search engine is just a tool that matches your query with data that is linked and provided by other users. Instead, a computational knowledge engine, like Wolfram Alpha takes raw data and makes computation out of it. There’s a huge difference between the two. While a search engine might be useful for the finance professional; A computational engine can become a real powerhouse!A computational engine can become a real powerhouse! Click To Tweet
How does Wolfram Alpha work? Let me show you a few things you can do with it that can boost your career right now!
I plugged into WA “Apple, ” and I got a set of useful financial data,
If fundamentals and financials are not enough, you can get more historical and comparative data with the same query,
Ok, not impressed yet? Let’s perform a comparative fundamental analysis in a few seconds!
Comparative fundamental analysis
I plugged into WA, “Apple vs Microsoft” and here’s the magic,
If you draft many reports on a monthly basis, then you might also need some summary about those companies. Our new friend WA is providing that too,
What else can we do? Bare with me
Historical Comparison and Forecasting
In the same query “Apple vs Microsoft” at the bottom of the page, you’ll also find the historical comparison, which is extremely useful.
If that is not enough, if you scroll a bit more you’ll also find projections
If you’re familiar with financial markets, you also know that they follow a random walk. Therefore, you can set the timeframe and have the projection take a “new random walk” as it follows,
If you’re like me, after seeing this you should already be very excited. We deal with numbers, so we have to leave emotions aside and get our composure back. It’s time to use this tool to its maximum potential!
Computational Analysis of Stocks
Let’s do now a quick computational analysis. I want to know the Market Cap of Apple over Microsoft. With this simple query, “market cap Apple / Microsoft” WA does it for me,
Yet we are still thinking at the microeconomic level. Let’s change perspective and let’s look at it from the macro level. I want to know how much the New York GDP contributes to the overall GDP of United States. Here you go the result and historical analysis,
With this logic, you can compute anything. From macroeconomic values to comparative analyses of companies or currencies and commodities. It’s really up to you and the kind of financial analysis you are performing.
Present Value, Future Value, and Interest Calculation
In the financial world, anyone is familiar with the concept of time value of money. Time value tells us that a dollar today is worth more than a dollar tomorrow. What does that mean? It means that when you have a sum of money today. That amount could be invested to earn more money through interests. At the same time, that amount of money could also lose value due to inflation. Therefore, you need to strike a balance between the two to make sure that your money in the future will be worth more.
To know how much is worth today a sum of money invested in the future at a given rate of return, I have to compute its present value (PV).
There are a plethora of PV calculator out there. Yet WA is powerful because it is very dynamical and it allows you to see the historical comparisons and value. Keep in mind; you can ask WA any factual question that pops to mind,
Macroeconomic and Socioeconomic data and Comparison
When doing a financial report, there are certain macroeconomic and socioeconomic data to take into account. In this respect, WA will make your life way easier. For instance, we can make a demographic comparison between US and Canada,
Or better yet we can do a more in-depth macroeconomic and socioeconomic comparison by just plugging “US vs Canada,”
There are endless possibilities in using this incredible tool. It is really up to you, the analysis you’re drafting and the creativity on how to perform it.
Summary and Conclusion
Wolfram Alpha is a powerhouse for finance professionals. You can use it in many ways. From data collection to macroeconomic and socioeconomic comparison. Wolfram Alpha is the tool you have to master to progress your career and make your analyses rock. It is really up to you to start using this tool and make the best of it to become a trusted financial professional.
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