Flash data refers to most current market data that has been released and is an indication of how well a market is doing.
For example, gross domestic product (GDP) is an economic indicator that shows the performance of a nation’s economy for a calendar year.
This means that an investor, researcher or economist would not be able to determine how well an economy is doing midway through the year.
However, data that has been released for the current year might be available for the first three months. This is flash data that enables one to see how well the market has been performing so far during the year.
Flash data for certain sectors or the economy as a whole is published by government agencies.
Uses of flash data
Flash data take the most current information available to help people judge various aspects of a business or market.
A company with flash data for the most recent month for example, can analyze how well this particular month is performing compared to historical performance in the same month for the years before.
An executive would also be able to see whether statistics like revenue has been growing on a month-to-month basis, or whether it is growing at all.
This might play an important role is assessing the effectiveness of corporate strategy with regards to market penetration.
For example, latest market data might show that a company’s product is gaining market share from competitors in the most recent month.
Flash data that represents the performance of a company is collated by the own internal departments of the company. They can sometimes be published for public scrutiny, especially with public listed companies.
This helps corporations deal with investor relations, reassuring stockholders of how well or how bad they are doing.
It must be said that the most common use of flash data is to provide a flash estimate of performance for the remainder of the year ahead.
For example, GDP might be projected to grow 5% for the calendar year ending December 31st. At the end of October, with two months to go before the close of the year, flash data can be used to evaluate whether the target 5% growth can be realistically attained.
If a company has an annual sales target of $1m, then hits $900,000 by the end of September, it is fair to say that the total sales of the year would be $1.2m. Thus, the company is judged to be on track to not just achieve the revenue target, but blast past it by the end of the year.
In this sense, it can be observed that flash estimates are more dependable indicators that uses more current flash data. And therefore, a more reliable estimate than what was projected at the beginning of the year. This is partly because the last 9 months (as in the above example) has already occurred and became fact instead of just projections.
With flash estimates, investors can make a better determination of what the official data would be in the near future, and make better investment decisions as it allows them to measure calculated risks more accurately.
