A financial analyst is surely one of the most popular and prominent occupations at the moment. More and more students want to engage their lives with finance because it gives a lot of benefits and the freedom to choose one of multiple industries and fields. On top of it, the salaries in the finance are impressive, so with enough devotion and motivation, it is possible to reach not only the highest heights but also to earn a great living.
If you are a finance or a business major, consider financial analysis, because it may be exactly what you need! Even if you are a high school student or studying in a completely different field, reading about financial analysis and its peculiarities may greatly help you to make up your mind.
So who is a financial analyst? It is a specialist that makes recommendations for organizations and businesses based on a thorough analysis of such factors as market trends, the financial status of the enterprise and predictions for a certain deal.
In most cases, financial analysts have a college or university majors in finance, accounting or business and feel comfortable working with numbers and complex data. These specialists can process huge amounts of information and to give clear recommendations.
In this article, we will give you the most comprehensive information on what analysts do, how their regular day looks like and what qualifications one should possess to gain reputation and success in financial analysis.
The main responsibility of an analyst is to create financial models that would predict the results of a certain decision. Sounds simple? However, to achieve this they need to process and analyze a huge amount of information inside the company and data from the outside – market fluctuations, latest trends and past decisions of the same kind. Although the responsibilities may greatly differ depending on the industry the analyst works in – whether it is a bank or a public institution.
Now let us discuss what financial analysts do and how their regular day looks like. We are sure you’ll be excited with a huge variety of tasks, challenges, and responsibilities they have!
Financial analyst entry-level requirements include the collection of information. This is probably one of the most time-consuming stages of the analytical process because an analyst needs to use various sources, manage huge volumes of data and distinguish only sources that are worth attention.
Moreover, it is necessary to use only up-to-date and relevant information. It is impossible to make up decisions based on unclear data, and the whole financial analysis may suffer if the information is gathered in a wrong manner.
Luckily, nowadays there are multiple tools, programs, and software that help analysts to process huge volumes of information in no time and to remain updated on the most important aspects in the field.
Organizing collected information is the second stage of the process. Without a clear organizational model and pattern, it will be impossible for an analyst to find and apply necessary data without delays.
At the moment there are multiple programs, which allow to store and organize information based on the date of publication, source type, content and much more. You can just upload it and then find the necessary elements through the search bar.
Life of an analyst is concentrated around analyzing the financial results. After data is collected it is the right time for an analyst to show everything he is capable of. This means that an analyst uses all the financial instruments, algorithms, formulas and models to interpret obtained information and to understand how it can help in solving a particular issue or in making a certain prediction.
This stage should always include analyzing previous data to see whether they were able to achieve the necessary results or not.
Based on the analyzed results analysts can make forecasts and predictions. This stage usually involves the application of financial models to support a particular decision. Analysts also use variance analysis, identify future trends in the industry or their own company and make a prognosis for possible improvements.
Financial analysts also analyze costs to predict whether the decision will be profitable or not. Usually, in large companies, financial analysts participate in the decision-making process of every department because they possess valuable information and can decide whether a particular decision will be good for the company (or another institution) or not.
Another responsibility of a finance analyst is to recommend an action plan after analyzing and evaluating data, and creating a comparative analysis. Such specialists also evaluate proposed recommendations by using various methods to decide whether they are viable or not.
Besides, analysts create recommendations for all the departments inside the company that can help to optimize expenditures, profits and to find the best balance between income and expenses. Financial analysts are irreplaceable when it comes to recommendations for the future of the organization, so not depending on your experience and time at the company you need to be ready to make a prognosis and recommendations on regular basis.
Making recommendations is not enough. Analysts need to back analysis with credible and up-to-date information and to do it in the most convenient. Remember that other workers may not understand complex financial terms, so it is necessary to give maximum information in a convenient mode.
Presentations include visual materials and content (usually made on MS Word instruments) that contain quantitative data, infographics, charts, and images. In most of the cases, such presentations should be completed at the end of the reporting period or during a meeting with new clients.
That is why, when learning financial analysis many specialists devote some time to mastering software and programs for creating presentations and video content.
All of the data that was collected and analyzed in the above stages should eventually turn into a report. This report will then end up on a desk at a certain department or CEO and will greatly influence future decisions. Here are the main tasks and responsibilities on this stage:
As you see, reporting is the main instrument that analysts use to tell about their findings and conclusions and to reach other departments or customers with a clear, structured and understandable data.
One of the best things about financial analyst jobs is that they are diverse and you can surely find a niche that perfectly meets your requirements and preferences. There are tens of various industries, where an analyst can be useful, just pick the one you are interested in!
These job types can be divided into four categories with subsections each:
3. Public accounting:
As you have learned above, there are various financial analyst jobs and each of them may have specific requirements and demands in terms of education and experience. However, there are still basic qualifications that any person pursuing a financial career should possess:
Even if it seems that these qualities are more than demanding, it is really easy to master them with devotion and time. Luckily there are multiple manuals online, short- and long-term courses and training programs for mastering certain software or acquiring particular skills.
If you expect to get a more attractive offer or to occupy a better position, here is a list of preferred qualifications that you need to have:
Sounds scary? Don’t worry, all these qualities are easily obtained in the work process, so you just need to follow the chosen path and be ready to improve your skills and knowledge!
As you probably understand, in all of the spheres professional skills are not always enough. You should also possess personal and interpersonal skills to achieve outstanding results and to obtain recognition:
If you are a student or are just starting your career in finance, you will surely have enough time to develop those skills!
Financial analyst day is very busy and consists of tens or even hundreds of different tasks. That is why one day is not like the other and always brings new challenges. However, to get a clearer picture, here are the main responsibilities of an analyst not depending on the industry:
Sounds thrilling, right? No surprise that analysis is one of the core positions in any company and CEOs pay careful attention to the satisfaction and well-being of their analysts.
Today we have talked about financial analysis and how it became one of the most popular and interesting occupations in a variety of fields. It is a great chance not only to apply your love to numbers and outstanding analytical skills but an opportunity to earn good money, travel around the world and constantly evolve.
Unfortunately, higher demand causes trouble on the market, so more and more specialists find it difficult to find a job. That is why the first step is to create a strong resume. A resume that will catch the attention of the hiring manager and will make him or her want to invite you for an interview.
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