A financial analyst is a financial accounting professional who analyses the financial performance of a company or other entity and its management.
When you think of a financial analyst, you probably imagine someone sitting in a room crunching numbers all day. While it's true that being a financial analyst is all about crunching numbers, there's so much more to the job than just that. The most successful financial analysts are always looking for ways to improve both their clients' bottom lines and their own efficiency as well.
Financial Analyst Job Description
The job description for this position may vary greatly depending on the industry in which they are employed. In general, however, the duties of a financial analyst include the following:
- Making recommendations to management regarding strategic business decisions based on their understanding of current trends in the market.
- Performing complex analysis and research to determine how changes in the economy will affect different businesses.
- Preparing reports, presentations and other documents that will illustrate data analyses to clients.
Although a Bachelor's degree in Business Administration or Finance is typically recommended to become a financial analyst, employers are often willing to hire candidates with the right skillset and experience at the entry level. Some companies prefer candidates with a master's degree, but this is not always necessary. While a bachelor's degree usually takes four years to complete, a master's degree takes one to two more years. Either way, the most important part of becoming a successful analyst is gaining experience in the field.. A successful financial analyst is also good at critical thinking, which will help them identify problems and solve them as well as design new systems for the company.
There are four major things that analysts must consider when evaluating a company:
- First, they must decide whether the company has enough assets to carry out its business plan.
- Second, they must determine whether the company's assets will grow at a rate fast enough to keep up with its competition.
- Third, they must decide whether the company can maintain its current financial structure in light of new government regulations and trends in accounting practices.
- Lastly, they must determine what risk factors there are in any sort of investment in order to protect their clients from making bad investments.
In order to do these things effectively, analysts must be able to find information about every aspect of a company, from its products and services to its competitors and competitors' products and services. Many times this requires a lot of research conducted through secondary sources such as the internet and trade journals.
