Financial analysts help their organisations or clients make informed investment decisions and also perform in-depth research. These jobs are common in big businesses such as insurance organisations and investment banks and require strong mathematical and analytical skills. Aspirants can opt for additional financial certification courses like CPA to land financial analysis roles and command a high CPA salary in India.
With that said, let us take a further look into the essentials of financial analysis.
What is financial analysis?
Financial analysis is the process of evaluating companies, projects, budgets, and other finance-related transactions to determine their viability and suitability.
It is used to determine whether a business is financially sound, stable, able to pay off debt, and profitable enough to warrant investment.
How to Pursue a Career as a Financial Analyst
You can become a financial analyst through education and early professional experiences; for example, you can invest in a financial analysis course to pursue finance career options.
The majority of entry-level jobs in the finance sector require a bachelor’s degree in business administration, finance, accounting or a related discipline such as general business, economics, or statistics.
Senior financial analysts often focus on direct engagement with high-level clients, managing firms, and creating marketing strategies to acquire new customers.A Certified Public Accountant is one of the many jobs that come under the financial analyst umbrella. The job is lucrative as the average CPA salary in India for freshers is around INR 6.8 LPA.
Necessary Skills and Education
Some of the skills that you need to thrive in jobs in the finance sector include various technical and soft skills, such as:
Technical skills
Financial statement analysis
As a financial analyst, it’s important to have extensive knowledge of income statements, balance sheets, and cash flow statements. Knowledge of these aspects can help you analyse a company’s liquidity, solvency, and profitability.
Financial modelling:
If you want to delve into finance career options then it is important that you know how to build and interpret various financial models, as they can help you forecast a company’s future performance based on a variety of situations.
Soft skills
Attention to detail
Jobs in the finance sector require a keen eye, as serious compilation errors might result from overlooking a minor detail. This can lead to significant miscalculations. Therefore, it is important to be careful.
Communication
All the best careers in finance require solid communication skills, as good communication helps you easily communicate data with stakeholders.
Importance of Financial Analysis
Financial analysis is important for various reasons, with some of them being:
Assessing a business’s profitability and earnings prospects: Financial analysis helps verify whether a company’s earnings meet or exceed the set expectations. It also helps determine profit trends and assess the company’s earning potential.
Evaluate the financial robustness of the business: Financial analysis helps evaluate a company’s financial health and its impact on the market.
Beneficial for the management: With financial analysis, you can gain thorough insight into a company’s management and help it make vital business decisions.
Categories of Financial Analysis
Some of the common types of financial analysis are:
1. External analysis
This type of analysis is performed by investors, stakeholders, and researchers who depend on information published in reports like the Statement of Profit and Loss and Balance Sheet, as they lack access to internal and confidential business data.
2. Internal analysis
In comparison to external analysis, you can use this kind of analysis to carry out internal management and conduct a thorough analysis to access precise and in-depth information since you have full access to confidential business data.
3. Horizontal analysis
You can use horizontal analysis from multiple years to determine how profitable your company is and how fast it is expanding. This process is also known as time series analysis or dynamic analysis.
4. Vertical analysis
Vertical analysis, also known as cross-sectional analysis or static analysis, is the study of a single year’s worth of financial statements. It includes examining the connections between balance sheets, statements of profit and loss, and other things within a single financial year.
5. Ratio analysis
You can use ratio analysis to examine the correlations between several financial parameters to learn more about a business’s efficiency, financial health, and performance. It mainly helps assess a business’s liquidity, profitability, operational efficiency, and solvency.
Conclusion
A career as a financial analyst is lucrative since financial analysis is growing rapidly, and so is the hiring demand for financial analysts.
Meanwhile, thanks to an increase in access to education opportunities, you can easily find various online and offline courses to polish your skills or learn more about financial analysis.
So, if you want to start a career in financial services or corporate finance, why not enrol in Imarticus Learning’s Postgraduate Financial Analysis Programme! Visit Imarticus Learning and join our financial analysis course today to kickstart your financial analyst career and find the best path to your preferred jobs in the finance sector.
FAQs
What are the three types of financial analysis?
The three most vital financial analyses are horizontal, vertical, and ratio analysis.
What are the roles of a financial analyst?
As a financial analyst, you can work in some of the best careers in finance, including roles in insurance companies, pension funds, banks, and various other businesses. Financial analysts mainly assess stock performances, investments, and various types of bonds.
What are the three main financial statements called?
The three main financial statements are called income statement, balance sheet, and statement of cash flow. These aforementioned functions are informative tools that traders use to assess a company’s financial well-being and offers a concise overview of the company’s worth.
What is financial analysis also known as?
Financial analysis is also known as accounting analysis, financial statement analysis, or analysis of finance. All of these refer to the assessment of stability, viability, and profitability of a project, business, or sub-business.
Horizontal analysis is a significant aspect of the world of finance. It is a systematic approach to analysing financial statements by drawing conclusions by comparing financial information for an accounting period while comparing the specific information with other accounting periods. it is usually analysed as the growth in the percentage of a specific item in a year while comparing it with the base year.
Horizontal analysis is important for companies as it helps to easily spot trends and analyse the growth patterns of specific items. Learning horizontal analysis is a must. Acquiring the knowledge of horizontal analysis is a must for individuals who want to build a career in finance.
Read on to understand “what is meant by horizontal analysis?” And how it impacts the finances of an organisation.
What is Meant by Horizontal Analysis?
Horizontal analysis is a key aspect of financial statement analysis which allows users to compare a specific line of item of an accounting period with that of other accounting periods. It is basically done to draw conclusions about the growth or fall of an item.
Horizontal analysis can be used in two ways. One is absolute comparison and another is percentage comparison. Here, the baseline is taken as a hundred percent and a comparison of other accounting periods is drawn accordingly. Hence, this approach is also known as base year analysis.
Horizontal analysis of financial statements is crucial for determining the growth of an organisation when compared to its competitors. It is a way of asserting historical trends which helps organisations to know which part is profitable and which is incurring losses.
Horizontal Analysis in Reporting Standards
As stated in the generally accepted accounting principles (GAAP), financial statements should be projected in such a manner that the information is consistent and comparable in order to evaluate the company’s financial performance. Individuals trying to build a career in finance should be well versed in the GAAP principles and draft the financial statements accordingly.
Here, consistency implies that if a company is following a certain method of accounting in the base year, it must follow the same accounting method in the consecutive years. Therefore, the results remain authentic and constant over the accounting periods.
Secondly, by comparability, the standards dictate an organisation to maintain its financial statements and other relevant documents in such a manner that can be evaluated and compared with other companies in the same industry.
Hence, horizontal analysis of financial statements allows the companies to improve the consistency and comparability constraint as outlined by the GAAP.
Key Metrics in Horizontal Analysis
A company’s financial performance is reflected by its financial statements which consist of the balance sheet, profit and loss statement and cash flow statement. These financial statements project a clear picture of the organisational performance for that accounting period. At the same time, emerging trends, strengths and weaknesses, critical operational aspects and improvement areas of a company can be ascertained by analysing the various factors such as return on equity, profit margin and inventory turnover ratio.
For instance, an organisation’s management may project that the sudden growth of profit or the decline of the cost of goods sold is the reason for the growth per share. After performing horizontal analysis for interest coverage ratio and cash flow to debt ratio the company may conclude whether there has been sufficient liquidity for the accounting year or not. A horizontal balance sheet can also used to compare the growth rate, profitability, losses and overall business performance of various companies and in the same company for various accounting periods.
How Horizontal Analysis Works?
Horizontal analysis of financial statements provides a clear picture to the investors and the shareholders of the company of how the organisation has performed for a particular accounting period. It allows investors to ascertain what has been the driving force of the company and what results it has yielded in their favour. They can easily identify the loopholes and see the growth trend by comparing the relative changes.
For building a career in finance, it’s important to perform a proper analysis of the financial statements of a company such as cash flow statement, income statement and balance sheet. These reveal the company’s operating efficiency along with the operational results.
The analysis of critical aspects of a company’s finances, such as its return to equity, inventory turnover, and profit margins depends upon horizontal analysis. Coverage ratios show the liquidity capacity of a company and its ability to meet its current debts. With effective horizontal analysis, the growth and profitability of a company can also be evaluated.
To know more about horizontal analysis and its working structure, one may enrol on an insightful financial analysis course. The Postgraduate Financial Analysis Programme by Imarticus is a great pick where you can gain hands-on knowledge about the said topic.
How to Perform a Horizontal Analysis?
The procedure of horizontal analysis is short and crisp. However, it involves three major steps that need to be followed with precision.
The following other steps that one needs to follow to perform horizontal analysis of financial statements:
Step 1: gather financial information
To proceed with the process of horizontal analysis, financial individuals need to gather financial information about a company for various accounting periods. This is generally done by drawing annual financial statements during various accounting years. Thereafter, specific account balances in the balance sheet or cash flow statement are looked upon to uphold a specific line analysis.
Individuals need to ensure that the gap between each financial statement remains consistent. Otherwise, the calculation and conclusion will not be accurate. However, the interval of the accounting period is at the discretion of the organisation, it can be done on a monthly, quarterly or yearly. However, the difference between each iterative accounting period should remain equal and consistent for precise comparison of financial information.
Step 2: determine comparison methods
After successfully gathering the financial information of an entity for various accounting periods, the next step is to decide on the comparison method. There are several primary comparison methods such as direct comparison, variance analysis, horizontal analysis, vertical analysis, and so on.
Here, the chosen approach is horizontal analysis where the comparison is strong by the change in percentage of one accounting period to another. However, all the percentage change is calculated while considering the base year chosen by the organisation. As the company’s operation grows, it becomes difficult to maintain the same growth rate.
In order to identify changes over a longer period, the percentage method proves to be very useful. This method also provides indications of significant deviations in the current period when compared to the base year.
Step 3: identify trends and patterns
After the entire calculation process is done, and the financial information is verified, it is time to analyse the outcomes. However, the identification of growth, trends and patterns is characterised by taking into account some specifically guided concerns.
For instance, the management may want to know how well the cost of goods sold for a particular region has been. In that case, the financial analyst needs to provide the result for that specific line of item for various accounting periods. It helps to understand the comparison and also identify the growth rate.
Example of Horizontal Analysis
Horizontal analysis of financial statements is a way to measure the changes in dollars or percentages for various accounting periods by drawing a comparison with the base year. When people having a career in finance state that the revenue has gone up by 10% for the quarter, it means that such individuals are talking about the outcome of horizontal analysis.
The percentage change is calculated by dividing the dollar change between the base year and the year in question by considering the line item. The quotient is then multiplied by 100.
To calculate horizon analysis in percentage the following formula has to be used:
Horizontal analysis (%)= {(amount in comparison year – amount in base year)/ amount in base year} * 100
For example, if an investor wants to invest in ABC company, the investor will want to know how the company has performed over the past years. let’s say that in company ABC, the base year reported the net revenue to be $10 million and retained income of $50 million.
The current year, that is the question of the same company has reported net revenue of $20 million and retained income of $52 million. As a consequence, the net increase has been $10 million, and the earnings retained for that particular particular year is $2 million.
Therefore, the net worth of the company shot up by 100%.
That is,
($20 million -$10 million)/$10 million * 100
Whereas, its retained income only grew by 4%.
That is,
($52 million -$50 million)/ $50 million * 100
period 1 (base year)
period 2 (current year)
change
% change
Net revenue
$10 million
$20 million
+ $10 million
100%
Retained income
$50 million
$52 million
+ $2 million
4%
Advantages of Horizontal Analysis
Horizontal analysis offers very few disadvantages in financial reporting and financial analysis. The following are the benefits of horizontal analysis:
It provides a clear picture of the company’s financial performance and health.
It helps to easily identify growth patterns and trends by comparing financial information of different accounting periods.
It states whether the company is in a growth stage or facing a decline.
Horizontal analysis helps the management of a company to make informed decisions.
It helps to identify the irregularities and anomalies within the company.
It helps to elevate benchmarking against competitors and industry-standard standards.
It allows an in-depth examination of the financial information of the company, which leads to a better understanding of the company’s financial health.
The outcomes of horizontal analysis aid in strategic planning and sustainable business growth.
Criticism of Horizontal Analysis
Horizontal analysis is considered a beneficial approach for companies to ascertain their financial performance, but it is characterised by certain criticism as well. A financial analyst can manipulate the conclusions of horizontal analysis based on the year he chooses as the base year and how many accounting periods he takes into consideration for drawing the comparison.
For instance, the current accounting year’s profit may outshine the ones with which it is compared. On the other hand, it may prove to be relatively poor when compared to the profits of the preceding years which has not been taken into consideration. Hence, it is important for individuals wanting to build a career in finance to know that in such scenarios, leaving a footnote about the financial statement and its consistency is one of the best practices.
Another issue with horizontal analysis of financial statements is that the aggregation of financial information in those statements may have changed over time. It means that the expenses, revenues, assets and liabilities may have changed in different accounting periods. Hence, these changes can cause variations when comparing the account balances of one accounting year to another.
Precise horizontal analysis thus gets affected due to these variations and meticulous selection of the base year and consecutive accounting years for comparison.
Conclusion
Horizontal analysis is an amazing approach to financial analysis that is used to analyse a company’s financial performance over time. It compares previous and current financial performance for various accounting years, which helps to provide a clear picture of how the company is doing. With horizontal analysis, an organisation can spot growth trends and deviations with much accuracy.
If you are a finance professional or you want to step into the field of finance then becoming a financial analyst is a great career option. There are multiple financial analyst courses that you can take to improve your skill set. The Postgraduate Financial Analysis Program by Imarticus is an insightful course that will help you leverage your abilities in the field of finance.
Frequently Asked Questions
How to do horizontal analysis step-by-step?
There are three major steps involved in the process of horizontal analysis. The first step is to gather financial information, followed by determining the comparison methods. Lastly, identified trends and patterns.
What is the formula used to complete a horizontal analysis?
For calculating horizontal analysis, the formula is:
Horizontal analysis (%)= {(amount in comparison year – amount in base year)/ amount in base year} * 100
What is another name for horizontal analysis?
Horizontal analysis is also known as trend analysis where individuals compare the change in the financial statements of one accounting year with another.
How to calculate the current ratio?
One can calculate the current ratio by dividing a company’s total current assets by its total current liabilities. The current ratio is a resource that can easily be converted into cash and cash equivalents within one year or less than that.
Over the past few years, there has been substantial growth in the investment market. People are becoming more aware of recent economic trends. However, the long-term benefits of investment banking come with huge market risks.
It might sound daunting, but there are certain effective risk management techniques too to help with market risk. In this blog, we will discuss all of these in detail, so that you can invest consciously.
Market Risk Definition
The market risk definition is quite straightforward. The unpredictability surrounding any investment choice is referred to as market risk, often called systematic risk. Unexpected changes in variables that frequently impact the whole financial market are a typical cause of price volatility.
Market risk is determined by the performance of the market as a whole and is not specifically tied to the company or industry that an investor is participating in. An investor must thus keep an eye on several macro factors linked to the financial industry, such as interest rates, inflation, the equilibrium of payments, budget shortfalls, and regional issues.
Various Forms of Market Risk
Interest Rate Risk Interest rate risk results from unexpected changes in interest rates brought on by the monetary policies of the central bank actions. Long-term parity in the returns on securities provided across all markets requires a modification of market demand alongside supply for the instrument. Therefore, a rise in rates would result in a decrease in the price of the security. It is mostly connected to securities with fixed income.
Commodity Risk Some commodities, like food grains or oil, are used as indirect inputs in the production of many other things and are therefore essential to every economy. Any fluctuations in commodity prices have a cascading effect on performance in the market and frequently lead to a supply-side crisis.
Currency Risk
Another name for currency risk is exchange rate risk. It speaks about the potential for a decrease in the return that an investor receives as a result of the worth of their native currency depreciating. Usually, while making an overseas investment, the risk is considered into account.
Country Risk Several macro issues that are outside the purview of the marketplaces might impact the return on investment. These include the degree of political stability, the degree of fiscal imbalance, the regulatory environment, the ease of doing business, and the vulnerability to natural disasters. When choosing to make an overseas investment, one must evaluate the level of risk involved with such elements.
Ways to Alleviate Market Risk
The risk cannot be minimised by diversification because it impacts the entire market, however, it may be hedged for low exposure. As a consequence, even with meticulous execution of basic and analytical research on the specific investment choice, investors may not receive the desired profits.
In addition to using techniques like Value at Risk (VaR) modelling to predict potential damage via quantitative risk management, professional analysts frequently view fluctuations, or the absolute/percentage variation in rates, as a useful indicator of market risk.
By comparing an asset’s beta coefficient to the market as a whole, an investor can ascertain the degree of market risk volatility associated with that investment or portfolio. The capital asset pricing model (CAPM) is another tool used to calculate the projected return on an asset.
Risk Management in Investment Banking
Risk management in investment banking refers to the systematic process banks employ to identify, assess, and mitigate a variety of risks, such as credit, market, operational, and compliance risks that influence investment and operational decisions.
The process of systematically identifying, assessing, and minimising risks that a bank may face in the course of its regular business is known as banking risk management, and it is intended to guarantee stability and long-term sustainability.
In the banking industry, efficient risk management may support the preservation of the system’s overall viability, investor and depositor interests, and financial stability. It’s an important job that needs constant care and adjustment to the changing financial scene. Enrolling in an investment banking course could also be a great place to gain more knowledge related to risk management skills.
Important Steps of A Risk Management Process
The risk management process consists of these five fundamental steps, which are used to manage market risk:
Identifying the Risk
Analysing the Risk
Evaluating the Risk
Treating the Risk
Monitoring the Risk
Step 1: Identifying the Risk
Determining the risks which the company faces in its operational environment is the first stage in the risk management process.
There are several varieties of dangers, including:
Risks to the law
Dangers to the environment
Market dangers
Risks related to regulations, etc.
This strategy has the benefit of making these risks obvious to all organisation stakeholders who have system access.
Step 2: Analysing the Risk
A market risk must be examined when it has been recognised. It is important to look at how many business operations the risk impacts to evaluate the risk’s degree and significance. Certain risks, if they materialise, have the potential to completely collapse the company, while other risks in the analysis will simply cause minimal setbacks.
Step 3: Evaluating the Risk
Depending on how serious the risks are, most risk management solutions include many risk categories. A market risk that could end in a little dissatisfaction is rated low, whereas a market risk that could cause an enormous loss is rated maximum. Classifying risks is crucial since it provides an organisation with a comprehensive understanding of its overall risk exposure.
There are primarily two types of risk assessments: Qualitative Risk Assessment and Quantitative Risk Assessment
Step 4: Treating the Risk
Alerts may be delivered from inside the system to all pertinent stakeholders in a risk management solution. The risk may be discussed, as well as potential solutions, from within the framework. Furthermore, senior executives may closely monitor the advancements made inside the system and the remedies that are being proposed.
Step 5: Monitoring the Risk
Two types of risks that require constant monitoring are market risks and environmental risks. When using manual methods, watchful staff members do the monitoring. These specialists must maintain vigilant monitoring of all risk parameters.
The risk management system keeps an eye on the company’s whole risk framework in a digital setting. Additionally, computers are far more adept than humans in constantly tracking risks.
Investing is necessary in today’s time. But, investing does come with its cons too. But if aspiring investors can follow the steps that have been discussed in this blog, steering away from risks and managing them can get easier.
Enrol in the Certified Investment Banking Operations Professional (CIBOP™) by Imarticus to learn more about market risks and risk management.
Frequently Asked Questions
Why is risk management essential for banks? For banks to preserve their credibility, maximise return on investment, guarantee financial stability, comply with legal obligations, and promote long-term development and long-term viability risk management is essential.
How is stress testing essential in risk management? Stress testing helps banks find weaknesses and modify risk management techniques by modelling extreme market situations, recessions, or specific risks like loan defaults. This helps banks examine their resilience under undesirable scenarios.
In what ways can risk management help banks comply with regulations? Identifying, assessing, and mitigating risks related to financial transactions, data security, anti-money laundering (AML) regulations, and client protection statutes are all part of risk management. By doing this, banks are guaranteed to adhere to regulatory standards. Enrolling in an investment banking course can also provide deeper insights into the varied benefits of risk management.
How can a bank assess and manage credit risk? To assess credit risk, banks look at debtor repayment capacity, collateral, and financial condition. Examples of mitigation strategies include risk-based pricing, credit limit setting, and portfolio diversification.
If you’re reading this, you’re probably asking one of two questions: “Is CPA worth it?” or “How soon will my CPA salary make this whole effort pay off?”
Think about it – what makes certain professionals stand out in finance? How do they gain the credibility to advise on multi-crore budgets, manage risks, or guide companies through complex audits?
This is exactly where specialised training and a CPA certification come into play. It’s what separates someone who simply crunches numbers from a professional who can lead financial strategy, influence major decisions, and command top-tier salaries.
In this blog, we’ll walk through the full map – what is the full form of CPA, real salary ranges in India according to roles and experience, city and industry premiums, how to strategically approach the fresher to leadership pay, and more.
Did you know? Median salary for a new CPA graduate with a bachelor’s degree in the US is $60,834 in 2025, marking an 11% increase over the previous AICPA survey period.
Overview of CPA
You’ve probably heard people talk about accountants, auditors, or finance managers, but not all of them have the same influence or earning potential. Some handle routine bookkeeping, while others are trusted to make strategic decisions that can shape the future of a company. And now, you might wonder who is behind these roles. Well, usually a professional with a CPA is trusted for these kinds of responsibilities.
Sounds like a buzzword, but you are not really sure what is CPA or even what is the full form of CPA. Let me break it down. The full form of CPA is Certified Public Accountant – a US professional accounting license that shows you passed the Uniform CPA Examination and met education & experience requirements.
It’s not a job title but a professional credential that opens roles in audit, tax, finance, risk, and corporate leadership. The AICPA (American Institute of CPAs) is the primary body behind the exam and resources.
What matters for salary is that employers pay for transferable skills (US GAAP/IFRS, tax, audit procedures, financial reporting), and CPAs often command higher pay in cross-border or MNC setups because they can speak both the technical accounting language and global regulatory dialects.
CPA Salary in India
Having a CPA in India can genuinely change the course of your career and open doors to higher earning potential. But it’s important to stay grounded – clearing the CPA exam doesn’t instantly make you a six-figure professional. The salaries you see are tied to the level of responsibility, expertise, and trust that companies place in a CPA. It’s a qualification that allows you to take charge of audits, taxation, financial planning, and strategic decisions that shape a business’s direction.
When you’re just starting, the pay is good – it’s enough to live comfortably and start building some savings. The real growth happens as you gain experience, choose a niche, and step into roles where your work influences major business decisions. That’s when your compensation begins to truly match the value you deliver as a finance professional.
Senior / leadership: ₹20–30 LPA+ – CFOs/Partners in Big firms can go much higher
CPA Salary in India by Experience
If you’re looking at a CPA purely through the lens of salary, here’s the truth: it grows steadily, not suddenly. The good part? It’s a growth you can count on. The market in India rewards CPAs who stay curious, take on complex projects, and continuously adapt to changing global standards.
If you’re worried about whether the CPA pays off – it does, but in the most sustainable way possible. Not overnight, but over time, your salary becomes a reflection of the trust your qualification commands.
Experience Level
Average Annual Salary (INR)
Fresher/Entry-Level (0-1 year)
₹6-9 LPA
Early-Career (2-4 years)
₹6–10 LPA (Total Compensation)
Mid-Career (5-10 years)
₹15–25 LPA
Senior/Experienced (10+ years)
₹24–30 LPA or more (Leadership roles often higher)
The jump between mid and senior – when you take on managerial ownership, client responsibility, or cross-border reporting – can multiply pay by 2x or more. That’s where most CPAs go from “comfortable” to “six-figure in INR” territory.
Salary growth over a CPA’s career
New hires with master’s degrees saw starting salaries increase roughly 17% to a median $67,750 from the previous survey.
You can make a Management jump (within 5→10 yrs): the biggest multiplier when the role expands beyond technical work.
CPA Salary by Industry
Not every CPA earns the same, and that’s because industries value accounting expertise differently. A CPA working in financial consulting or investment management often handles high-stakes decisions – so the compensation reflects that. On the other hand, those in manufacturing or public sector roles might enjoy more stability but at a steadier pay scale.
In India, the industry you choose often decides how fast your CPA qualification starts paying off. Technology, BFSI (Banking, Financial Services & Insurance), and consulting firms tend to offer the most aggressive salary growth, especially if you’re handling cross-border compliance or US GAAP reporting.
But ultimately, each sector brings something different to the table – some offer learning, some offer lifestyle, and a few offer both. The table below breaks down how CPA salaries vary across industries, so you can plan your career not just around your skills, but around where those skills are valued most.
Industry
Average Range
Big-4 / Audit firms
₹6–20 LPA (entry → manager)
MNC Finance / Corporate FP&A
₹8–25 LPA
Consulting / Advisory
₹10–30+ LPA
Tech (product firms)
₹8–22 LPA
Banking / BFSI
₹9–28 LPA
Public sector / NGOs
₹4–10 LPA
CPA Salary by Cities
Understanding how CPA salaries vary by city can help you make informed decisions about career opportunities and relocation. Here’s a snapshot of average salaries for Certified Public Accountants (CPAs) in key Indian cities:
Consulting and MNC corporate roles generally pay more because the work requires both technical and commercial acumen; Big-4 gives a strong early-career pay and learning curve, while senior Big-4 partners and ex-partners move to CFO/Controller roles with very high pay.
Key Takeaway→ Metro cities like Mumbai and Bengaluru top the charts due to the concentration of MNCs and finance centres.
Factors Impacting CPA Salary
A CPA’s paycheck doesn’t just depend on clearing the exam; it’s shaped by where you work, what you specialise in, how much experience you’ve gathered, and even how you position yourself in the market.
Two people with the same qualifications can have completely different salary stories. One might be working at a Big 4 firm in Mumbai handling multinational audits, while another could be consulting for startups remotely from Pune – both valid, both valuable, but with very different pay scales.
Understanding these factors early helps you make smarter career choices – from the industry you enter to the city you move to, to the niche you build expertise in.
Top factors:
Experience & Role Scope – early promotion to manager or specialist roles (tax/transfer pricing/forensic) multiplies pay faster than years alone. Mentor tip: Seek role expansions that add client-facing responsibility or people management within 3–5 years.
Industry – consulting/big-4/MNCs pay premiums. Tech companies with finance teams also pay well for US GAAP know-how. Mentor tip:Move laterally to BFSI or tech if you want steep salary growth.
City / Cost-of-doing-business – Mumbai, Bangalore, Delhi & Hyderabad command premiums (10–20%). Mentor tip: If you’re remote and earning from US firms, location is secondary – skill is king.
Skill Specialisation – IFRS conversions, US GAAP, international tax, and forensic accounting attract better pay. Mentor tip:Add a niche certificate (forensic, valuation) to your stack.
Employer Reputation (Big-4 / MNC vs domestic) – Big-4 lifts brand & learning; MNCs may pay more for control roles. Mentor Tip: If you want global mobility or cross-border exposure, Big 4 experience makes you a plug-and-play fit for multinational teams.
Once you understand what impacts a CPA’s earning power: experience, specialisation, and the trust you build in the market, the growth curve starts to make perfect sense. Below is a projection for the CPA Salary by 2030.
What impacts CPA salary the most?
Specialisation (tax, IFRS, transfer pricing): +20–40% pay uplift.
City: Mumbai/Bengaluru/Delhi pays ~10–20% more.
Scope of Responsibilities: client-facing + managerial = faster increases.
CPA vs CMA vs CA – The Salary and ROI comparison
If you’re trying to decide between the CPA, CMA, and CA certifications, you’re not alone. A lot of people reach this stage and wonder which one will actually help them grow their careers meaningfully.
The CPA is your ticket to global opportunities. It’s respected everywhere and can get you into roles in audit, taxation, or corporate finance that pay really well.
The CMA is more about understanding the business side of numbers, like planning, budgeting, and helping companies make smart financial moves. It’s a great choice if you enjoy strategy and want to grow in corporate roles.
The CA has deep roots in India and still carries huge respect here, especially if you’re interested in audit, tax, or compliance. This comparison highlights the earning potential for each qualification, helping you make an informed career choice.
Differentiator / Feature
CPA
CMA
CA
Global Recognition
✅
✅
❌
Average Global Starting Salary
✅
✅
❌
Mid-Career Salary Growth
✅
✅
✅
Top-Tier Salary Potential (10+ years)
✅
✅
✅
ROI (Cost-to-Earning Ratio)
✅
✅
❌
Duration to Qualify (Shorter)
✅
✅
❌
Recognition by MNCs & Global Firms
✅
✅
❌
Ease of Global Mobility
✅
✅
❌
Alignment with US/IFRS Standards
✅
✅
❌
Demand in Big 4 Firms
✅
✅
✅
CPA Salary Comparison with CA
The comparison below breaks down how salaries differ between CPAs and CAs across experience levels and roles, helping you see where each qualification truly shines – whether your goal is stability at home or a global finance career.
Level
CPA average
CA average
Notes
Entry(0–2 yrs)
6–8
5–6
CPA often edges CA at entry where US-focused roles exist.
Mid(5–10 yrs)
11–14
9–12
CPA shows a premium in MNC roles.
Senior(10+ yrs)
20–35+
15–25
CPA senior managers/CFOs often command global packages.
The “better” path depends on your desired market: if you want early domestic accounting roles in India only, CA is excellent. If you’re targeting MNCs, US reporting, or the US job market, a CPA increases global mobility and may improve salary upside.
Key Takeaway→ CPA offers global portability and often higher pay in MNC roles; CA is excellent for India-specific tax/audit depth. Choose based on target geography & role.
CPA Salaries In India vs the USA
If you benchmark against the US, the nominal numbers differ hugely due to currency and living costs.
Headline numbers:
US average CPA salary: ~$80k–120k+ depending on source and role.
What that means for India-based CPAs working for US firms: If you secure a remote role paid in USD, your INR salary (after conversion) can look dramatically higher – but remember taxation and benefits differ.
This video walks you through pay scales shift between India, the US, and other major markets – and what really drives those differences beyond just currency. It’s a quick, insightful watch that brings the numbers to life.
Executive CPA Salary in India and the US
When CPAs step into top executive roles, the pay gap between India and the US really starts to show – and it’s not just about the currency difference. It’s about the scale of work, the level of responsibility, and how each market values senior finance professionals.
In India, executive-level CPAs earn well above the average mid- or senior-level salary, especially if they’re working with multinational companies or global consulting firms. In the US, those same roles come with even higher compensation – not only because of the cost of living, but because these positions often shape major business and financial strategies.
The table below gives you a clearer picture of what executive CPAs typically earn in both countries. It’s not just about comparing numbers – it’s about understanding what drives those differences: experience, industry, and the size of the company you work for all play a big part in how far your CPA can take you.
Starting as a CPA, your salary reflects not just your qualification, but also the market you’re stepping into. In India, fresh CPAs earn a good starting pay that grows as they gain experience and take on bigger responsibilities. In the US, starting salaries are generally higher, thanks to the larger scale and cost of living differences.
The table below gives a quick snapshot of what is the CPA salary typically in India and the US. It’s a handy way to get a sense of what to expect as you begin your career and start planning your next steps.
Country
Experience Level
Average Annual Salary
India
Fresher/Entry-Level
₹6–8.5 LPA
India
Fresher/Entry-Level (Metro Cities)
Up to ₹13.8 LPA
US
Fresher/Entry-Level
$55,000–75,000
Average CPA Salary by Country
CPA salaries can be very different depending on where you are in the world. A lot of that comes down to the economy, industry demand, and the cost of living. In India, CPAs get a strong start and plenty of room to grow. But in places like the US, Canada, or Australia, salaries are usually higher, and the work often comes with more international exposure.
The table below gives you an easy snapshot of average CPA salaries by country. It’s a good way to see not just the numbers, but also the kinds of opportunities your qualification could open up for you.
Country
Average Annual Salary
United States of America (USA)
$90,000–99,000
Australia
$113,035
Canada
$100,291
India
₹9,12,663
Japan
¥7,755,349
United Arab Emirates (UAE)
AED 180,000
Ireland
€50,000
Understanding How CPA Salary Increases Over Time
Your CPA license is the key, but how fast you unlock its full earning potential depends on the moves you make. From choosing the right industry and city to specialising in high-demand niches, small tactical decisions can multiply your pay faster than just waiting for yearly increments.
In this section, we’ll share some approaches that can help you understand how can your CPA salaries grow over time, with smarter choices that translate directly into higher compensation and career growth.
Build a niche: Master one high-demand niche (transfer pricing, international tax, forensic). Market it on LinkedIn and include niche keywords.
Ask for higher-responsibility projects: Volunteer for cross-border reporting or client-facing tasks – responsibility beats tenure.
Get secondment experience: Temporary placements in MNC finance teams or overseas secondments boost pay and resume.
Consider lateral moves: Moving companies often yield higher jumps than annual increments.
Upskill with tech: SQL, Power BI, or automation tools increase bargaining power.
FAQs about CPA Salary
If you’ve made it this far, you probably still have a few questions buzzing in your head about CPA salary – how it grows, what affects it, and whether it’s really worth the effort. This section clears up the most common questions students and professionals ask about CPA salaries.
Who earns more, CA or CPA?
Both credentials are valuable. Generally, a CPA working in MNCs or roles requiring US GAAP/IFRS knowledge can earn a higher CPA salary in global-facing roles, whereas a CA may have stronger domestic opportunities in Indian tax and statutory audit. By seniority (10+ yrs), many CPAs who move into leadership roles or global finance positions will often see higher compensation than their CA counterparts, but individual outcomes depend on role, industry, and negotiation.
What is the highest CPA salary?
The top CPA salary varies widely. In India, senior CPAs who reach the C-suite (CFO, Finance Head, etc.) or become partners in large firms can earn ₹40–50 LPA and beyond, while global packages for senior finance executives can be higher. In the US, senior CPAs in finance leadership roles often average well into six figures (USD), and specialised roles or Big-4 partners report significantly higher pay.
Is CPA better than an MBA?
Better” depends on goals. A CPA is specialised, technical, and highly valued for accounting/audit/tax work; an MBA is generalist, leadership- and strategy-focused. If you want deep finance & reporting expertise and technical credibility, a CPA can be a higher ROI. If you want broad business leadership and a strong management network, an MBA might be the way to go. Some professionals do both to maximise skills and pay.
Am I eligible for CPA?
Your eligibility depends on the various state boards and the specific requirements (e.g. education credits, residency). Most candidates require 120–150 credit hours with accounting and business subjects. Check the AICPA/state board guidance for your exact pathway.
Is CPA a good career option?
Yes. CPAs are in global demand as the designation signals competence and opens doors in audit, tax, corporate finance, and advisory. In India, as businesses find their global footing, the demand for CPAs with international reporting skills will continue to grow.
Is CPA in demand in India?
Yes, CPA is very much in demand in India, particularly among MNCs, US-facing finance teams, consulting firms, and companies doing cross-border reporting. The demand is strongest in major finance hubs like Mumbai and Bengaluru.
Is CPA more difficult than CA?
Both are challenging but different. CA tests India-specific tax, law and audit frameworks extensively. CPA focuses on US exam content and state credentialing rules; difficulty depends on background, study approach, and exam readiness. Many Indian candidates find the CPA exam manageable with structured prep because it’s modular and exam-focused.
What is the fees of CPA course in India?
Fees usually vary: application stages like exam registration, board fees, and coaching combined fall in the range of ₹2–4 lakhs, depending on the coaching provider and your selected state board. Always check the latest fee schedules from the state board and coaching providers.
Which companies hire CPA in India?
Common employers include Big-4 firms, MNCs (Amazon, IBM, JP Morgan), tech product companies, consultancies, and banks, essentially any firm with international reporting or US filing requirements.
Your Next Steps
The true value of the CPA isn’t just in the paychecks – it’s in the kind of professional you become along the way. Salary is a milestone, not the destination. What the CPA does is refine how you think about money, business, and trust. It turns you from someone who records numbers into someone who interprets them – who helps companies make decisions that ripple through balance sheets, markets, and lives.
It’s a credential that demands discipline, but it also builds perspective. A CPA learns early that growth doesn’t come from chasing higher salaries alone, but from earning influence – the ability to walk into a boardroom and be trusted with financial truths. Some CPAs climb fast in multinational firms; others carve their niche in startups or consulting. But across every path, the thread remains the same: the ones who keep learning, keep rising.
Think of it like compounding interest – small, consistent efforts in learning, networking, and specialisation quietly multiply into exponential career returns. Your CPA license is the principal; how you invest it defines your yield.
If you’re ready to take that step – to not just earn more, but become more – the CPA Program in collaboration with KPMG in India offers the structure, mentorship, and global credibility to help you get there. With a money-back guarantee if you don’t clear your exams, live and on-demand sessions that adapt to your schedule, and projects that make you apply what you learn, it’s built for professionals who are serious about building a global finance career.
Because careers don’t just happen; they’re built with intention, skill, and the right guidance.
Are you planning a career in finance with lucrative opportunities and global recognition? Then the ACCA qualification is the right path for you! ACCA is a well-known designation that stands as a symbol of excellence in finance and accounting. The top companies in the world hire these professionals due to their exceptional knowledge and skills.
Becoming a part of the association is a matter of pride and takes utmost dedication. However, ACCA careers are extremely rewarding. Candidates are offered high-paying salaries working in the top positions of an organisation.
Let’s take a look at the career prospects of an ACCA member. In this guide, we will also discuss the ACCA salary in India for different job roles.
What is ACCA?
ACCA (Association of Chartered Certified Accountants) has a presence in over 180 countries of the world. ACCA has etched its marks in finance, fostering a community of highly skilled professionals.
Employers worldwide are actively searching for ACCA-qualified individuals to lead the financial teams of the company. These professionals are not just good with numbers. They are well-rounded finance professionals, equipped with comprehensive skills. The ACCA salary is very lucrative, which makes candidates work towards completing the course.
Why are people choosing ACCA?
Being ACCA-qualified has several perks. Let’s look at some of the reasons why people in finance are striving towards an ACCA qualification.
International recognition: ACCA members are sought after and respected globally. This qualification allows you to explore careers in banking or leadership roles such as CFO. The ACCA coursehas a worldwide network allowing you to explore international career opportunities.
Strong foundation: ACCA is the best path to choose if you want to enter the world of finance and accounting. The course is open to school graduates, college graduates, as well as experienced professionals looking to make an advancement in their careers. ACCA will teach you fundamental financing and accounting skills, communication expertise, managerial abilities, and technical aspects.
Immune to change: The finance industry is constantly evolving, including changing regulations, shifting economic conditions, and booming of new technology. ACCA-qualified candidates have the upper hand in this situation. These professionals are the top-tier professionals in the industry, which keeps them always in demand.
Leadership roles: ACCA focuses on building its members’ business thinking, ethics, and technical skills. This pushes these individuals to leadership roles, offering them a strategic advantage in the industry. These professionals are considered for managerial positions that need a strong understanding of finance.
If you want to strengthen your candidature and explore beyond finance and accounting check out the Profession Certificate in Product Management with CEC course offered by Imarticus. This programme has been built in association with IIT Roorkee and is taught by the best in the industry.
Career prospects for ACCA professionals
ACCA graduates are needed in almost every sector to help balance the finances of an organisation. There are several ACCA careers that you can explore and choose from. Here is a list of different job roles for these professionals and the associated ACCA salary:
Public practice sector jobs: As an ACCA graduate, there are several public sector practising jobs that you can explore.
Tax consultant: These professionals are hired to guide and advise their clients on tax-related matters. Tax consultants work with organisations to ensure that they are compiling with tax laws. They also help minimise potential tax liability.
These professionals prepare and submit tax returns, research tax laws, advise on tax planning, and represent clients in tax disputes. Tax consultants also determine any possible deductions that their clients might be eligible for. Here is a list of tax consultant ACCA salary in India:
Forensic accountants: These professionals are hired to analyse and examine accounting procedures and systems related to legal and criminal enquiries. Financial accountants play a big role when it comes to the well-being and financial stability of a firm.
They gather financial evidence, analyse the collected data, and explain their observations using reports and presentations. Financial accountants also help their clients discover potential financial threats, and prevent any loss of funds.
Here is a list of forensic accountants salary in India:
Business advisor: These professionals help entrepreneurs in planning and executing business strategies. This improves the business reach and helps accomplish goals. Business advisors research market trends and customer reviews to create useful strategies to achieve set targets.
These professionals help companies induce long-term growth. They improve on current business strategies, prepare budgets for the company, and identify expansion opportunities. They suggest changes that can be made within the company to improve the result. The ACCA salary of a business advisor ranges between:
Financial analyst: These professionals help companies make investment or business decisions based on their market understanding. They study industry trends, business news, and the company’s financial position to make informed decisions.
Financial analysts create business models to perform financial forecasts, predict future scenarios, and provide other data to business owners. These professionals also suggest budgeting efforts for the organisation. Here is a list of the ACCA salary of financial analysts.
Financial sector jobs: The ACCA courseprepares you to work with numbers and money. As a member of this association, there are several job roles that you can explore in the financial industry.
Risk manager: As the name suggests, these professionals identify, evaluate, and manage the risks that a company might encounter. Risk managers must conduct research and assessments to gauge potential risks to the company. They need excellent analytical skills to identify potential threats.
Risk managers also make changes to pre-existing risk management processes, allowing the company to achieve maximum risk control. They create reports and documentation to communicate their findings to the stakeholders. They also have to monitor and estimate the effectiveness of their plans and make any necessary changes.
Here is a comparison of the salary of a risk manager changes according to their experience.
Anti-money laundering officer: Every financial institution is always at risk of money laundering and financial crimes. These professionals oversee the pre-existing norms and procedures. This helps them detect, report, and prevent any suspicious financial activity.
An AML officer is responsible for ensuring that their organisation is meeting all the local, international, and federal anti-money laundering regulations. They should also ensure anti-money laundering policies that abide by the national and international norms. They also periodically review customer transactions to spot any suspicious activity.
It is one of the most rewarding ACCA careers.Here is a list of the salaries offered to anti-money laundering officers in India:
Fund accountant: These professionals specialise in accounting and reporting of funds like hedge funds, mutual funds, equity funds, etc. They are also responsible for managing and reconciling financial transactions done in investment funds. This includes tracking assets, calculating asset value, creating financial statements, and ensuring compliance with regulations.
Fund accountants play an important role in maintaining proper financial records of investment funds. They communicate their findings with the company regulators, investors, and stakeholders. This helps the fund stakeholders to make accurate and timely decisions.
Here is a list of the ACCA salary offered to fund accountants in India:
Public sector jobs: As an ACCA graduate, you will be offered high-ranking job roles in the public sector. Here is a list of the public sector jobs that you can explore:
Finance manager: These professionals are responsible for overseeing the financial health of an organisation. They create financial resorts, develop and implement financial strategies, and manage investments. A financial manager’s primary goal is to maximise the investments of an organisation.
These professionals also ensure that the financial resources of the company are being managed properly. Financial managers work closely with other leading members of the company to ensure that the financial goals are aligned with the overall company objectives.
The salary offered to finance managers in India according to their experience is as follows:
Management accountant: These professionals are hired to plan and analyse the performance and risk of an organisation. Management accountants gather financial data from financial documents including transactions, sales records, ledgers, and inventory records.
Management accountants evaluate the performance of a company by comparing factors like profitability, solvency, liquidity, and efficiency. They also compare the actual financial results against the expected financial results of the company. The salaries offered to these professionals at different stages of their careers are as follows:
Management accounting plays a crucial role in the strategic decision-making process of an organisation.
Internal auditors are hired by organisations to audit their company expenses. These individuals find potential areas of financial and legal risk. They communicate their findings to the stakeholders of the company.
The salary of internal auditors varies depending on their experience level. Let’s draw a comparison:
Corporate sector jobs: Corporate sector jobs are booming in today’s day and age. Here are the various corporate sector jobs for ACCA graduates:
Business analyst: These professionals are responsible for driving change in an organisation. They analyse the business by documenting the processes, assessing the business model, identifying vulnerabilities, and devising solutions.
Business analysts also work towards identifying issues in the IT process, organisational structure, or staff management. They plan the structure of the business using forecasting and budgeting tools. The salary offered to business analysts based on their experience level has been discussed below:
Chief financial officer: These professionals are senior executives of a company responsible for managing the financial actions of a company. They track the cash flow and carry out financial planning for the organisations. The CFO of an organisation plays a vital role in the strategic planning of the company.
However, you cannot directly become the CFO of a company. You must have prior work experience or higher education to be selected for this top-level managerial role. Being a part of the ACCA courseis going to be of great advantage to you. Let us see how the salary of a CFO varies with experience.
As the finance industry worldwide continues to evolve, the demand for ACCA graduates is going to rise. The ACCA course is your one-way ticket to a world of opportunities. It will allow to to explore several successful career paths in finance, both nationally and internationally.
ACCA professionals are sought after in many sectors of the world. They are mainly hired by financial organisations like banks, investment firms, and insurance companies. They are also in demand in the IT sector.
Will the ACCA salary in India increase?
The ACCA salary in Indiais going to increase in the upcoming years. This is because the financial landscape of India is becoming more complex. For this, the demand for professionals who can operate in multifaceted environments and have a strong understanding of finances is going to boom.
What skills does the ACCA course teach?
The ACCA courseis a well-rounded programme that teaches its members various skills that allow them to excel in various industries. Some of these skills are financial reporting and analysis, management and accounting, financial management, taxation, etc.
Why is ACCA considered prestigious?
The ACCA certification is globally accepted and valued in almost 180 countries. The course certification acts as a foundation for a global career in international financial companies. It is the most widely acknowledged accountancy qualification.
If you want to succeed in today’s dynamic business landscape, then enrol in the certified management accountant or CMA programme at the earliest. Notably, CMA certification offers professional benefits that are not available with a regular bachelor’s degree. Typically, the programme is pursued with a bachelor’s degree. Read ahead to know more about certified management accountants and how this certification can elevate your career.
Who is a CMA?
A certified management accountant not only explains ‘what’ behind the numbers, but also ‘why’. To be a CMA, one needs to register with the Institute of Management Accountants (IMA) and enrol in the CMA programme.
Further, candidates need to pass two exams, namely Financial Planning, Performance, and Analytics (Part 1) and Strategic Financial Management (Part 2) in order to gain the certification. It is to be noted that candidates need not appear and clear Part 1 before Part 2 of the CMA exam.
Available in hundreds of locations across the world, the CMA exam has three exam windows in a year. You can select an exam window depending on your preparation or knowledge gained.
While CMA certification offers many opportunities for career advancement, the average certified management accountant salary in India stands at Rs 11,00,000.
Who Should be a CMA?
If you are a financial or accounting professional who is looking forward to global recognition, career advancement or earning significantly higher, then pursuing CMA – an internationally recognised strategic thinking benchmark – can be a good idea. CMA candidates not only learn how to turn data into conversations, but also how to make important strategic business decisions using this data.
Advantages of Earning CMA Certification
Here are the benefits of pursuing CMA certification:
Business Opportunities: This certification equips candidates with the necessary skills needed to perform well and progress in any organisation, whether it is a regional business or a multinational company.
Career Advancement: Candidates with CMA certification are most likely to be preferred for a higher position. During the certification process, CMA candidates acquire the desirable experience and knowledge to reach an executive level, serving as financial analysts and chief financial officers.
Gain Credibility: With a deeper understanding of numbers and finances, CMAs enjoy better status and more credibility in organisations. They can explain the business better, answer corporate financial questions well, share advice on the overall situation and shoulder greater responsibility. Undisputedly, CMAs play a vital role in company operations.
Higher Earnings: CMA-certified professionals earn over 60% higher than their non-certified counterparts across the world, as per the data collected by the annual census.
International Appeal: While a college degree is essential for a good job in the finance or accounting sector, having CMA certification, whichis recognised worldwide, can help you easily bag opportunities in another country. Notably, CMAs in any country are known to have the same level of expertise. That is why employers don’t hesitate to bring them on board irrespective of the country.
Industry Opportunities: CMAs can add value to any industry because financial and accounting functions are available everywhere. From engaging in the alternative energy, healthcare, and transport sectors to the technology and artificial intelligence domains, career development opportunities are endless for CMAs.
Plethora of Positions: Pursuing the CMA programme offers a boost to professionals at all stages of their careers. Besides imparting necessary skills and knowledge, CMA certification gives candidates access to different career paths. CMAs can successfully play the role of financial analysts, accountants, operations managers and vice presidents. Additionally, they can work in different business areas like management accounting, finance, operations, sustainability, and technology. This flexibility not only brings opportunities to build a career but also enhances professional satisfaction.
Conclusion
When it comes to CMA career in India, businesses value their in-depth knowledge and strategic insight. And, this makes them indispensable assets for an organisation. If you want to acquire the CMA certification, then connect with Imarticus Learning.
The need for investment banking jobs has increased along with the growth of investment banking companies in India over the past several decades. Due to the rapidly expanding Indian economy and the entrance of international corporations, investment banks are crucial for managing transactions, providing money for projects, and supporting capital market activities.
The most prominent investment banking organisations, both locally and abroad, typically have access to the best personnel in the industry. They promise to compensate their employees appropriately as a result, providing some of the highest salaries in India. We will be concentrating on the top 10 investment banking companies in India in this article.
Global Investment Banking Companies in India
Global investment banks are well-represented in India. Some of the famous global investment banking companies in India are:
J.P. Morgan- Prominent for its expertise in securities markets, financial advice solutions, and mergers and acquisitions, J.P. Morgan maintains many locations around India. Founded in 2000, J.P. Morgan’s main office is located in New York, USA.
Goldman Sachs- This global giant is one of the best investment banking companies in India. They provide every service related to investing, such as financial advice, trading securities, and asset management. The headquarters of Goldman Sachs are located in New York, USA, and the company was founded in 1869.
Morgan Stanley- Morgan Stanley, one of the top investment banking companies in India, has made a big name for itself by putting mergers and acquisitions, raising funding, and financial restructuring first. The main office of Morgan Stanley is located in New York, USA, where it was founded in 1935.
Bank of America Merill Lynch- Bank of America Merrill Lynch is a major player in the Indian market, offering services related to mergers and acquisitions, capital markets, and corporate financing. Founded in 2009, Bank of America Merill Lynch is headquartered in North Carolina, USA.
Domestic Investment Banking Firms in India
There are several domestic investment banking firms in India. Some of the famous ones are:
ICICI Securities- ICICI Securities is an affiliate of ICICI Bank and offers services such as corporate equity investments, equity capital sectors, and mergers & acquisitions. With its headquarters located in Mumbai, India, ICICI Securities was founded in 1995.
HDFC Bank- One of the largest investment banking companies in India, HDFC Bank offers a variety of services such as financial market operations, project finance and advisory services. Mumbai, India is home to HDFC Bank’s headquarters, which were founded in 1994.
Kotak Investment Banking- The Kotak Mahindra Group’s Kotak Investment Banking branch specialises in securities markets, private equity transactions, and mergers and acquisitions. Mumbai, India is home to Kotak Investment Banking’s headquarters, which was founded in 2006.
Boutique Investment Banking Firms in India
Boutique Investment Banking Firms in India provide specialised services and cater to certain markets. Some prominent boutique investment banking companies in India are:
Avendus Capital- Presenced as one of the top investment banking companies in India, Avendus Capital focuses on cross-border mergers & acquisitions and private equity advice. Mumbai, India is home to Avendus Capital’s headquarters, which was founded in 1999.
o3 Capital- One of the best investment banking companies in India, this boutique firm specialises in private equity agreements, mergers and acquisitions, and funding for mid-market companies. Mumbai, India is home to o3 Capital’s headquarters, which was founded in 2007.
Spark Capital- Spark Capital, one of the prominent investment banking companies in India offers specialty banking and investment management services with an emphasis on the fields of technology, healthcare, and finance. Chennai, India is home to Spark Capital’s headquarters, which were founded in 2001.
Suggestions for Cracking Investment Banking Jobs
There are a lot of investment banking companies in India and getting a job in any one of them can be a real deal-breaker! It might sound quite challenging, but here are some tips that can help aspirants crack investment banking jobs:
Have in-depth knowledge of finance, business management, and current economic trends.
Be up-to-date with industry professionals and attend seminars to increase networking.
Focus on key skills like analytical thinking and Excel.
We have focused on some of the best global investment companies in India, domestic investing firms in India, and boutique investment banking firms in India in this blog. With the demand for investment banking companies in India increasing, enrolling in an investment banking course will be helpful for aspiring professionals. By studying the organisational structures of the top investment banking companies in India, and also focusing on their work culture and potential for promotion, an aspirant would gain the confidence to start working in this field.
Networking, and being aware of recent market trends are the keys to success in investment banking. Enrol in the Certified Investment Banking Operations Professional (CIBOP™) by Imarticus to launch a career in investment banking.
Frequently Asked Questions
How do venture capital and private equity companies work alongside investment banks?
Venture capital and private equity businesses are not the same as investment banks. While venture capital firms spend their cash in independently operated enterprises, investment banks serve as intermediaries or facilitators between publicly listed companies and other financiers.
What is the role of investment banks in India’s economy? Investment banking companies in India help organisations and governments raise capital by arranging transactions with financiers and other businesses. This is referred to as increasing market liquidity. The main way that liquidity helps the economy is by providing an infusion of capital.
What is the meaning of Mergers & Acquisitions? In general, the phrases “merger” and “acquisition” relate to the joining of two businesses. In an acquisition, two businesses buy one another; the acquired business remains controlled by the acquiring company and does not alter its name or organisational structure. A merger unites two businesses, which typically adopt an identical name.
How do investment banks earn? Typically, investment banks profit from the act of bringing together consumers and sellers in various marketplaces. Typically, fees are assessed on transactions based on the lender’s size and reputation. Banks will occasionally charge for their underwriting assistance.
The capital market plays a significant role in the economic development of a nation. It serves as a critical component of the financial system, facilitating the efficient allocation of resources and fostering economic growth.
By providing a platform for raising capital, the capital market enables businesses to expand, innovate, and create jobs while offering investors opportunities to earn returns on their investments.
If you’ve ever wondered how the economy grows or how businesses get the money they need to expand, then you’re in the right place. We’re diving into the functions of the capital market and how they play a crucial role in driving economic growth. But first, let’s start with the basics.
What Is A Capital Market?
A capital market is a financial market where buyers and sellers can easily engage in the trade of financial securities like stocks, bonds, and other long-term investments. It also provides a platform for companies to raise funds for expansion and for investors to purchase securities, potentially earning a return on their investments.
How Does A Capital Market Work?
A capital market works by facilitating the movement of money between investors who have capital and businesses that need capital.
Here’s a step-by-step look at how it operates:
Issuance of Securities: Companies issue stocks or bonds to raise money. This is known as the primary market.
Buying and Selling: Investors buy these securities with the hope of earning a return. The buying and selling of these securities happen in the secondary market.
Market Regulation: Regulatory bodies like the Securities and Exchange Board of India (SEBI) ensure the market operates smoothly and transparently, protecting investors from fraud.
Types Of Capital Market
There are two types of capital markets:
Primary Market
This is where new securities are issued. When a company goes public through an Initial Public Offering, it’s participating in the primary market. The funds raised go directly to the company.
Secondary Market
Here, existing securities are traded among investors. The company does not receive any money from these transactions. Stock exchanges like the Bombay Stock Exchange & the National Stock Exchange are examples of secondary markets.
What are the Features Of the Capital Market?
The capital market has several distinct features that make it vital for economic growth:
Long-Term Financing: It provides businesses with long-term funds, which are essential for expansion and development.
Liquidity: Investors can quickly buy and sell securities, making the market liquid.
Transparency: Regulatory bodies ensure that all transactions are transparent and fair, boosting investor confidence.
Price Determination: Through the forces of supply & demand, the capital market helps in determining the prices of securities, reflecting their true market value.
Diverse Investment Opportunities: Investors can choose from a wide range of securities, depending on their risk tolerance and investment goals.
What are the Key Functions of the Capital Market?
Now, let’s understand the core functions of the capital market and how they drive economic growth:
Mobilization of Savings
One of the primary functions is to channel savings from households and institutions into productive investments. Instead of letting money sit idle in savings accounts, the capital market enables individuals to invest in businesses, leading to higher returns and more robust economic activity.
Facilitating Investment
By providing a platform for the issuance of new securities, the capital market helps businesses raise the funds they need for expansion. This, in turn, leads to the creation of jobs, the development of new products, and overall economic growth.
Promoting Economic Efficiency
Capital markets help allocate resources efficiently by directing funds to businesses with the most promising growth prospects. This ensures that capital is used productively, leading to better economic outcomes.
Enhancing Liquidity
The secondary market aspect of the capital market provides liquidity to investors. They can easily sell their securities if they need cash, making investments less risky and more attractive.
Risk Management
Capital markets offer various financial instruments that help in managing and mitigating risks. Derivatives, for example, allow investors to hedge against price fluctuations, making the financial system more stable.
Why Understanding the Capital Market Matters?
Understanding the functions of the capital market is essential for anyone interested in finance or economics. Whether you’re an investor looking to grow your wealth or a business seeking to raise funds, knowing how the capital market operates can provide advantages.
The capital market is more than just a place for buying and selling securities. It’s a system that plays a crucial role. By facilitating investment, ensuring efficient resource allocation, and providing liquidity, the capital market drives economic growth and stability.
Opportunities for Growth
The capital market provides a platform where companies can raise funds by issuing stocks and bonds. For businesses, this means access to capital that can be used to expand operations, expand new products, or invest in innovation.
Investment Diversification
For individual investors, the capital market also offers a distinct range of investment opportunities beyond traditional savings accounts. Stocks, bonds, mutual funds, and exchange-traded funds allow investors to spread their portfolios, spreading risk across different asset classes and potentially increasing returns. Knowing how to navigate the capital market enables investors to build wealth over the long term.
Economic Indicators
The capital market serves as a barometer of economic health. Trends in stock prices, bond yields, and investor sentiment reflect broader economic conditions and can influence consumer confidence, corporate spending decisions, and government policy. By understanding these indicators, policymakers, economists, and business leaders can anticipate economic trends, mitigate risks, and formulate effective strategies to support sustainable growth.
Innovation and Entrepreneurship
Innovation thrives in an environment where capital is readily available to fund new ideas and ventures. Startups and entrepreneurs rely on the capital market to secure financing for groundbreaking technologies and disruptive business models. Understanding the capital market encourages entrepreneurship by providing insights into fundraising strategies, investor expectations, and market trends that can shape the success of new ventures.
Global Connectivity
The capital market transcends geographical boundaries, connecting investors and businesses on a global scale. International capital flows facilitate cross-border investments, mergers, and acquisitions, fostering economic integration and driving global economic growth. By understanding the interconnectedness of the capital market, individuals and businesses can leverage opportunities in international markets, diversify risks, and access a broader pool of investors.
The Final Words
The functions of the capital market are indispensable for a thriving economy. They mobilize savings, facilitate investments, enhance liquidity, promote economic efficiency, and help manage risks. Understanding these functions can empower you to make informed investment decisions and appreciate the broader economic landscape.
So, next time you hear about stock markets or bond markets, remember that they are not just about trading. They are powerful engines of economic growth, shaping the financial future of individuals and nations alike. Exploring a financial services course might be your next step toward a deeper understanding of this vital sector.
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Financial statement analysis is a fundamental aspect of business management and investment decision-making. It involves scrutinizing a company’s financial statements to understand its financial health and performance.
However, while this analysis can provide valuable insights, it also comes with its own set of challenges and limitations. In this blog post, we’ll explore the limitations of financial statement analysis and delve into some examples and types of financial analysis, as well as the tools and techniques used in this process.
Understanding Financial Statement Analysis
Before diving into the challenges, let’s briefly outline what financial statement analysis entails. This process typically involves examining three primary financial statements: the income statement, the balance sheet, & the cash flow statement. Analysts use various tools and techniques of financial statement analysis to interpret the data and make informed decisions. These tools include ratio analysis, trend analysis, and comparative analysis.
The Limitations of Financial Statement Analysis
Despite its importance, financial statement analysis is not without its flaws. A Financial Analyst plays a vital role in connecting business needs with financial strategies. This role involves conducting investment research, performing financial analysis, ensuring regulatory compliance, managing risks, and engaging in strategic planning.
Here are some key limitations to be aware of:
Historical Data
Financial statements are primarily based on historical data. They provide a snapshot of a company’s past performance but don’t necessarily predict future performance. This reliance on historical information can be a significant limitation, especially in dynamic industries where conditions change rapidly.
Subjectivity in Accounting Practices
Accounting practices and standards can vary widely between companies and industries. This subjectivity can lead to inconsistencies in financial reporting, making it challenging to compare financial statements across different entities. For instance, different companies might use different depreciation methods, which can significantly affect their reported profits.
Lack of Non-Financial Information
Financial statements focus on quantitative data and often overlook qualitative aspects that can influence a company’s performance. Factors like management quality, brand reputation, and employee satisfaction are crucial but aren’t reflected in the financial statements.
Inflation and Economic Changes
Money value fluctuations are not taken into account in financial statements. The true worth of assets and liabilities can be distorted by inflation, which can provide false conclusions. Moreover, broader economic changes and market conditions are not directly captured in financial statements.
Window Dressing
Companies might engage in “window dressing” to present their financial statements in a more favourable light. This practice involves using accounting tricks to make financial statements look better than they are, which can mislead analysts and investors.
Examples of Limitations in Financial Analysis
Let’s look at some real-world examples of limitations in financial analysis to illustrate these points:
Historical Data Example: A company in the technology sector might have impressive historical profits. However, if a new, disruptive technology emerges, the company’s future prospects could change dramatically, and historical data would provide little indication of this shift.
Accounting Practices Example: Two manufacturing companies may use different inventory valuation methods—FIFO (First In, First Out) and LIFO (Last In, First Out). This difference can result in significantly different cost of goods sold and profit figures, complicating direct comparisons.
Inflation Example: A company holding large amounts of cash on its balance sheet might appear financially stable. However, during periods of high inflation, the real value of this cash diminishes, affecting the company’s purchasing power and financial health.
Types of Financial Statement Analysis
There are various types of financial statement analysis that analysts use to gain insights into a company’s performance:
Horizontal Analysis: This involves comparing financial data over multiple periods to identify trends and growth patterns.
Vertical Analysis: This method looks at financial statements as a percentage of a base figure.
Ratio Analysis: This is perhaps the most common type of analysis involving the calculation of various financial ratios to assess liquidity, profitability, and solvency.
Trend Analysis:Using past data, this strategy forecasts future performance by looking at patterns across time.
Tools and Techniques of Financial Statement Analysis
To conduct thorough financial statement analysis, analysts use a variety of tools and techniques:
Horizontal analysis looks at financial statements over multiple years to spot trends. For example, you might compare sales figures from one year to the next to see if they’re going up or down. This method helps you understand how a company’s performance is changing over time by comparing its past performance.
In a financial statement, vertical analysis displays each item as a percentage of a base amount. You can see what percentage of sales are operating expenses, taxes, or profits. This method helps you compare a company’s internal performance and also benchmark it against other companies in the same industry.
Ratio Analysis
Ratio analysis is a popular tool for examining the relationships between different numbers in financial statements. Ratios can tell you about a company’s profitability, liquidity, and efficiency. Profitability ratios show how good the company is at making profits. Ratios make it easy to compare a company’s performance with others.
Graphical Analysis
Graphs and charts provide a visual way to look at a company’s performance over time. Line graphs, bar charts, & pie charts can help you quickly see trends & patterns in the data. This visual representation makes it easier to understand and compare financial information.
Trend Analysis
Trend analysis involves looking at how financial items change over time. By identifying trends, you can spot patterns and make predictions about future performance. This method is often used alongside ratio, horizontal, and vertical analyses to give a fuller picture of financial health.
Regression Analysis
It is a statistical tool used to understand the relationship between different factors. In financial statement analysis, it might involve looking at how sales are affected by other factors like the overall economy. This helps in making more informed predictions about future performance.
The Final Words
While financial statement analysis is a tool for evaluating a company’s performance and making informed decisions, it is essential to understand its limitations. The reliance on historical data, subjectivity in accounting practices, lack of non-financial information, effects of inflation, and potential for window dressing are all significant challenges that analysts must navigate.
By being aware of these limitations of financial statement analysis and using a variety of tools and techniques, analysts can make more accurate and insightful evaluations. Additionally, pursuing advanced education like the CFA course can further enhance one’s ability to perform sophisticated financial analyses.
Understanding these limitations helps in making more informed decisions and recognizing that financial statements are just one piece of evaluating a company’s overall health and prospects.
A Chartered Financial Analyst (CFA) charter is a highly respected credential in finance, showcasing deep expertise in finance and investments. This globally recognized qualification opens doors to diverse opportunities in finance careers. After completing the program, you can explore various paths in the finance sector.
The CFA program covers key topics like economics, investment analysis, accounting, and ethics. With its well-structured curriculum, the CFA course can significantly boost your career prospects. Imarticus Learning offers comprehensive training to help you achieve this prestigious designation.
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Navigating the world of financial accounting can be daunting, especially for beginners. However, understanding its core objectives can provide clarity and confidence. Financial accounting is the process of recording and reporting the numerous transactions resulting from business operations. This field is vital for businesses, investors, and regulatory bodies alike.
In this post, we will study the fundamental objectives of financial accounting, shedding light on its importance & how it serves as the backbone of informed financial decision-making. Let’s dive in and demystify the key goals that drive this crucial aspect of business finance.
What is Financial Accounting?
Financial accounting deals with summarizing, reporting, and analyzing financial transactions of a business. The main goal is to provide stakeholders, such as investors, creditors, and management, with clear and accurate financial information. This helps them make informed decisions about the company’s financial health and prospects.
Financial accounting follows a set of established principles that vary based on a business’s regulatory and reporting needs. Companies often have an accounting manual outlining these rules. In the U.S., public companies must adhere to generally accepted accounting principles (GAAP). These principles ensure consistent information is provided to investors, creditors, regulators, and tax authorities.
Financial accounting involves statements that cover five main types of financial data:
Revenues: This includes income from sales of products and services, as well as other sources.
Expenses: These are the costs involved in producing goods and services, including research and development, marketing, and payroll.
Assets: These are the properties owned by the company, both tangible (like buildings and computers) and intangible (like patents and trademarks).
Liabilities: These are the company’s debts, such as loans and rent.
Equity: This represents the company’s value if all debts were paid off & its assets were liquidated.
Nature and Scope of Financial Accounting
In simple terms, financial accounting is about keeping track of a company’s financial activities. This means identifying, organizing, summarizing, and systematically analyzing all financial transactions. It’s not just about keeping records; it’s also about explaining the business results to various interested parties.
The American Accounting Association (AAA) defines accounting as the process of identifying, measuring, and sharing economic information so that people can make informed decisions.
Financial accounting specifically deals with creating financial statements. These statements are used by decision-makers such as stockholders, suppliers, banks, employees, and government agencies.
Imagine you are running a business and keeping track of your money. There are five important rules that accountants follow to make sure all businesses do it the same way. These rules are important financial statements, which are reports that show how much money your business has coming in and going out.
The Objectives of Financial Accounting
Financial accounting serves several core objectives that are crucial for any business. Here are the primary goals:
Recording Financial Transactions
The first objective is to record all financial transactions systematically. This includes everything from sales & purchases to expenses and revenues. Proper recording ensures that all financial data is accurate and up-to-date, which is essential for preparing financial statements.
Summarizing Financial Information
Once transactions are recorded, the next step is to summarize this information into useful reports. Financial accounting helps create comprehensive financial statements, such as the balance sheet, income statement, and cash flow statement. These documents provide a snapshot of the company’s financial position at any given time.
Ensuring Legal Compliance
Businesses must adhere to various accounting standards and regulations. Financial accounting ensures that all financial reports comply with these legal requirements. This not only helps avoid legal issues but also builds trust with stakeholders.
Aiding in Decision Making
One of the most important objectives of financial accounting is to aid in decision-making. By providing accurate & timely financial information, it helps managers, investors, & other stakeholders make informed decisions. This can range from day-to-day operational decisions to long-term strategic planning.
Facilitating Financial Planning and Control
Financial accounting plays a crucial role in planning and controlling business activities. By analyzing financial statements, businesses can set budgets, forecast future financial performance, and implement controls to ensure that financial goals are met.
Protecting Business Assets
Proper financial accounting helps protect business assets. By keeping track of financial transactions, it ensures that assets are not misused or misappropriated. This is necessary for maintaining the financial health and integrity of the business.
What are the Advantages of Financial Accounting?
A shareholders’ equity statement shows how a company’s equity changes over some time, unlike a balance sheet, which shows equity at a specific moment. This statement explains why the value of the company has increased or decreased.
Financial accountants are like helpers who can show you how to use this rulebook and make these reports. They can help you understand your finances better and make good decisions!
Understanding the advantages of financial accounting can further highlight its importance. Here are some benefits that are important to understand:
Transparency and Accountability
Financial accounting brings transparency and accountability to business operations. It provides clear and accurate financial information that stakeholders can trust.
Better Financial Management
With detailed financial reports, businesses can manage their finances more effectively. This includes monitoring cash flows, controlling expenses, and optimizing revenues.
Improved Decision Making
Accurate financial information is crucial for making informed decisions. Financial accounting provides the data needed to evaluate business performance and make strategic choices.
Legal Compliance
Adhering to accounting standards and regulations is essential for avoiding legal issues. Financial accounting ensures that all financial reports meet the required legal criteria.
What is the importance of Financial Accounting?
The importance of financial accounting cannot be excessive. It forms the backbone of any business’s financial management. Here’s why it matters:
Providing Financial Information
Financial accounting provides vital information about a company’s financial performance. This information is crucial for stakeholders who need to understand how well the business is doing.
Assisting in Financial Planning
By analyzing past financial data, businesses can plan for the future. This includes setting budgets, forecasting revenues, and planning for growth.
Ensuring Operational Efficiency
Efficient financial accounting helps businesses operate more smoothly. It ensures that financial transactions are recorded accurately, which helps in maintaining operational efficiency.
Supporting External Reporting
Businesses need to report their financial performance to external parties such as investors, creditors, and regulatory bodies. Financial accounting ensures that these reports are accurate and reliable.
Facilitating Business Growth
Accurate financial accounting supports business growth by providing the data needed to make strategic decisions. This can include expanding operations, entering new markets, or investing in new products.
The Final Words
Understanding the objectives of financial accounting is essential for anyone involved in managing a business or personal finances. It’s not just about keeping track of money; it’s about ensuring transparency, aiding in decision-making, and planning for the future. By providing accurate & reliable financial information, financial accounting helps businesses thrive and grow.
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