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Tag: financial analysis certification

What are Disadvantages and Advantages of Financial Statement Analysis?

Posted on by Imarticus Learning

Companies choose different processes to be profitable, safely increasing their productivity. One of the safest ways is the analysis of financial statements; its use makes it easier to respond to possible problems. The advantages of financial statement analysis in a company include the fulfillment of the business plan, such as better communication within the company and increased productivity.

The objectives of financial analysis is to generate financial statements that are true statements of the company’s health. Financial documents and statements must be prepared and published on a yearly, quarterly, biannual, and monthly basis.

What is Financial analysis? 

Financial statement analysis covers a company’s operational budget, assets, expenses, liabilities, earnings, and the net worth of liabilities and assets. Financial analysts, accountants, and planners use these statements to enable decision-making expansions, future planning, fundraising, and market launches among others. However, there are bound to be some disadvantages too. Let us explore them.

Financial Analyst course

Advantages of Financial Statement Analysis 

Pattern Detection and forecasting: The importance of financial analysis lies in its ability to reveal earnings per year, sales, and profits accrued. Though sales figures may vary, financial planners will be in a position to find a correlative pattern over a few years of sales data. Take the example of a company that may reveal a trend of sales increases whenever new products are marketed and released. Sales could drop after, let’s say, a year of the product launch. The advantages of financial statement analysis are huge for companies, as it forecasts a market life of about a year, which is useful as it shows sales patterns for product launches, a sales drop after a year, and a need for new products in a year.

Budget Outline in Real-Time: Decision-making for planning the future, budget estimations, corrective actions required for efficient budgeting, and more such decisions are some of the aspects that add to the importance of financial analysis. One of the advantages of financial statement analysis is that it reveals how much you can spend on marketing or product launches, strategizing for marketing campaigns, future expansions, and requirements for funding. 

Disadvantages of Financial Analysis 

Based on the patterns of the market: A big disadvantage of financial statement analysis and use for making strategic decisions is that it is based on figures and data on current market conditions, which may fluctuate. Past performance is a good indicator and motivator. It cannot, however, guarantee fluctuations and future demands. A cautious approach is needed as part of the objectives of financial analysis for the interpretation of financial ratios and statements to prevent excessive risk-taking based purely on forecasts.

Analysis of At-One-Time basis: As the name suggests, the forecast and analysis are applicable at that time only. It does not reveal or compare the past performance or future forecast at one glance. One will need to exercise caution by generating and reporting continuously rather than on a one-time basis. Such extrapolation of data and financial analysis undertaken frequently is crucial to the company’s health and decision-making abilities.

Why study financial analysis?

Consider getting a finance certification so that you will understand the advantages of financial statement analysis better.

Course skills and requirements

A graduation degree or even a Master’s in Finance goes a long way. Add relevant certifications. Those from a non-financial background can also take these courses, as most offer boot camps to understand what is financial analysis.

Course advantages: The course offers a good grasp of basics, concepts, theoretical knowledge, practical skills, and finance certifications that could help enhance your resume and career.

What is Excel Data Financial Analysis?

Posted on by Imarticus Learning

Stakeholders bank on Excel to perform technical calculations or yield basic accounting ratios. Companies, on the other hand, can leverage Excel to perform risk analysis, capital budgeting analysis or discount cash flows. Moreover, options traders generally utilize Excel to perform Black-Scholes pricing. There are myriads of standard financial analysis frameworks that could be done via Excel. Also, there are some courses for financial analysis certification that can aid use Excel for various finance-related purposes.

Excel for Finance Experts

For those pursuing a career in financial analysis, extensive working knowledge of Excel and proficiency in general Excel features are quite worthwhile. Data, of any kind, can be entered and processed, as far as it is calculable.

While it can be unfeasible to have a firm grip on every function of Excel, it is important to know the approach to do functions that are essential for a particular analyst job. You can go for a technique similar to the 80-20 rule to your Excel purposes, that is, 80% of your outcome might be a result of 20% of your Excel shortcuts and functions.
Some of the common financial analysis features are pivot tables, data manipulation, lookup, formatting, and valuation equations.

Excel for Stakeholders

Stakeholders run financial analysis in either of the two major methods. The first method relies on data received from the financial statements (fundamental analysis) of an organization that can deliver Excel with the core elements for advanced equations. The second method emphasizes on probabilities, charting, and if-then analysis, which is the technical analysis.

For fundamental analysts, excel has proved to be more fruitful. Technical analyses usually depend significantly on interactive charts that are simpler to utilize and keep up-to-date swiftly via actual technical charting software in lieu of Excel.

Excel for Consultants and Accountants

At times, financial analysis is associated with repeating existing data rather than forecasting future data. For consultants and accountants, Excel can manage functions for amortization, depreciation, budgeting, and taxes.
Excel, by nature, offers itself to cost accounting owing to its excellent flexibility quotient. In contrast to financial accounting, which contains strict rules and a relatively standard approach, cost accounting must be adjusted to align with the individual requirements of the company.

In addition to this, Excel can monitor, upgrade and deliver information in a way that permits enhanced business decision making.

Using Excel Efficiently

Preparing a number of financial documents for various clients for various reasons is a time-prohibitive process. The actual issue is not creating multiple financial reports, but the approach of financial documentation and the technique utilized, which is burdensome and outdated.

A majority of organizations still rely on Excel spreadsheets. It is a surprising fact that organizations with multi-million or billion-dollar returns depend on Excel spreadsheets for their financial analysis & reporting.

Although Excel can be used to create financial budgets or reports or forecasts, their accuracy remains a question. It is easy to commit mistakes while creating reports using Excel and equally hard to check them.

The situation achieves another level of toughness when a larger number of people enter data into the same spreadsheet as this exposes you to problems like if someone by mistake entered incorrect data or on which version everyone did their updates on.

This problem is again intensified when you have to extract data that is required for report generation and later maintain all these Excel spreadsheets. Eventually, you end up spending a considerable amount of time in verifying the numbers to make sure it follows the correct data as well as to ensure the links and formulas are accurate.

In such a situation, going for cloud-based budgeting, reporting and planning software would be a great fit to make Excel perform financial analysis & reporting efficiently. It is an approach which business professionals are aware of and implies that when they login to the software tool, they can either enter their inputs on the web or via Excel add-in.

Which Are Some of The Good Books On Financial Analysis For The Purpose Of Equity Valuation?

Posted on by Imarticus Learning

Pursuing a financial analysis course, currently working in the finance team of a firm or looking to make a career in the finance domain- it is important to gain complete knowledge of valuation and finance before working in the market. There are undoubtedly many sources to learn about valuation, however, if you prefer reading a book rather than attending a seminar or webinar, then here is a list of top books on valuation.

1. The Intelligent Investor by Benjamin Graham
Long considered as one of the most important books written on investing and valuation, the book has great quotes from the author that motivate you into a career in finance. If you have enrolled in a Financial Analyst Certification course, then this book is a must read to enlighten you about the strategies that will help you reach your goals.

The concepts of value investing are explained in detail and most aspects of technical trading have been covered in the book. The book is the Bible of Finance and must adorn your bookshelf if you are thorough finance professional.

2. Theory of Investment Value by John Burr Williams
The book first printed in 1938, revolves around the idea that stocks are worth the present value of the dividends that are paid perpetually. The book highlights the investment value of a stock as the net present value of the future dividends it will reap. It features the highly popular, Discounted Cash Flow technique, which is the edifice of business valuation whilst making investment decisions. Warren Buffet, the reputed investor was highly impressed by the book and the book features two major principles- the intrinsic value of a business can be taken out of discounted value during the course of its lifetime and a business that can afford to invest it’s earning at a higher rate than the applied discounted rate if it can afford to.
3. Measuring and Managing the Value of Companies by McKinsey & Company Inc
One of the best guides for corporate valuation, the book has been co-authored by Tim Koller, Marc Goedhart and David Wessels. The book solidifies the proven principles of value creation by negating the myths that prevail in the financial world.

The book equips executives to make a value-creating decision with case studies that analyze the historical performance of a company and then redrafting it to take a closer look at the performance. The book covers the topics of linking a company’s valuation multiples and estimating the cost of capital with practical tips. A must-have for investment bankers and investors to make pragmatic decisions.
4. Damodaran on Valuation: Security Analysis for Investment and Corporate Finance by Aswath Damodaran
A gifted professor and an authority on valuation, Aswath Damodaran delves deeply into three basic approaches to valuation which are discounted cash flow valuation, relative valuation, and contingent claim valuation. The book is filled with real-time examples of many international firms that deepen your understanding of the advantages and disadvantages of every model to help reader’s judge complex valuation scenarios.

5. Equity Asset Valuation by John Stowe
The book is a good read because of its coverage of finance and accounting concepts with every topic treated in detail for the benefit of the reader. It is good for students who want to strengthen their concepts of valuation before stepping into the finance domain. Most examples used to make it useful for finance students to learn the concept of implementing intrinsic stock valuation.

How Do You Become a Financial Controller?

Posted on by Imarticus Learning

Are you great with number crunching and have excellent organizational skills, then this job should be what you are aiming at! A financial controller makes the most important decisions in the business with regard to the finances of the company. A trustworthy job as you will be handed the financial reins of the control of inflow and outflow of cash, you will definitely see the positive impact that your hard work will make on the company’s turnover and growth.
Some previous experience as an accountant or in a similar role of managing finance is a prerequisite to be considered for the job of a financial controller. The job demands a high level of knowledge, skill, dexterity, confidence, responsibility, and accountability. If this sounds like the path, you want to take read on to find out more about the roles and responsibilities, prerequisites, salary, hours of work and more.
What does a Financial Controller’s job entail? Are you cut out to embark on a career in that domain. Well as a financial controller you will be responsible for the accounting operations of the company and reporting to the Finance Director. Preparing financial reports, documenting accounts, corporate accounting, budgeting, forecasting- you will be involved in every aspect of the organization that remotely requires money. You will be managing the financial transactions of a company right from accounts payable to payroll. Irrespective of which industry you work in- every company needs a Mathematics wizard to manage their finances and with an interest and a financial analyst course you could be on the right path to becoming a Financial Controller.
You could complete a finance or accounting degree for e.g., Bachelors in Commerce or Bachelors in Business Management with a specialization in finance which would take you about years. You could also earn a Master’s degree to have an added advantage. If you do not want to take the university route, you can learn by enrolling in a Financial Analyst certification course offered online. Your employer may fund this for you while you train to become an accountant, and then you can work your way up the ladder. Financial Analysis courses in Hyderabad offer great study options for those who want to move progressively towards becoming a Financial Controller.
There is good news for those aiming to be Financial Controllers- it is a typical 9-5 job with weekends and bank holidays to yourself depending on the organization. Qualified financial controllers can earn anywhere between Rs 15,00,000 – Rs 35,00,000. The range could be higher depending on the size of the company and the experience of the candidate.
Once you gain a degree or even experience in accounting or a financial position, it is important to leverage your expertise and build your supervisory skills to become a Financial Controller. Being in control of finance means solving complex issues, dealing with pressurizing situations with an analytical mind. It is important to be exceptionally organised to meet deadlines and comply with regulations. Your primary responsibility will be to see the “bigger picture” and the financial health of the organization rather than just day-to-day numbers.
If you have your sights set on this role, then just get yourself a role in accounting or finance, get certified with a qualification, work hard and learn the ropes to prove yourself worthy of single-handedly managing the funds of a company.

What Do You Need To Learn To Become A Financial Analyst?

Posted on by Imarticus Learning

What Do You Need To Learn To Become A Financial Analyst?

The job role of a financial analyst needs a very thorough study of theory and the applicability of principles to practical situations. The best option is to do financial analysis courses and earn the CFA Certification.

Course Skills and requirements
A graduation degree or even a Master’s in Finance goes a long way. Add certifications that are relevant. Those from a non-financial background can also take these courses as most offer boot camps to bring you to speed.
Non-transferable skills will also need to be developed and aligned with the enterprise’s needs. You must have the following traits.

  1. Interpersonal Communication skills
  2. Ability to solve problems creatively.
  3. Collaborative team skills
  4. Ability to work with ambiguity, pressure, and demands from the startup environment.
  5. Discipline and integrity since you will be working on financial transactions.
  6. A good learner as there may be no standard operating procedures in financial interpretations.

Course advantages:
Depending on your career plan, resources, specialization choices, and eligibility here you can choose your certification. These have different prerequisites in terms of educational background, experience, and examinations taken to be finally added on to your resume. All of them provide you with a well-defined skill set meant to ensure you are industry ready and have the required skill sets.

The courses offer a good grasp of basics, concepts, theoretical knowledge, practical skills and certifications that could help enhance your resume and career. They also offer boot camps, short term workshops, and knowledge valuable to enter the industry. Another advantage in such a course is of mentoring by certified and experienced industry aces that helps garner the latest best practices, techniques, skills, and practice on the latest trending technologies in the financial industry.

While CFA certification definitely helps, you will need to be an excellent communicator and work diligently to acquire the best analytical and business skills. You will definitely need to add on technical skills in DevOps, IoT, Python, Machine Learning, Big Data, and Hadoop to aid your role and understanding as Financial Analyst.

Topics covered:
Here is what topics the financial analytics training courses cover. The course topics are covered in detail with case studies, practice assignments and quizzes.

  • How to use Excel
  • Undertake data analysis and manipulation in Excel
  • Basics and concepts in accounting
  • Analysis of financial statements
  • Inferences and forecasting methodology from financial statements
  • Valuation of business from financial analysis data
  • Dynamic and flexible financial model making
  • Data visualization charts in Excel creation and presentation
  • Accounting statements preparation for any company
  • Create balance sheet, cash flows statement and income statement from the basics onwards.
  • Ratio analysis from company financials preparation and interpretation
  • Using a framework to compare different companies financial performances
  • Creation of  financial models that are forward-looking and integrated
  • Forecast, extrapolate financial ratios which are forward-looking
  • Discounted Cash Flows application and techniques of valuation on an actual company performance data
  • Apply valuation technique of Multiples to a real-world company data
  • Presentation enhancing tools like PowerPoint

Conclusion:
A Financial analyst has to have a gamut of traits besides training which can be acquired through online refresher courses and extensive research. The importance of continued learning can never be stressed enough. Once you have your skills in place and your certification to validate you are industry ready, act on taking your skills to the next level.

What Careers Can You Have After Private Equity?

Posted on by Imarticus Learning

Private Equity is often hard to get into and means they have careers in the same field for an average of 25 to 30 years. Would they have careers if they decide to move? Let’s explore their options.

 1. Hedge fund choices:
Many PE professionals get bogged down by the frustrating pace and sheer tedious tasks of administration. It takes lots of time to succeed at making deals and more longer to make substantial profits.

No one becomes an overnight millionaire in PE. You wait for a good 5-10 years. That’s when the choice of moving towards hedge funds makes sense and is more lucrative. There exist similarities between PE and hedge funds which makes the junior levels can make a quick switch.

2. Venture capitalist ventures:
Few of the PE professionals find lack of excitement in large deals and seek out investments in performing start-ups and land up switching to funds like VC. A focus on Media, Healthcare and Technology sectors causes the movement to VC favored segments such as these.

3. Own fund launching:
This dream of many sees these professionals launching out with their own. This is more so in the case of senior PE professionals with excellent performance records and good networks of clients.

4. Portfolio/ Corporate Company migration:
Continuously helping portfolio companies to propel growth PE professionals do decide to be employed with a portfolio company in senior positions like CFO, CEO, Business Development Head and so on. Besides being lucrative, you get company stock which makes huge profits when the exit of the fund is successful. The private equity skill-set can be effectively used in corporate finance and strategy with any company.

5. Return to consulting roles:
PE consulting strategy or investment banking is a choice you can fall back on when unhappy for any reason such as poor and failed fundraising, redundancy, unsustainable economic environment, or just that it is still a lucrative choice.

6. The Fund of Funds- Secondary funds: 
PE professionals often leave to gravitate to fund of funds or secondary funds companies. The secondary funds form funds that buy portfolio companies using PE funds at steep discounts directly. The PE funds need liquidity for various reasons like exiting a particular sector or closing rapidly. The Funds of funds are mostly funds that place funds in PE companies rather than company investments.

7. Entrepreneurship is a choice:
Private equity professionals turn out to be highly entrepreneurial as they continuously generate viable business ideas at some point most likely when they are at junior levels. Private equity is a good starting point for becoming an entrepreneur. The networking opportunities and learning chances are awesome.

PE is truly the holy grail of financial professionals, and it makes sense to explore whether they do have choices if they decide to move. Such options and knowledge is why you should do a financial analysis course.

The courses offer a good grasp of basics, concepts, theoretical knowledge, practical skills and certifications that could help enhance your resume and career. They also offer boot camps, short term workshops, and knowledge valuable to enter the industry. Another advantage in such a course is of mentoring by certified and experienced industry aces that helps garner the latest best practices, techniques, skills, and practice on the latest trending technologies in the financial industry.

Consider professionals who know about careers in financial analysis and can mentor you effectively.