It is the job of the financial analyst to use data from the company\u2019s financial statements and records to understand and analyze the strengths, weaknesses and financial position of the company. For example, debts being serviced, the revenue stream flow, capital investments and current position to invest, operational efficiency, future profits and more.<\/p>\n
1. Financial statements:<\/strong> 2. Working Capital Statement:<\/strong> 3. Comparative statements:<\/strong> 4. Analysis of ratios:<\/strong> Data is the backbone, and a lot depends on the type of decision-making involved, the inferences drawn from data in the financial records and how you analyze the information and use it for constructive feedback and financial analysis. The software used is a crucial tool and should provide customizable, clear and concise analysis.<\/p>\n Of the many software, the Stock Screener by Finviz and Customized Financial Analysis by BizBench are popular with investors. Cloud tools for management, reporting software, etc. are widely used by accountants and bookkeepers, and Managers\/ analysts favor SWOT analysis providing the software.<\/p>\n Software like Balanced Scorecard can help assess the current position, overall return, capital financing, operating income, analysis of specific firm processes and performance history.<\/p>\n EPM Financial Reporting by Prevision is also popular and rated high as a tool for management of enterprises, report books maintenance and for being able to analyze and combine real-time data from IT with information on accounting.<\/p>\n SAS, QlikView, and MATLAB are preferred for financial analysis that is customizable and includes tools for statistical analysis in its sophisticated software. It is an excellent tool for traders, analysts, and programmers.
\nThe company income statement and balance sheets reflect the losses or profits over a time period. The assets, liabilities, capital position and such data are crucial to plan and ensure success.<\/p>\n
\nChanges in the working capital can be tracked from the current liabilities and assets in comparison to the previous year. This is a crucial decision making factor in planning and evaluation.<\/p>\n
\nSize statements of multiple companies at any point helps with understanding the current position vis-\u00e0-vis the industry.<\/p>\n
\nThis is a great way to arrive at the asset management, debt management, liquidity, market value, profitability, and financial performance of the various departments and business parts.<\/p>\nWhy tools help:<\/strong><\/h3>\n
Popular Software for Financial Analysts:<\/strong><\/h2>\n
\nMicrosoft Excel and its VBA macro tool is the foundational tool for beginners and those who use small and less complex functions.<\/p>\n