What is a Financial Analyst and How do you Become One?

April 25, 2017

If you see yourself as a person working in the financial services industry, Financial Analyst should then be your chosen field, as it is one of the most revered titles in the finance industry.

A Financial Analyst is essentially a person who performs financial analysis at a micro and macro level to understand the health of an organisation and further give suitable recommendations. They also suggest a course of action, which would be something like recommendations on buying or selling a company stock based on its current and predicted strength. It is expected of the analyst to be aware of the current developments in the field in which he or she specialises, as well as having the ability to prepare financial models that predict future economic conditions across possible variables.

One of the key responsibility of the financial analyst is not only to manage financial data but also to summarise them through a presentation, reports and statistical analysis.

The financial analyst job is much like the financial planner; most times you would see a financial analyst is working very closely with the financial planner to come to some conclusions related to investment choices. Although it is important to note that the job of a financial analyst calls for a higher level of expertise. It is more holistic and demands certain specific skill sets.

Financial analysis is done in a structured manner which primarily covers fundamental analysis, ratio analysis, financial modelling and valuation.

We can divide the role of financial analyst into two parts, those who work on the Buy-Side and those who work on the Sell-Side. An analyst on the buy side works with companies that have money and need help with investment strategies. People on the sell side help the companies price and sell their products, these companies are usually investment banks and securities firm.

Research suggests the financial analyst job sector is predicted to grow by 15.5% in the decade spanning the year 2012-2022. That figure alone predicts close to 35000+ jobs in the US alone. A financial analyst can play many roles and execute multiple responsibilities. Investment analyst, money market analyst, mergers and acquisition analyst, budget analyst are but a few recommendations.

So how do you get started?

To begin with, if you have a majored in computer sciences, biology, physics or even engineering, you are already in the favorable pool. It is easier for people from these backgrounds to start at an entry level position. If you are an MBA graduate it would be possible that you start as a senior analyst. A degree in Business administration, accounting, finance or statistics gives a springboard to your growth within an organisation, although it is not a prerequisite to being an MBA to become a financial analyst.

To become a successful financial analyst one needs to be proficient in a wide variety of skill sets, they might include-

Financial modelling, it is a mirror that shows if an organisation is in need of additional funds, analysing and defining the risk level. Basically, it is a tool, an abstract model of a real world financial situation. There are various valuation and forecast theories that exist and the financial analyst is able to recreate events in an interactive calculator referred to as a financial model. Accounting skills, the flexibility with numbers is a prerequisite. Knowledge about the equity research goes hand in hand to create an entire package. But most importantly the ability to connect with people, to be able to translate your financial finding in the right way, through the right tools is also a must. Being fluent in your soft skills does not only mean the ability to communicate, but also the ability to use excel and PowerPoint to your advantage.

If you are a beginning or an MBA graduate or a major from any field, there are many certified institutions which offer comprehensive courses that help you acquire a detailed understanding of the role and also provide with experiential learning methodologies in close association with the industry experts, thus giving you the backing required to excel in your chosen field. They also help you with placements as they are well connected with firms who have need of such professionals.

A career in financial analyst offers financial security, it also gives you the opportunity to help in shaping the finance industry. So if this interests you, then it is recommended to get the required skill sets and get started.
Imarticus Learning is India’s leading professional education institute, offering certified industry-endorsed training in Financial Services, Investment Banking, Business Analysis, IT, Business Analytics & Wealth Management.

Imarticus Learning is offering the Financial Analysis Prodegree, in association with EY as the Knowledge Provider, It is a skill-building programme covering accounting, financial modelling, business valuation and equity research.
Through the programme, the participants gain knowledge which helps them to build a career across a wide variety of roles in corporate finance and investment banking.

The Imarticus Learning Career Services and Placements team provides you guidance and assistance throughout the program, giving you the best career opportunities in leading international firms.

 


 

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