FINANCIAL ANALYST

Career Track

• A Financial Analyst is responsible for doing research on variousprojects and figuring out if they are worthwhile to attempt fromthe company‘s perspective. Their day to day activities includeanalyzing various asset classes, estimating their financialperformance, determining profitable investments which will addvalue to the shareholders of a company.

• The designation of a financial analyst is also commonly known asInvestment Analyst, Securities Analyst, Research Analyst, andEquity Analyst.

What is a Financial Analyst?

What is normally mentioned in a Financial Analyst Job Description?

Here is a list of the activities a Financial Analyst engages in:• Researching and evaluating current and historical financial data& then

forecasting financial performance based on drivers• Studying economic and business trends• Examining a company's financial statements to determine its financial

health and intrinsic value• Meeting with company officials to gain better insight into the company's

prospects• Assessing the strength of the management team• Creating charts, graphs and preparing reports to share investment and risk

information with management• Monitoring the company’s current investments and the present economic

climate• Recommending individual investments and collections of investments, which

are known as portfolios• Meeting with stakeholders to explain the recommendation

The duties in the job description of a Financial Analyst will strongly vary depending on their specialty and the type of company they work for.

Let’s have a look at what companies look for while hiring a financial analyst

Essential Duties and Responsibilities:1. Analyze, research and report on individual companies through various sources

including SEC filing, company information and other research sources.2. Assist in maintaining and monitoring various investment related software

including investment performance reporting, portfolio management and trading software, requiring specialized knowledge of Green Hill, Scorecard. Fi360, Investor’s View, Tradeweb and others.

3. Prepare reports and communication, as necessary to support the division. Maintain various guidance Lists as required. Prepare required reports for outside audiences including regulators, committees and clients.

4. Manage and exercise sound decision making regarding assigned clients investment portfolios.• Direct purchases and sales in accordance with company policies and

client directives.• Administer asset mix in accordance with company policies and client

directives.5. Assist in managing and executing securities trading for division including

stock, bonds and mutual funds.6. Provide research support to the investment team and attend investment

committee meetings

M&A Advisory Financial Modeling & Pitch Decks Plus

What companies look for while hiring a financial analyst?

• Financial (Income and Cashflow) Modeling• Pitch Decks• Financial and Growth Strategy• Business Valuation Projections• Shareholder cap Table• Prep Pre-Speed, Seed, A Round, A Round• Unlimited Earnings Potential to $500k• Some Travel Required • Host Workshops and Classes• Public Speaking• Flexible Lifestyle • Advocate on Behalf of Small Business, Entrepreneurs and

Startups• Main Street To Lower Middle Markets $250 to $20 Million• Help Business Scale• Deliver Trusted Advisory Services and Solutions

Let’s have a look at what companies look for while hiring a financial analyst

Responsibilities:• Work across numerous teams and functions in order to prepare

and maintain in-depth analysis, modeling, forecasting and reposting of financial and business performance to support company-wide financial and operational goals and initiatives.

• Inform decision-making and strategic planning activities, serve as a key resource to senior decision-makers in the business.

• Design, implement and manage processes and procedures to ensure accuracy and thoroughness of financial and business performance data that is the required foundation for effective finance analysis

• Assist with the preparations (internal and external) of financial and operational business results and analysis.

• Assist with special projects.• Other financial/operational analysis and duties as needed.

Who posts Financial Analyst Jobs? (Who hires a Financial Analyst?)

Financial Firms

Non-Financial Firms

Consultant

Financial Firms are at the top when it comes to hiring financial analysts (for obvious reasons).

• Financial Analysts work for banks, investment banks, funds (pensions, mutual, hedge), insurance companies, KPOs, asset management firms, private equity firms, stock broking firms, family offices, etc.

• Financial firms can also be classified as Buy-side and Sell-side firms. Buy-side firms are the side with the money, they

buy securities, buy research, buy analysis.Examples: Insurance companies, mutual funds, hedge funds, nonprofit organizations with large endowments, etc.

Sell-side firms are the side that sell/promote/market securities, sell research, sell analysis.Examples: Investment banks, commercial banks, stocks brokers, etc.

Who posts Financial Analyst Jobs? (Who hires a Financial Analyst?)

The next segment of employers is made of non-financial firms, in non-financial firms; the revenue model is not related to finance or investment.

• A Financial Analyst is also hired in non-financial firms like telecom, media, retail, manufacturing, trading, power, etc.

• They are hired directly in the Finance department of such firms or by the investment division/arm of such firms.

• Financial Analysts play a pivotal role in every area of the business by putting together important Information to make favorable decisions and develop new strategies.

Financial Firms

Non-Financial Firms

Consultant

Who posts Financial Analyst Jobs? (Who hires a Financial Analyst?)

Consulting: The smallest segment is project wise hiring where financial analysts offer their expertise on a freelance or an independent consulting basis.

• Financial Analysts can also opt for fruitful career opportunities in consulting.

• This path broadens their income opportunities and grants them the luxury of choosing the company and the type of assignment. They work for themselves rather than other individuals or firms.

• They can consult on a project basis, hourly basis, or even maintain full-time commitments, depending on the situation.

Financial Firms

Non-Financial Firms

Consultant

What are the important Financial Analyst Skills?

Just like a good chef needs to know the difference between salt & sugar, the right time it takes to cook, a little less time: you don’t want to eat it, a little more time: you don’t want to eat it.

Similarly, if you want to be a good Financial Analyst then you need to be good at the following:

• Comprehensive Financial Modeling (Creating models from scratch,

populating historical data ->creating schedules -> determining assumptions -> forecasting data -> profitability evaluation)

• Extensive Financial Analysis (Top Down and Bottom Up approach)• Trend Analysis (Past, Present, Future)• Valuation Tools including Discounted Cash Flow Method, Relative

Valuation, Precedent Transaction, Net Present Value, Internal Rate of Return, etc.• Report Writing (Pitch books, initiation reports, result updates, info memos)• Presentation (Company profiles, investment summary, dashboard)• Microsoft Suite (Particularly in Excel, VBA, Word, PowerPoint)• Operating database systems like Bloomberg Terminal, Thomson One etc.• Programming languages like SQL, R, Python, etc.• Visualization software like Power BI, Tableau, etc.

Let’s have a look at some cases where these skills show up.

✔ Heavy experience with Microsoft Excel, with knowledge of macros and VBA, preferred✔ Corporate finance or financial modeling experience✔ Detailed oriented, resourceful, inquisitive and ambitious✔ Ability to effectively manage, consolidate and analyze data from multiple, disparate data sources

✔ Experience with modeling and reading financial statements are mandatory.✔ Exceptional Excel skills required, experience with IBM Cognos/TM1 and Bloomberg preferred, VBA skills a plus

✔ Experience in the related field i.e. financial analysis and reporting✔ Fluent In Excel and PowerPoint✔ Experience with Adaptive Insights and SOL a plus

✔Must have a thorough knowledge of financial statements, accounting principles/concepts, financial modeling, application of analytical tools, and variance analysis.✔Must have proficiency in Microsoft Office Suite. Access skills are a plus.✔Must have advanced skills in Excel, including pivot tables and financial modeling.✔ Proficiency using ERP financial systems required. MS Dynamics preferred.✔ Ability to successfully perform independent, in-depth analysis, and generate concise conclusions.✔Must have excellent oral/written communication, presentation, and organization skills.

✔ PowerBl /Tableau, SQL experience a plus✔ Financial Modeling/Valuation experience a plus

✔ Competence in financial concepts such as IRR, NPV, and DCF modeling✔ Proficiency in Microsoft Office Suite or other relevant technologies✔ Strong verbal and written communication skills

What are the qualities needed to be a Financial Analyst?

Yes, I know this question sounds like the last one but it’s different. Financial Analysts are number-driven individuals who should be comfortable gathering, arranging, and interpreting data and making recommendations based on their analysis.

So, you need to hone up the following qualities:

• Math - Financial Analysts apply numerous mathematical concepts when determining the value of a financial investment.

• Analysis/Evaluation - This quality is so important that it comes in the name. They need to study from economy to industry to company to security, from past to present to future, from potentials to risks, etc.

• Detail Oriented - They need to have an eagle eye as small matters/variables can have large implications on the feasibility and health of an investment.

• IT/Computer - They have to be fluent in using software packages to analyze financial data, understand trends, make forecasts, create portfolios, rebalance weights, review performance, etc.

• Decision Making - They provide recommendation based on their analysis and research which then helps the company to make a well-informed decision. But, it’s up to the management whether they act on their recommendation or not.

• Communication - They must explain their recommendations to their seniors and clients in a clear and concise manner which can be easily understood.

What is the educational qualification for a Financial Analyst?

• In order to be eligible for your first job as a Financial Analyst, you need to have a Bachelor’s Degree.

• There are several fields of study that will offer your appropriate preparation like Finance, Accounting, Economics, Commerce, Math, and Statistics.

• However, to further improve your employability, chances of advancement and knowledge, you will have to pursue your MBA or complete popular and in-demand certifications like CFA.

• An advanced financial analyst position generally requires an MBA degree with an appropriate subject focus or a master's degree in finance.

• Employers often recommend the Chartered Financial Analyst (CFA) certification from the CFA Institute. Financial analysts can become CFA certified if they have a bachelor's degree, 4 years of qualified work experience, and pass three exams.

• The Financial Industry Regulatory Authority (FINRA) is the main licensing organization for the securities industry. A license is generally required to sell financial products, which may apply to some financial analyst positions.

• If you have not done your MBA or your CFA, then it would be advisable to appear for the Series 7 and Series 63 exam as they demonstrate an intermediate level of understanding of investment and accounting concepts.

How much a Financial Analyst can make?

• The average pay for an entry level Financial Analyst starts from USD 50,000 per annum (pa).• Financial Analysts in Investment Banks get paid much higher. The range starts from USD 100,000 – USD

125,000.• As per the Bureau of Labor Statistics (BLS), the median salary for a Financial Analyst is USD 85,500 per

annum.

Highest 10%USD 160,000 pa

Median SalaryUSD 85,500 pa

Lowest 10%USD 50,000 pa

• The Bureau of Labor Statistics projects 11% employment growth for financial analysts, faster than average as compared to other occupations.

• Due to high demand and less supply, many finance professionals are now looking forward to becoming a finance analyst to up their pay scale & advance in their career, at a much faster pace.