Being a financial analyst is one of the most popular career paths in finance. This is largely because analysts can work in a range of industries and also because the field has some great benefits, including a high earning potential. If you’re a business or finance major, a financial analyst role is definitely worth considering. Even if you’re not currently majoring in a related discipline, you might be interested in finding out more about this role and deciding whether it could be a good fit for you.
Here are some of the key things you need to know about being a financial analyst.
Who are Financial Analysts?
Financial Analysts are professionals equipped with knowledge in financial courses (Statistics, accountancy, economics etc.). They are trained to use accounting and stat tools like modeling, projections, regressions etc to conduct a deep analysis of any organization or project and predict the financial future on the basis of the evaluation. They primarily work with numbers.
Financial analysts need a thorough knowledge of macro-economy, they also need to crunch the data to understand and dissect the company’s financial numbers. For maintaining a good knowledge base, they have to invest time in reading financial papers, books, news, blogs etc. A Financial analyst with a strong fundamental base and understanding of trends in the current financial environment is a blessing to any organization. Financial Analysts are proficient in excel modeling, constructing business plans, calculating present values of future cash flows etc. You can also take help from financial experts like Mark Attanasio and Donato Sferra who are working as Financial Services Executive in Toronto and has helped many business owners
Creating business plans is a very dynamic process which involves calculating business and financial risk, ratio analysis and growth patterns on the basis of sale projections of future and scrutinizing past outcomes.
What Do Financial Analysts Do?
Financial analysts are primarily responsible for creating financial models that can predict the outcome of certain business decisions. In order to do this properly, they need to aggregate a large amount of financial data while also taking in account factors like financial market trends and past transactions of a similar nature. Because the role can be quite different depending on where an analyst works — for example an analyst at an investment bank will be much more focused on assisting with deals and mergers that one working for an insurance company — the industry an analyst chooses to go into defines their day-to-day responsibilities. Overall however, analysts play a significant part in providing decision-makers with the information they need to increase revenue and manage assets successfully.
Benefits of Hiring a Financial Analyst-
Having a Financial Analyst is a must these days, as business evolution needs that you are crunching your numbers regularly. Financial analysis is not only about financial reporting. The analyst will also focus on financial analytics and take a 360-degree view of the business based on actual data and support you. The Financial Analyst will help you answer questions like:
- Should you invest in the new project?
- What is the cost of acquisition of customers from different sales models?
- What is the Return on Investment?
- What is the exact profitability of your business and different divisions?
- Where is cost cutting possible in your startup?
- Benchmarking your numbers with your competitors.
- Does your business need an investor for expansion or would internal cash flows suffice?
Financial Analysts are well trained to read between the lines while reading numbers. Having expertise in projections, they can use data to get to factual positions. The goal is to create actionable insights.
Data is the new oil. But data in itself is just a bunch of numbers. How your financial analyst processes them to give you insights will be a game changer for your business. For any organization, be it a startup or an MNC, making appropriate use of data is the key to success.
Making sense out of numbers is critical and investing in monthly financial analysis is critical to ensure that your organization is moving in the right direction.