Financial Analyst: Explore The World of Finance

“Personal finance is only 20% head knowledge. It’s 80% behaviour! – Dave Ramsey”

Have you ever heard someone saying “Number is my playground”? That might describe a Financial Analyst! If you are thinking about a career in the Finance sector then becoming a Financial Analyst might be the best option for you.

It is all about playing with numbers and making sensible decisions about money matters. It helps the business thrive in today’s competitive world. But before you dive in, let’s take a peek at what this job’s all about, the exciting paths you can take, and the kind of salary you can expect.

As per the U.S. Bureau of Labour Statistics, Financial Analyst employment is going to grow near 8% between the year 2022 to 2032 which is faster than the average for all occupations.

Now let’s dive into the world of Financial Analysts, exploring what they do, where they work, and how much they earn.

What is Financial Analysis?

In simpler terms, Financial Analysis is a way of looking at financial decisions to understand business performance. It usually involves responsibilities such as analysing financial statements, income statements, balance sheets, and cash flow statements to check money flow in the company.

By researching these numbers, Financial Analysts can find the trending spots which help to identify strengths & weaknesses. It leads the company to make informed decisions to improve the business. Financial Analysis helps people & organisations to present complex financial data in simple terms so that they can make calculated decisions about their money.

It is like taking a close look at the engine of a car to see if it is running smoothly or needs some fixing up.

What Does a Financial Analyst Do?

If you are looking to work as a Financial Analyst, you will be helping the business and investors to make money-related calculated decisions. You will study about data like company accounts, sales figures, and market trends to understand the company’s needs.

You will use the given information to make recommendations, like whether the organisation should buy or sell stocks and where they should invest. You will also create reports and presentations to explain your findings to clients.

Overall, Financial Analysts are like detectives, investigating financial clues to help people make smart decisions about their money.

How to become a Financial Analyst?

If you want to become a Financial Analyst, you must have a bachelor’s degree preferably in Economics, Finance, or Statistics. Having other degrees like Accounting, Mathematics, or even Biology and Engineering can be beneficial for you if you are thinking about any specific industry.

Certification to Pursue

You can consider taking the Series 7 and Series 63 exams if you are not an MBA or Economics major. You might need a sponsorship from a FINRA member firm or regulatory body for Series 7. The Securities Industry Essentials exam was introduced in October 2018 by FINRA. It aims to streamline entry into the securities industry. On the other hand, the CFA exam is complex. If the CFA seems daunting, you can start with the SIE and work up.

Moreover, you should have some necessary skills such as:

• Quantitative Skills: You should have the ability to work with numbers, analyse financial data, and perform complex calculations.

• Problem-Solving: You should have the capability to identify issues, find solutions, and make decisions based on financial analysis.

• Communication: You should have proficiency in conveying findings, writing reports, and presenting information effectively.

• Financial Knowledge: You should have an understanding of financial principles, markets, accounting practices, and investment strategies.

• Analytical Thinking: You should have the capacity to critically evaluate data, identify trends, and draw meaningful conclusions.

Job Roles and Functions in Financial Analysis

• Financial Analyst: As a Financial Analyst, you will conduct financial analysis by examining financial statements and market trends. You will have to keep an eye on economic indicators to assess the performance of companies or investments.

• Investment Analyst: As an Investment Analyst, you will be evaluating investment opportunities and performing risk assessments. You will make recommendations to Portfolio Managers or individual investors.

• Budget Analyst: As a Budget Analyst, you will be responsible for developing, analysing, and monitoring budgets for organisations. This will extend to forecasting revenues and expenses and identifying variances.

• Risk Analyst: As a Risk Analyst, you will be Identifying and analysing potential risks facing organisations, developing risk management strategies, and implementing measures to mitigate risks and protect assets.

• Financial Planning Analyst: As a Financial Planning Analyst, you will assist individuals or organisations in developing financial plans, setting financial goals, and creating strategies to achieve long-term financial objectives.

• Corporate Finance Analyst: As a Corporate Finance Analyst, you will support corporate finance activities such as capital budgeting, financial planning and analysis, financial modelling, and investment decision-making.

Job Roles with Salaries in Financial Analysis

Job Role	Estimated Average Salary (per annum)
Financial Analyst	INR ₹5.8 Lakhs
Investment Analyst	INR ₹10.6 Lakhs
Budget Analyst	INR ₹5.6 Lakhs
Credit Analyst	INR ₹8.1 Lakhs
Risk Analyst	INR ₹7.4 Lakhs
Equity Research Analyst	INR ₹10 Lakhs
Financial Planning Analyst	INR ₹9.1 Lakhs
Corporate Finance Analyst	INR ₹7 Lakhs

Source- AmbitionBox

Takeaway

Financial Analysts play a vital role in ensuring the smooth flow of money in our economy. Their expertise helps businesses make smart investments, banks assess risk effectively, and individuals plan their finances wisely. So, the next time you see a graph or chart in a financial news report, remember the invisible hand of a Financial Analyst working behind the scenes!