Financial Analyst Job Description Guide

A Financial Analyst is a person who implements the fundamentals of financial analysis to evaluate the company’s position from the point of view of raising capital in the form of debt or equity, credit ratings, or budging. They are expected to analyze various scenarios including but not limited to current situations in the market, and come up with intelligent inferences.

For example, a ‘credit analystCredit AnalystCredit analysis is the process of drawing conclusions about an entity’s creditworthiness based on available data (both quantitative and qualitative) and making recommendations about perceived needs and risks. Credit analysis also involves identifying, assessing, and mitigating risks associated with an entity’s failure to meet financial commitments.read more’ in a bank is primarily responsible for deciding if a loan should be given (also called loan sanction by bank officers) to people who come to the bank to borrow money. Several factors are responsible for deciding if a person can get a loan from the bank.

You are free to use this image on you website, templates, etc., Please provide us with an attribution linkHow to Provide Attribution?Article Link to be HyperlinkedFor eg:Source: Financial Analyst Job Description (wallstreetmojo.com)

Factors to Get a Loan From the Bank

  • Whether the person who wants to borrow money is employed or not?If there is any other loan already taken by the person?

These are some of the many factors a ‘credit analyst’ takes into account before deciding on whether the bank should lend money or not.

Similarly, a ‘financial analyst’ is one who ‘studies’ a company and tries to make predictions about the company’s financial health in the future. As we mentioned earlier, an analyst has to look at multiple factors before making decisions. Similarly, a financial analyst also has several factors to analyze and understand before reaching conclusions about that particular company.

The foremost Financial Analyst job description is to study financial statements of companies. Just like we, as students, are issued grade cards by our school teacher with different grades for different subjects and an overall assessment of our year-round performance, companies also issue their financial statementsFinancial StatementsFinancial statements are written reports prepared by a company’s management to present the company’s financial affairs over a given period (quarter, six monthly or yearly). These statements, which include the Balance Sheet, Income Statement, Cash Flows, and Shareholders Equity Statement, must be prepared in accordance with prescribed and standardized accounting standards to ensure uniformity in reporting at all levels.read more, which consist of information on how they performed their businesses throughout the year.

Sample Job Description

Below is a sample Financial Analyst Job Description.

Financial Analyst supports and analyzes company financials monthly, quarterly, and annual and assists in preparing and forecasting the annual budget. Below are some of the key responsibilities of a Financial AnalystResponsibilities Of A Financial AnalystA financial analyst analyses a project or a company with the primary objective to advise the management/clients about viable investment decisions. They do a thorough financial analysis and make suitable objective projections to arrive at their conclusions.read more –

  • Support monthly and year-end accountingAnalyze business units’ performance every month and provide budget vs variance analysisVariance AnalysisVariance analysis is the process of identifying and analyzing the difference between the standard numbers that a company expects to accomplish and the actual numbers that they achieve, in order to help the firm analyze positive or negative consequences.read more as well as forecastsFinancial modeling resulting in forecastingFinancial Modeling Resulting In ForecastingFinancial modeling refers to the use of excel-based models to reflect a company’s projected financial performance. Such models represent the financial situation by taking into account risks and future assumptions, which are critical for making significant decisions in the future, such as raising capital or valuing a business, and interpreting their impact.read more of revenue, expenses, headcounts, balance sheet, and cash flowsmonitor the key financial metrics of the companyperform performing ad-hoc analysis and new project break-even analysisBreak-even AnalysisBreak-even analysis refers to the identifying of the point where the revenue of the company starts exceeding its total cost i.e., the point when the project or company under consideration will start generating the profits by the way of studying the relationship between the revenue of the company, its fixed cost, and the variable cost.read moreProvide key business analysis and strategic recommendations on pricing, investment, make vs. buy, ROI cost reduction, and controls.Assist in due diligence and identification of business acquisition targets

Key Qualifications

  • Typically a graduate-level course in Accounting & Commerce, Finance is necessary.Candidates with Engineering background/STEM courses are preferred as they have quantitative and programming skills.Candidates from Business Schools with a specialization in Finance have an advantage as they can read financial statements easily, be aware of different accounting practicesDifferent Accounting PracticesAccounting practice is a set of procedures and controls used by an entity’s accounting department to keep track of accounting records and entries. Other reports are generated based on accounting records, such as financial statements, cash flow statements, fund flow statements, payroll, tax workings, payment and receipts statements, and so on, and they form the basis of the auditor’s reliance while auditing the financial statements.read more, and understand market conditions more easily.Stronghold on Statistics-forecasting techniques, risk modeling, Value At Risk calculationsApplied Mathematics and Economics knowledge- to analyze current economic conditions and predictions for future economic indicatorsMathematical modeling for in-depth data analyses using traditional and advanced methodsA Financial Analyst is expected to have good presentations and communication skills.

Skills

Here is the list of top skills and knowledge that a Financial analyst must possess –

  • Working knowledge of MS-ExcelKnowledge of database management systems is required to store data.Hands-on Experience in VBA-MacrosKnowledge of accounting proceduresAccounting ProceduresThe accounting procedure is the process of standardized nature that performs a specific accounting function designed to incorporate better risk management policies to complete these functions efficiently. It includes billings, invoices to suppliers, bank reconciliation, requiring comprehensive and streamlined procedures.read more and financial reporting practicesAbility to design dashboards showcasing information in the data; one should work on software like PowerBI.Financial Modeling in excelFinancial Modeling In ExcelFinancial modeling in Excel refers to a tool used for preparing the expected financial statements predicting the company’s financial performance in a future period using the assumptions and historical performance information.read moreStrong command of English and good conversational skillsAbility to swiftly coordinate amongst different departments of an organization which may all be using data stored by him, reports generated by him, or recommendations made to the senior managementEnsure timely communication of results/reports to key personnel within the organization as well as clients

Conclusion

In conclusion, as a financial analyst, one is responsible for showcasing the company’s report card to various stakeholders. In addition, one is also responsible for making future predictions on where the company analyzed its business. In the end, it can be seen that a financial analyst needs to have different skill-sets for different financial analyst jobs for graduates like financial statement analysis, database management, modeling, predictions, and report writing.

This has been a guide to the financial analyst job description. Here we looked at who a financial analyst is, the full details of its job, key skills you should possess as a financial analyst, and the qualifications you must possess as a financial analyst. You may also have a look at these articles below to learn more about corporate finance –

  • Top 4 Career in Financial PlannerForensic Accounting CareersSkills for Personal Banker JobCFO Job DescriptionTop 10 Finance courses