It has been mostly observed that skills are the basic indeed for any particular goal you have set for and thus these skills are likely to be known. Skills play a vital role in developing a structure to your way towards success and thus looking after them must be the foremost priority of each and every individual. Some skills are naturally into you and some of them need to be generated by giving some attention to them.
Table of Contents
- Who are financial analysts?
- What does a Financial Analyst do?
- What are the top Financial Analyst skills?
- These top skills are basically divided into three main categories:
- Let us look at some top financial analyst skills to be a world-class financial analyst.
Who are financial analysts?
Finance is something without which business cannot work and thus the need of the financial analyst is the most basic need of every businessman. Financial analysts are those people who are involved in analyzing financial data and help as a decision-making body.
These financial analysts are basically categorized into three types:-
- Buy-side firms – This sort of analyst is mainly known for helping their employees and clients in how to invest their money by buying stock, security, real estate, etc. and thus help the users in fund management. The investors have huge money or capital and thus need an analyst or advisor to guide them thoroughly.
- Sell-side firms – These types of people are basically involved in creation, promotion & greater security to the party in need. They also involve in banking & advisory firms so that they can help their client up to the best as possible.
- Investment Banks – In this type the analyst is more concerned about the right investment for their client so that they can help them achieve the needs they want from their investment.
What does a Financial Analyst do?
There is no single and straightforward answer to explain the role of the financial analysts as they work in a vast variety of fields and thus due to this their day-to-day work can be different at different job roles. These analysts basically work in the financial industry or work in investment banking in buy-side firms or sell-side firms and also are widely spread in every sort of industry functioning in a data analyst role and initially focus on the financial situation of the business.
Financial Analyst analyzes the financials of the company with the help of different tools and other options in need. They analyze what had happened in the past and spent time collecting deeper information about that specific department indeed into the role. It is also important for an analyst to see why such areas are over-performed and thus helps them to carry forward in the right way and sets an example for the rest of the organization to work upon and improve the analysis from that of the previous data.
The first focus on what happened and then search for the reason of exceptional why. They compare the actual results with the forecasting results and thus try to make out things in a more accurate way. Financial Analyst also looks at the outside data from that of their company and thus helps them to make a decision. It can be about the industry or economy of the country and thus gets help from the outside indicators.
Forecasting of the data is most important as it helps to compare the data from that of the previous once and thus makes it easier in analyzing the data, from this data the analyst set the future trend which helps the organization in a well-organized manner.
Reporting is the most key aspect of the financial analyst, it depends on the decisions that need to be made and the level up to which the information needs to be shared. Most of the financial analysts are also expected to provide recommendations to the organization on the basis of the changes needed to be done for better future aspects.
These are some information and data that helps to know in brief about the job-role of a financial analyst so that it might help to get an idea towards the skills which must be indeed in a financial analyst.
What are the top Financial Analyst skills?
These top skills are basically divided into three main categories:
Accounting & Finance knowledge
Problem solving, logic & design
All these three come together to set-up very unique skills to make you the best analyst.
Let us look at some top financial analyst skills to be a world-class financial analyst.
- Accounting Skills: It is important to have a solid understanding of accounting principles and also must have a basic idea about Accruals, Revenue recognition & non-cash items such as depreciation & amortization. You need to have enough knowledge about understanding financial statements and must know to dissect them.
- Excel skill: You must be very good at using excel as it helps save time and makes the model as soon as possible. It helps to perform calculations and financial analysis very quickly.
- Linking three financial statements: These sort of skills helps compare historical statements together and then directly link them into the excel sheet so that they can be easily be sorted out as per the model.
- Forecasting Skills: With the help of regression analysis future predictions can be done with respect to that of the previous data. The management team and cultural team must also take part in the decision-making body.
- Problem-Solving Skills: The analyst must have the capability to solve and think logically in a well-organized manner so that things sort out in a very simpler and systematic way. It’s important to follow a logical flow of information so that the data is easily understood by different learners.
- Attention to detail: The analyst must be a keen learner and must have attention and focus on each and every model in use.
- Simplification of complex information: The analysts are mostly known for simplifying things in a very easy manner, they can also distill complex models in a very simpler way with their great skills.
- Design skills: The analyst must be keen on noticing design and aesthetics. A good model must be easily followed, have clear information, and gives a professional look.
- Presentation skills: The analyst must have good presentation skills to put up points and make understand others in a very simpler manner.
- Detail vs High-Level strategy: A good analyst has the ability to easily zoom into extreme levels and quickly zoom out to high-level business strategy.