Want To Become A Financial Analyst?

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Let us first understand the meaning of financial analyst in simple way

A financial analyst is a professional, responsible for activities like gathering data, organizing information, analyzing historical results, making forecasts and projections, making recommendations, and generating  various Excel Reports, presentations, and reports. 

   

Key Role and Duties of Financial Analyst:-

1. Analyze financial results

This typically includes looking at ratios and metrics like gross margin, net margin, fixed vs. variable costs, year-over-year (YOY) growth rates, return on equity (ROE), return on assets (ROA), debt/equity ratio, earnings per share (EPS), and many others. The analyst will look for trends and benchmark the performance against other companies in the same industry. 

When asking what does a financial analyst do, this is one of the biggest components!

2. Forecasts and projections

Second role is to projects and forecasts about the company 

There is both an art and a science to predict how a company will perform, and many assumptions and even leaps of faith have to be made. Common forecasting methods include regression analysis , year-over-year growth rates, as well as bottom-up and top-down approaches.

3. Develop recommendations and suggestions

A good financial analyst is not only good with numbers but actually generates insights and recommendations on how to improve the operations of a business. 
Examples of helpful recommendations and insights include ways to cut costs, opportunities to grow revenue, ways to increase ma, operational efficiencies, customer satisfaction, and much more. This is what truly separates a world class financial analyst from the rest. 
These recommendations will be presented to the top mangement CEO, CFO other executives, and/or the board of directors.


4. Gather data and information

It includes gathering/analyzing past/historical financial reports , accounting data from the general ledger, stock price information, statistics and macroeconomic data, industry research, and just about any other type of quantitative data. The information will be gathered from sources such as the company’s internal databases, third-party providers such as Bloomberg or Capital IQ, and government agencies 

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