The overall aim of the job description of a financial analyst is to determine the best use of resources to achieve business goals.
Financial analysts work in the business department of an organization; they are responsible for analyzing financial statements and forecasting a company’s future performance.
This career choice is not difficult and is also one of the lowest levels in financial careers.
If you must stand out in this profession, you must know and understand a financial analyst’s job description.
Therefore, it is necessary that you carefully read this free guide on a financial analyst job description.
What Does a Financial Analyst Do?
Financial analysts are vital in any organization; they are integral to a business’s financial planning and analysis department.
They are responsible for predicting possible future revenue and expenditure as well.
A financial analyst is also involved in budgeting and modeling capital structure.
These professionals are also responsible for conducting market research and monitoring a business’s financial plan.
By doing this, they are not only able to predict future performance but also analyze the variance between the forecast and actuals.
This way, they can also identify the reason for the variance.
These reports are presented to stakeholders; their information is used to make strategic business plans.
A financial analyst is also responsible for forecasting risks and developing plans to avert or manage them.
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What are the Duties and Responsibilities of a Financial Analyst?
Here are some of the duties and responsibilities of a financial analyst commonly featured in a financial analyst job description guide:
#1. Analyse Past and Present Financial Data
A financial analyst must analyze, evaluate and compare past and present financial data.
By so doing, they can monitor trends and avoid past mistakes
#2. Preparing and Presenting Financial Reports
Financial analysts conduct market research, monitor trends, forecast future performance, and calculate the variance between forecast and actuals.
After doing these, prepare, present, and interpret this information to stakeholders.
#3. Assist Stakeholding in Developing Feasible Business Plans.
They also consult with stakeholders to make business plans to consider the information from their reports.
These business plans aim to improve business growth.
#4. Come up with Innovative Policies and Initiatives that can Improve a Business’s Financial Growth
A financial analyst also has to come up with innovative policies and initiatives.
These policies should be targeted at improving business growth.
#5. Financial Modeling
Financial analysts analyze and evaluate financial data.
After which, they develop financial models for the business.
Some other duties and responsibilities of a financial analyst commonly featured in a financial analyst job description include:
- Work closely with the accounting team to ensure that all financial reports and records are accurate.
- Compare actual results with forecasted performance.
- Identify reasons for variance in forecast and actuals.
- Give financial recommendations to businesses.
What Academic Qualifications Do I Need to Become a Good Financial Analyst?
A bachelor’s degree in financial management, economics, or any other related field is the basic requirement for becoming a financial analyst.
Employers also seek those proficient in Microsoft Office suite and financial modeling tools.
It is also necessary for a prospective financial analyst to possess strong business acumen.
Typically, employers lookout for those with at least 3 years of experience in business finance or other similar fields.
Although not mandatory, a master’s degree in economics, accounting, financial management, or other relevant fields is preferred.
Employers may also prefer employing those with up to 5 years or more experience.
Improving your qualification and having more years of experience will also play a vital role in determining your pay.
What Skills Does a Good Financial Analyst Need?
Aside from academic qualifications, duties, and responsibilities, a financial analyst job description also contains certain skills.
Possessing these skills makes one stand out in this career path.
These skills are usually a combination of both soft and hard skills.
Some of the skills a good financial analyst must have included the following:
#1. Communication Skills
This skill is relevant when speaking with investors and/or stakeholders about financial information.
It can greatly influence interpersonal skills as well.
As a result, a good financial analyst should be able to communicate in writing and verbally.
As one, you should be able to relate technical and non-technical financial information.
Also, communication involves listening as much as it involves speaking. Therefore, a good financial analyst should also be a good listener.
#2. Accounting skills
Accounting skills involve the knowledge you need to work effectively in finance.
It includes basic knowledge of mathematics, accounting principles, calculating a budget, cash flow management, cost analysis, and reduction, bank statement reconciliation, and general ledger.
There is certainly no way a financial analyst can succeed without these skills.
#3. Interpersonal Skills
Interpersonal skills are required in practically every career path.
Financial analysts are also relevant in developing and maintaining good relationships with investors and colleagues.
#4. Technical Skills
Often, the financial analyst makes use of accounting and bookkeeping software.
Therefore having a good knowledge of using some of these skills for financial analysis makes the work easier.
Some such software includes SQL, SAP, and Hyperion.
These skills also play a relevant part in learning to use new software quickly.
#5. Problem-Solving Skills
Not all problem solvers are financial analysts, but every financial analyst should be a good problem solver.
They should be capable of solving a financial equation and finding a good solution to a company’s financial problems, such as debt.
#6. Leadership Skills
A financial analyst may be the head of the financial department or team.
Therefore, it is also important for them to possess all the necessary leadership skills.
#7. Management Skills
This is very similar to leadership skills.
A good financial analyst should be able to manage not just humans but also funds and resources.
#8. Organizational Skills
This soft skill comes into play when a financial analyst is required to organize records and financial data.
Therefore, every financial analyst should be organized and detail-oriented.
#9. Critical Thinking Skills
Often, critical thinking and problem-solving skills are combined.
But they are not the same. In as much as a financial analyst needs to be a critical thinker to solve financial problems.
Critical thinking is not only important in solving problems, it also helps financial analysts make big and serious decisions.
As well as develop innovative plans and policies that can improve business growth.
#10. Analytical Skills
This skill helps financial analysts give accurate forecasts, solve financial problems and prioritize activities.
As you can see, its importance cannot be overrated.
Some prospective financial analysts possess and exhibit practically all of these skills.
Whereas others may need to improve on them.
Here are some tips on how to improve financial analyst skills:
- Sincerely Identify areas that need improvement.
- Set realizable goals.
- Make maximum use of available tools and resources.
- Attend seminars and training that will add value to you.
How Much Does a Financial Analyst Make?
In the United States, the salary of financial analysts ranges from $48,000 to $152,000 per year.
On average financial analysts make up to $80,000 per year.
These figures may differ depending on your location, experience, and employer.
Where Does Financial Analyst Work?
A lot of businesses and companies require the services of a financial analyst.
But, some of the typical employers of financial analysts include:
- Insurance companies
- Manufacturing companies
- Telecommunications companies
- Healthcare sector
- Management and consulting agencies
What Should I Include in My Financial Analyst Resume?
When creating a resume, you should include relevant information to convince an employer that you are suitable for the job.
You may want to improve your skills, experience, and qualifications.
Your skills should be highlighted in your resume and cover letter as well.
During the interview, it is not wise to underestimate the importance of referring to your skills and experiences.
Types of Financial Analysts
There are different types of financial analysts, and their duties, responsibilities, and skills may vary slightly.
Here are some of the types of the financial analyst:
- Fund managers: they are in charge of managing funds. They make buy and sell decision-based on analysis.
- Portfolio managers: portfolio managers supervise and support analysts to pick out a mix of industries and products that suit a business portfolio.
- Rating analyst: Rating analysts evaluate the possibility of a company paying off debts and loans.
- Risk analyst: they analyze and evaluate the risk associated with investments
Conclusion: Financial Analyst Job Description Guide
This guide on the job description of a financial analyst is optimized to help applicants seeking a job as a financial analyst.
But, it can also be used by employers to create a financial analyst job description posting.
Other job descriptions;