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 organisation, they are responsible for analysing financial statements and forecasting future performance of a company.
This career choice not difficult and is also one of the lowest levels in financial careers
If you must stand out in this profession, it is of uttermost importance that you know and understands the job description of a financial analyst.
Therefore, it is necessary that you carefully read this free guide on a financial analyst job description.
What does a financial analyst do?
Financial analyst holds a very vital position in any organisation, they play an integral part in the financial planning and analysis department of a business.
They are responsible for predicting possible future revenue and expenditure as well.
A financial analyst is also involved in budgeting as well as modelling capital structure
These professionals are also responsible for carrying out market research, and also monitoring a business’s financial plan.
By doing this, they are not only able to predict future performance but also analyse the variance between the forecast and actuals.
This way, they can also identify the reason for the variance.
These reports are presented to stakeholders and the information from it is used to make strategic business plans.
A financial analyst is also responsible for forecasting possible risks and developing a plan to avert or manage it.
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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
It is the duty of a financial analyst to analyse, evaluate and compare past and present financial data.
By so doing, they are able to monitor trends and avoid past mistakes
2. Preparing and presenting financial reports
Financial analyst carries out market research, monitor trends, forecast future performance and calculating variance between forecast and actuals.
After doing all of these, the prepare, present and interpret these information to stakeholders.
3. Assist stakeholding to develop feasible business plans.
They also consult with stakeholder to make business plans in which their information from their reports are taken into consideration.
The aim of these business plans is to improve business growth.
4. Come up with innovative policies and initiatives that can improve a business financial growth
It is also the duty of a financial analyst to come with innovative policies and initiatives.
These policies should be targeted at improving business growth.
5. Financial modelling
Financial analyst analyses 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 as well as records are accurate.
- Compare actual results with forecasted performance.
- Identify reasons for variance in forecast and actuals.
- Give financial recommendations to businesses.
What academic qualification do I need to become a good financial analyst?
The basic requirements for becoming a financial analyst is a bachelor’s degree in financial management, economics or any other related fields.
Employers also look out for those with proficiency in Microsoft Office suite and financial modeling tools.
It is also necessary for a prospective financial analyst to possess strong business acumen.
Typically, employers look out fore those with at least 3 years experience 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 qualification, 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 include:
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 involves the knowledge you need to effectively work in finance.
It includes basic knowledge of mathematics, accounting principles, calculating 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.
For financial analyst is relevant in the development and maintenance of a good relationship with investors and colleagues as well.
4. Technical skills
Oftentimes, the financial analyst makes use of accounting and book keeping software.
Therefore having a good knowledge of the use of some of these skills for financial analysis makes the work easier.
Some of such software include SQL, SAP and Hyperion.
This skills also play a relevant part in being able to quickly learn how to use new software.
5. Problem-solving skills
Not all problem solvers are a financial analyst, but every financial analyst should be a good problem solver.
They should be capable to solve a financial equation as well as figure out 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 posses all 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 funds and resources as well.
8. Organisational skills
This is a soft skill that comes to play when a financial analyst is required to organise records and financial data.
Therefore, every financial analyst should be organised and detail-oriented.
9. Critical thinking skills
Oftentimes, 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 in order to solve financial problems.
Critical thinking is not only important in solving problems, it also helps financial analyst make big and serious decisions.
As well as come with innovative plans and policies that can improve business growth.
10. Analytical skills
This skills helps financial analyst give accurate forecasts, solve financial problems and prioritize activities.
As you can see, it’s importance cannot be overrated.
Some prospective financial analyst posses and exhibit practically all of these skills.
Whereas, other 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 financial analyst make?
In the United States, the salary of financial analysts range from $48,000 to $152,000 per year.
On the average financial analyst makeup to $80,000 per year.
These figures may differ depending on your geographical 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 every information relevant enough 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 making reference to your skills and experiences.
Types of financial analyst
There are different types of financial analyst, and their duties, responsibilities and skills may vary slightly.
Here are some of the types of 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 mix industries, and products that suits a business portfolio.
- Rating analyst: ratings analyst analyse and evaluate the possibility of a company to pay off debts and loans.
- Risk analyst: they analyse and evaluate 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.
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