What does a Financial Analyst Do?

The main role of a financial analyst is to review the historical financial and operational data of a business and the industry in which it competes, and use this information to estimate the firm’s future sales, profits, and cash flows. An extension of this work is predicting the return on investment if an investor were to acquire the securities of the organization.

The financial analyst position is accountable for reviewing larger investment proposals for return on investment, investigating a variety of internal financial and operational issues, and staying abreast of industry conditions and competitor activities.

Principal Accountabilities

Investigate operational and financial results and make recommendations for improvements
Conduct cost-benefit analyses
Review capital budgeting proposals and make acceptance recommendations to management
Investigate the nature of company bottlenecks and report on their operational status
Review indicators of business activity published by the government and trade associations
Create forecasts of future business conditions using multiple scenarios
Review and recommend different types of investments based on risk and return analysis
Stay abreast of developments in those industries in which the company operates
Prepare and periodically update an analysis of the industries in which the company operates
Prepare and update competitor analyses
Create financial models using electronic spreadsheets
Create PowerPoint presentations summarizing the results of analyses and present the results to senior management

Financial Analyst Experience Requirement

You may hire financial analysts with no experience, as long as they have strong educational backgrounds in business administration, a strong working knowledge of electronic spreadsheets, and a detailed knowledge of how to interpret financial statements. However, a senior financial analyst should have at least three years of direct experience.

Desired Qualifications

A masters degree in business administration or finance, with exceptional electronic spreadsheet construction skills and a working knowledge of statistics. Must have excellent communication and writing skills.