What Does a Finance Analyst Do?
Finance analysts are responsible for identifying business trends and opportunities, providing company leaders with information they require for making decisions. It can be an engaging yet fulfilling career path.
Financial analysts can be employed by various industries, including banks, investment firms, insurance companies and securities firms. Your daily responsibilities and tasks depend upon which field or industry you decide to work in.
Gathering Data
Finance analysts gather and organize information in order to support effective decision-making. Using structured data they create objective projections and evaluate financial outcomes. Their role requires staying abreast of market trends, economic conditions and industry information.
Finance analysts tasked with collecting data often begin by assessing and understanding where their quantitative information comes from – whether that means internal databases, third-party providers or any other means. This may include accounting data from general ledger accounts, stock price information, statistics on macroeconomic factors or industry research among many other things.
Financial analysts utilize various applications, software programs and programming languages such as Microsoft Excel, SQL Server, Python and Tableau in order to perform their duties effectively. These applications allow them to collect large volumes of data quickly and analyze it before visualizing their findings.
Finance analysts often pursue careers in business analysis and valuation or investment banking as their career evolves, often earning master’s degrees along the way and becoming senior members of their organization.
Analyzing Data
As a finance data analyst, your primary responsibility will be collecting and analysing raw data in order to create detailed reports for your organization. You’ll be responsible for reviewing historical financial statements, recognizing trends and projecting future performance.
Understanding standard accounting techniques and statements will allow you to analyze a business’s financial health effectively. A bachelor’s degree in accounting or another related discipline is usually sufficient; however, earning either a master’s or professional certification could further boost your career opportunities.
As part of communicating findings internally, creating reports and dashboards are another integral task. Excel skills will come in handy here in terms of cleaning, sorting, and structuring data for easier usability; while Hevo’s BI tools such as Microsoft Power BI and MicroStrategy offer advanced features for data cleaning and modeling that can help identify financial trends, forecasts, areas for improvement etc. Sign up now for a free trial to experience our platform for yourself!
Making Decisions
Financial analysts interact with numerous people, from supervisors and managers to clients or customers; therefore they must have the ability to clearly present their analysis and findings through written communications.
Financial analysts can be found in companies across various sectors of industry and commerce; most commonly banking and investment firms such as hedge funds, mutual funds, private equity firms or insurance providers hire financial analysts.
Some analysts specialize in securities research; this allows them to assess businesses and recommend investment strategies that support financial growth and stability. Others focus on risk management by screening applicants or reviewing claims made against businesses.
No matter their niche, these professionals must possess skills with spreadsheets and statistical software programs such as SPSS or R. They should be adept at interpreting data, spotting trends and creating forecasts. Furthermore, they may assist in long-term planning, capital expenditure evaluation, working capital monitoring or cash flow management analysis.
Communicating Decisions
Once deep analysis and forecast models are established, financial analysts must present their findings and recommendations to business leaders or clients with ease. This often involves developing presentations using visuals, text and nonverbal cues that communicate the message effectively.
Assuming an analyst is interviewing for an entry-level role at an investment firm, they may be asked why they want this particular job and expected to give an answer that displays both their passion for finance and their plans to advance within the firm.
Senior financial analysts may be called upon to develop business models for clients and assist them with investment strategies, while managing team members to ensure work is completed promptly – all key elements to maintaining client satisfaction and earning promotion.
