Financial Analysis: What is it?
The position of financial analyst is essential
for the division of a firm responsible for financial planning and analysis.
They are in charge of forecasting the company’s future performance and
assessing financial statements. This may involve making future revenue and
expense projections, budgeting, and modeling the capital structure.
The financial plan of a corporation is
frequently monitored by financial analysts. The analyst can calculate the
differences between forecasted values and actual values by analyzing the
company’s performance as well as changes and market trends.
The analyst’s task is to identify and elucidate the causes of these variations. Analysts
may also often convey their results to management and other stakeholders, which
could aid in the strategic planning of the business.
Important Functions of Financial Analysts
A company’s present value and potential for
future growth are evaluated by financial analysts. The primary responsibility of a
financial analyst is to analyze financial data to create projections
for a company and assist it in making well-informed decisions.
To help with their research and the providing
of insight, analysts frequently construct and maintain a variety of
spreadsheets and dashboards. This makes it easier to comprehend trends and data
clearly. Similar to an equities research associate’s job, some analysts are
also entrusted with developing models to evaluate potential investment
opportunities.
Various project managers may meet with internal
finance analysts to discuss performance. An analyst may be required to speak
with these managers in order to learn the reasons behind any performance
variations.
What Sort of Qualifications Do Financial Analysts Usually Have?
Most analysts hold a bachelor’s or master’s
degree in an area that is business-related. The most popular area of emphasis
is finance, but some analysts advise beginning with an accounting degree
because it gives you a stronger basis for understanding how financial
statements work.
A common professional advancement for financial
analysts is adding a useful designation, such as CFI’s Financial Modeling &
Valuation Analyst (FMVA)TM certification. This qualification with a financial
modeling specialization teaches analysts how to create advanced financial
analyses utilizing Excel, PowerPoint, and the actual analyst tools. Find out
more about the best qualifications for financial analysts.
This job description for a financial analyst
was created based on duties listed in ads from Goldman Sachs, GE Capital,
Fidelity Investments, and PricewaterhouseCoopers and published on CFI Education
Inc.’s website.
Financial Analyst Job Description
All of the following are the responsibilities of a financial analyst:
- Track operational KPIs and carry out financial forecasts, reporting, and analysis.
- Analyze financial information and produce financial models to aid in decision-making
- Report on financial results and get ready for recurring leadership evaluations
- Examine previous outcomes, carry out a variance analysis, spot trends, and offer suggestions for advancements.
- To guarantee accurate financial reporting, collaborate closely with the accounting staff.
- Comparing and analyzing actual results with plans and forecasts will help you assess financial success.
- Establishing and implementing policies and processes will direct the cost analysis process.
- Provide trend and forecast information, as well as optimization action recommendations.
- Using data analysis, comparison analysis, and recommendation, research suggested methods and material adjustments.
- Improve processes by identifying them, driving them, and producing tools, Excel dashboards, reports, and ad-hoc reports.
- Creating automated reporting and forecasting systems increases productivity.
- Market research, data mining, business intelligence, and valuation comparisons should be done.
- Create forecasts and models using a solid foundation for financial analysis.
- Virtually all job descriptions for financial analysts specify proficiency with Microsoft Excel; knowledge of data query/data management technologies is helpful (Access, SQL, Business Objects)
Fundamental Requirements for the Position of Financial Analyst
Three or more years of expertise in company finance or a related field
- Advanced knowledge of financial modeling procedures
- Excellent command of Excel operations and calculations
- Requires a BA, BS, or B. Com (bachelor’s in accounting, Finance, or Economics).
- strong aptitudes for analysis and data collection
- excellent business sense
- Financial Expert Description of the Position – Desired Skills
- 3-5+ years of experience in company finance or another related field
- MBAs are favored.
- The preferred majors are finance, accounting, economics, or statistics.
- FMVA or comparable credentials or demonstrated work experience in a quantitatively demanding role are preferable.
- Strong aptitude for math and analysis
- Self-starter with outstanding interpersonal and problem-solving abilities
- advanced Excel financial analyst knowledge Personality and Interpersonal Skills in a Job Description
- Ability to streamline functions and passion for learning and growing
- Strong interpersonal skills, including written and oral communication skills
- Comfort dealing with ambiguity and the ability to work independently
- Experience working with, and presenting to, senior executives
- Excellent communication and presentation skills; be comfortable interacting with executive-level management
- Strong financial modeling experience
Key Responsibilities
- Grow financial performance through analysis of financial results, forecasts, variances, and trends
- Create recommendations to be presented to management and executives
- Develop financial models to support valuation, planning, and forecasting
- Aid in the capital budgeting and expenditure planning processes
- Reconcile existing transactions through cross-referencing incoming and outgoing data
- Conduct comparable analysis and market research to support internal financial analysis
- Maintain up-to-date technical knowledge of financial instruments, market conditions, and trends
Average Financial Analyst Salary in Pakistan
As per the survey conducted by “PayScale”,
financial analysts make an average of Rs 604,024 a year in Pakistan. Based on
five salaries, an entry-level Financial Analyst with less than one year of
experience may anticipate getting an average total salary of Rs 310,000 (tips,
bonus, and overtime pay included). Based on 33 salaries, an entry-level
Financial Analyst with 1-4 years of experience receives an average total
remuneration of Rs 600,000. Based on 11 incomes, the average annual salary for
a financial analyst in the middle of their career with between five and nine
years of experience is Rs 1,080,000.
Gender Breakdown for Financial Analysts in Pakistan
Male 54.5%
Female 45.5%
Financial Analyst-Related Job Salaries
Finance Manager Avg. Salary Rs 151k — Rs 3m
Accountant Avg. Salary Rs 38k — Rs 1m
Chief Financial Officer (CFO) Avg. Salary Rs 515k — Rs 14m
Chartered Accountant Avg. Salary Rs 102k — Rs 10m
Assistant Finance Manager Avg. Salary Rs 201k — Rs 1m
Data Analyst Avg. Salary Rs 197k — Rs 2m
Senior Accountant Avg. Salary Rs 83k — Rs 2m
Data Entry Operator Avg. Salary Rs 9k — Rs 1m
Data Scientist Avg. Salary Rs 79k — Rs 6m
For the department of a company responsible for
financial planning and analysis, the position of financial analyst is crucial.
They oversee evaluating financial statements and projecting the
company’s future performance. Making future revenue and spending estimates,
creating a budget, and modeling the capital structure may all be involved.
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