Financial Analyst

A person who performs financial analysis for external or internal clients as a core part of the job is a financial analyst. Financial analysts are also known as securities analyst, research analyst, equity analyst or investment analyst. He collects information, assemble spreadsheets, write reports and review all non-legal pertinent information about prospective deals. They examine the deal very carefully and then prepare plans on financial analysis. To be a financial analyst, one needs to have vigilant awareness of financial trends. He has to do financial analysis for the financial health of company. Financial analysts are required in buy side firms, sell side firms and investment banks.

Job of financial analyst

Financial analysts use fundamental analysis principles, technical chart analysis and tactical evaluation of market evaluation. Analysts study public records and filings and participate in conference calls by the company to obtain information. Small group or one-on-one meetings with senior members of management teams also help to gain additional information. Mutual and pension funds, hedge funds, securities firms, banks and insurance companies are the major areas in which analysts are employed often. Financial analysts who perform balance sheet analysis and audited financial statements help to assess lending risk. They read company financial statement and analyze commodity prices, sales, costs, expenses and tax rate to determine company’s value and project future earnings. Financial analysts usually have deep knowledge about the entire industry to assess current trends in business practices, products and industry competition. For evaluating financial data, spot trends and developing forecasts, financial analysts use spreadsheets and statistical software packages. Some financial analysts collect industry data like balance sheet, income statement and capital adequacy for their clients. They also prepare presentations about merits of investing in the new company. Financial analysts working for rating agencies are known as rating analysts. They evaluate the ability of companies or governments that issues bond to repay their debts.

Importance of financial analysts

Financial analysts analyze financial information’s to produce forecasts of business, industry and economic conditions for making investment decisions. They assemble spreadsheets and draw charts to illustrate technical reports using computer. They evaluate and compare the relative quality of various securities. Interpreting data affecting investment programs like price, yield, stability and economic influences is one of the major tasks of a financial analyst. They are specialized people to present oral and written reports on general economic trends, individual corporations and entire industries. By analyzing information they monitor fundamental, economic, industrial and corporate developments.

Questions:

• Who is a financial analyst?
• What is the job of a financial analyst?