1. TOPIC: FINANCIAL ANALYST
A financial analyst is responsible for researching and analyzing financial information to make
well informed decisions about the future investments of a company (or even individual).
Naturally, this field is very competitive and you should start your preparation as early as your
university years, taking courses in economics, accounting, business, and etc. Some recruiters say
that many of the junior analysts hired have an engineering or scientific background, while the
MBAs are sought after for senior analyst positions right out of business school.
Even if you do not have such qualifications, you can consider taking the appropriate exams to
prove your fit. Financial analysts are likely to focus on a particular sector based on the company
they work for. One of the most tempting branches seems to be that of working for investment
banks, where analysts would research stocks, write reports and monitor financial movements to
essentially determine whether or not a specific deal is feasible based on the fundamentals of the
companies involved. At the job, financial analysts would need to be constantly updated on both
macroeconomic issues and information about particular companies’ balance-sheets. This would
imply regular reading of the financial press, along with traveling and managing statistical data.
Once they have analyzed all their information, analysts prepare reports that explain their
findings. They use computers to design and prepare tables, charts, and graphs for these reports.
They often deliver these reports to clients and to other analysts. Analysts also use computers to
track and analyze information. Based on their analyses, analysts advise clients about when to buy
or sell financial products. Advice may include investments related to energy futures and water
rights. They call brokers and ask them to purchase financial products for their clients.
More and more, clients show interest in products with less impact on the environment. Analysts
also may determine pricing of new stocks and bonds. They also stay up to date about changes by
taking additional training and reading economic journals. As more businesses and individuals
make investments, the need for financial analysts will increase. Investment portfolios are
becoming more complex. This leads many people to seek someone to help them select their
investments. Analysts will also be needed in the investment banking field. They help companies
raise money or merge with other companies. However, positions in this industry are sensitive to
changes in the stock market.
Financial analysts use spreadsheet and statistical software packages to analyze financial
data, spot trends, and develop forecasts. On the basis of their results, they write reports and make
presentations, usually making recommendations to buy or sell a particular investment or security.
Competition for financial analyst jobs will be strong.
http://www.growinfinance.com/noticias
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2. Due to the skilled nature of a financial analyst,employers expect that entry-level financial
analysts hold at least a bachelor's degree in a business-related field. Actually there are few
advantages and disadvantages related to this career. Some of the advantages are; being paid high
wages, favorable expected employment growth, opportunities for advancement, and can work in
a variety of industries.
The other benefits are that many employers use bonuses, which can be equal to or double the
beginning analyst’s salary, to attract and hold intelligent personnel. Successful financial analysts
become senior financial analysts or associates after three to four years of hard work at some firm.
Those with strong client contacts and immaculate reputations start their own financial consulting
firms.
While career as a financial analyst requires preparation and hard work, it also has the potential to
deliver not just financial rewards but the genuine satisfaction that comes from being an integral
part of the business landscape. There are also some disadvantages of being a financial analyst
which are; competition for job,licensure required for many jobs,Some employers require a
master's degree, and may work for long hours as most work full time and many work more than
40 hours per week. So, like any other careers, a financial analyst also has pros and cons to it.
As interoffice protocol goes, analysts interact with each other as colleagues while they
tend to report to a portfolio manager or other senior in management. A junior analyst may work
his or her way up to a senior analyst in a period of three to five years. For senior analysts who
continue to look for career advancement, there is the potential to become a portfolio manager, a
partner in an investment bank or senior management in a retail bank or an insurance company.
Some analysts go on to become investment advisors or financial consultants.
The most successful junior analysts are ones that develop proficiency in the use of spreadsheets,
databases, PowerPoint presentations and learn other software applications. Most successful
senior analysts, however, are those who not only put in long hours, but also develop
interpersonal relationships with superiors and mentor other junior analysts. Analysts that are
promoted also learn to develop communication and people skills by crafting written and oral
presentations that impress senior management.
Those who progress along corporate financial-analyst tracks can expect to eventually find
different jobs in the financial community, perhaps as investment bankers, investment advisors, or
financial consultants. Those who enjoy the more interpersonal side of finance move into
management consultant positions, where they can use their people and financial skills.
http://www.investopedia.com/articles/financialcareers/06/financialanalyst.asp
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3. An experiment was conducted where practicing financial analysts provided risk and return
judgments on 30 equity securities. The ability of financial analysts to subjectively express the
relative emphasis they place on the available cues when generating their judgment evaluations
was assessed by three alternative measurement methods. The results indicate the analysts
exhibited a relatively high degree of self-insight since their subjective indications of cue
importance were consistent with the models and outputs of their judgment policies.
Some of the uses of financial analysis are;continue or discontinue its main operation or part of
its business,make or purchase certain materials in the manufacture of its product,acquire or
rent/lease certain machineries and equipment in the production of its goods,issue stocks or
negotiate for a bank loan to increase its working capital,make decisions regarding investing or
lending capital , and other decisions that allow management to make an informed selection on
various alternatives in the conduct of its business.
According to the professionals and scholars, there are a few objectives of financial analysis. The
objectives are to estimate the earning capacity of the firm, judge the financial position and
financial performance of the firm, determine the long-term liquidity of the funds, judge the
solvency of the firm, decide about the future prospect of the firm, know the progress of the firm,
and to measure the efficiency of the operations.
Financial analyst typically works for an investment firm, insurance firm, bank or some type of
organization or institution.The primary responsibility of a financial analyst is to evaluate stocks,
bonds and investments to help clients determine which investment options best fit their financial
needs and goals. Some financial analysts provide the financial advice to individual consumers,
but some financial analysts help to provide the guidance to businesses as to how they should
invest its money.
One of the responsibilities of a financial analyst is to determine the financial goals of the
individual consumer, company or business that they are working for, so that the analyst can
research, evaluate and ultimately pick the investment options, or menu, that clients can choose
from in order to reach their overall investment goal.
Financial analysts working for investment banking firms concentrate more on figuring out
if certain deals such as mergers and acquisitions or IPOs are feasible in relation to the
fundamentals of the companies involved.It is important for analysts to be vigilant with their
financial analysis particularly information associated with the macro economy.
Ross Mear and Michael Firth-The Accounting Review Vol. 62-American Accounting
Association-page 176- Jan 1987
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4. The financial analyst will play a key role in the organization to maintain an effective financial
management. The financial analyst will be responsible for all areas relating to financial analysis,
business development, system integration, sales, budgeting and forecasting. This position will be
responsible for developing and maintaining the monthly financial statement analysis. This
position addresses tight deadlines and a multitude of analysis activities including financial
reporting analysis, sales analysis, budget and forecast activities.
The financial analyst will have contact with executives which requires strong interpersonal
communication skills both written and verbal. The financial analyst will report directly to the
CFO at this timeto deliver accurate consolidated financial reporting; forecasting and analysis of
the business; and identify business and financial risks and opportunities.The financial analyst
also studies different companies, perform research and analysis, and give recommendations
whether to invest in the company or not.
Financial analyst is important in a company as they provide guidance to businesses and
individuals making investment decisions.They assess the performance of stocks, bonds,
commodities, and other types of investment. They also study company financial statements and
analyze commodity prices, sales, costs, expenses, and tax rates to determine a company's value
by projecting its future earnings. They often meet with company officials to gain a better insight
into the firms' prospects and management.Planning and control are the two most important
ingredients for a successful business. A business plan takes most of the guess work out of
Business Strategy and Control through solid financial analysis.
Financial Data provides a way to evaluate where you are in your strategic plan, which tells you
where changes are needed in your plan. Because of this, financial analysis and data management
are vital to running a successful business.Having a financial management system in place, you
can easily identify signs of early warning or identify areas particularly profitable. Not having a
system that can analyze and organize the financial data does not allow you to effectively manage,
grow and manage a business.
In addition, financial analysis is important as a financial statement reveal how much a company
earns per year in sales. The sales may fluctuate, but financial planners should be able to identify
a pattern over years of sales figures. For example, the company may have a pattern of increased
sales when a new product is released. The sales may drop after a year or so of being on the
market. This is beneficial, as it shows potential and sales patterns so executives know to expect a
drop in sales.
Mary Jane-demand media-Hearst communications-2013
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5. Financial analyst job duties are to conduct a common financial analysis of finance reports
acquired from various departments like marketing, sales, purchase, and so on. They develop
effective and new effective techniques and processes for financial planning, therefore rendering
quality service to the customers and develop appropriate financial methods and procedures of
measuring and evaluating marketing performance.
Besides, the financial analysts monitor accounting reconciliations and procedure, evaluate
business proposals with comprehensive analysis of monetary impact on business and predict and
evaluate marketing expenses and returns. They serve as a great resource to finance team
members and marketing partners on financial measures and analytical methods.
In addition, the financial analysts provides linkage across organization of analytical methods and
definitions used in analysis and reporting of acquisition and base offers, valuation of customers
and health of the customer base. They are also responsible to advice on the results of analyses for
the use in business decisions and assist in the development of policies for business planning and
control.
A financial analyst requires few skills and qualifications in order to be the financial analyst. A
bachelor's or graduate degree is required for financial analysts. Most companies require a
bachelor’s degree in a related field, such as finance, business, accounting, statistics, or
economics. An understanding of statistics, economics, and business is essential, and knowledge
of accounting policies and procedures, corporate budgeting, and financial analysis methods is
recommended. An MBA or a master's degree in finance is often required.
Advanced courses or knowledge of options pricing, bond valuation, and risk management are
important. Strong math, analytical, and problem-solving skills are essential qualifications for
financial analysts. Good communication skills are necessary because these workers must present
complex financial concepts and strategies. Self-confidence, maturity, and the ability to work
independently are important.
Financial analysts must be detail-oriented, motivated to seek out obscure information, and
familiar with the workings of the economy, tax laws, and money markets. Although much of the
software they use is proprietary, financial analysts must be comfortable working with
spreadsheets and statistical packages. With the increasing global diversification of investments,
companies are assigning more financial analysts to cover foreign markets.
Companies prefer financial analysts to have the international experience necessary to understand
the language, culture, business environment, and political conditions in the country or region that
they cover.
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