Financial Analyst Jobs & Career Guide 2024

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By financejobs.net Staff Writer

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What Is a Financial Analyst?

A financial analyst is often considered the first rung on the corporate finance ladder. It’s an entry-level position that provides a foundation for understanding the inner workings of a company and its financial health. The role provides exposure to various aspects of corporate finance, learn the fundamentals of financial statement analysis, develop your core financial modeling and analytical skills and above all act as a strong platform for career advancement.

Jumping into a financial analyst role can be like drinking from a fire hose at first. There’s a lot of new information to absorb, from financial modeling techniques to industry jargon. The learning curve can be steep, but it’s exciting! You’ll be working alongside experienced analysts who can mentor you and guide you through the process. Be prepared to ask questions, be detail-oriented, and constantly seek opportunities to learn. The early days are about building a strong foundation, and the skills you gain will be invaluable as you progress in your corporate finance career.
David Moore, Financial Analyst at Raytheon

What Does a Financial Analyst Do?

  • Financial Modeling – You’ll build financial models using spreadsheets and specialized software to forecast future financial performance, assess investment opportunities, and value businesses.
  • Financial Statement Analysis – This involves analyzing a company’s financial statements (balance sheet, income statement, cash flow statement) to assess its financial health, profitability, and solvency.
  • Company Valuation – Financial analysts may be involved in valuing companies for various purposes like mergers and acquisitions or divestitures.
  • Market Research and Industry Analysis: – Staying up-to-date on industry trends, competitor analysis, and economic factors that can impact the company’s financial performance is crucial.
  • Budgeting and Forecasting: –Financial analysts assist in creating budgets and financial forecasts to guide resource allocation and strategic decision-making.
  • Data Analysis and Reporting – You’ll collect, analyze, and interpret financial data to prepare reports for senior management and stakeholders.
  • Presentations and Communication – Effectively communicating complex financial information verbally and in written reports is essential.

A Day in the Life: Financial Analyst in the corporate development team of a large tech company

8:00 AM – 9:00 AM: Morning Routine & Check-In

  • Arrive at the office, check emails for urgent updates or overnight developments in the financial markets or industry news.
  • Connect with the team for a brief morning meeting to discuss priorities for the day and any outstanding tasks.

9:00 AM – 11:00 AM: Project Deep Dive and Analysis

  • Focus on a specific project assigned by the senior analyst or team lead. This could involve:
    • Mergers & Acquisitions (M&A) Analysis: Researching potential acquisition targets, analyzing their financial statements, building valuation models to assess deal feasibility.
    • Investment Analysis: Evaluating potential investments like venture capital opportunities, analyzing market trends, and assessing potential risks and returns.
    • Strategic Partnership Analysis: Assessing the financial viability of potential partnerships or joint ventures, creating financial models to project the combined value proposition.

11:00 AM – 12:00 PM: Data Gathering and Model Building

  • Gather relevant financial data from the company’s internal systems, public filings, and market research databases.
  • Build or update financial models in Excel or specialized financial modeling software to analyze the project at hand. This might involve:
    • Forecasting future financial performance of potential acquisition targets or partnerships.
    • Calculating key financial metrics like valuation multiples, return on investment (ROI), or net present value (NPV).
    • Performing sensitivity analysis to assess the impact of different market conditions on project outcomes.

12:00 PM – 1:00 PM: Lunch Break

1:00 PM – 3:00 PM: Communication and Collaboration

  • Meet with internal stakeholders (e.g., product managers, engineers) to gain a deeper understanding of the business side of potential deals or partnerships.
  • Attend internal meetings to present preliminary findings from your analysis and discuss project progress with the team.
  • Communicate with external parties (e.g., investment bankers, potential acquisition targets) as needed to gather additional information or clarify details.

3:00 PM – 4:00 PM: Research and Learning

  • Catch up on industry news and trends relevant to your current projects or areas of interest in corporate development.
  • Participate in online courses or training programs offered by the company to develop your financial modeling skills or learn new valuation techniques.

4:00 PM – 5:00 PM: Reporting and Wrap-Up

  • Prepare a summary report or presentation deck outlining your key findings and recommendations from the day’s work.
  • Finalize any outstanding tasks or deliverables assigned by the senior analyst or team lead.
  • Connect with the team for a brief end-of-day meeting to discuss progress and plan for the next day.

5:00 PM and Onwards

  • Leave the office, but depending on deadlines or project urgency, there may be some additional work required outside of typical office hours.

What Makes a Good Financial Analyst?

Technical Skills

  • Financial Modeling Proficiency – While senior analysts may handle complex models, a strong foundation in building financial models using spreadsheets (often Excel) is crucial. This involves understanding financial concepts, applying formulas, and presenting data clearly.
  • Attention to Detail – Accuracy is paramount. A junior analyst needs a keen eye for detail to ensure data is correct and calculations are error-free in financial models and reports.
  • Basic Accounting Knowledge – Understanding financial statements (balance sheet, income statement, cash flow statement) and core accounting principles is essential for analyzing financial data.

Analytical and Problem-Solving Skills

  • Critical Thinking – The ability to analyze complex financial information, identify problems, and propose solutions is vital for contributing to projects and making sound recommendations.
  • Data Analysis – Being able to gather, organize, and interpret financial data from various sources is essential for building models and generating insights.
  • Problem-Solving – Junior analysts might encounter challenges when building models or analyzing data. A strong ability to troubleshoot and find solutions independently is valuable.

Learning and Adaptability

  • Curiosity and Desire to Learn – The corporate finance world is constantly evolving. A good junior analyst is eager to learn new skills, stay updated on industry trends, and adapt to new technologies or methodologies.
  • Ability to Take Initiative – While guidance is important, a good junior analyst isn’t afraid to take initiative, ask questions, and proactively seek out new tasks or learning opportunities.
  • Adaptability – Being able to adjust to new projects, learn new software, and work effectively in a fast-paced environment is essential for success.

Communication Skills

  • Clear and Concise Communication – Financial analysts need to be able to communicate complex financial information clearly and concisely, both verbally and in written reports.
  • Active Listening – Effectively listening to senior analysts, colleagues, and stakeholders is crucial for understanding project requirements and providing accurate analysis.
  • Presentation Skills – Junior analysts might be involved in creating presentations to summarize their findings or recommendations. The ability to present information in a clear, compelling manner is valuable.

Additional Qualities

  • Strong Work Ethic – Being a team player, demonstrating a strong work ethic, and maintaining a positive attitude are important qualities for success in any first-level role.
  • Time Management – Junior analysts may juggle multiple tasks with varying deadlines. Effective time management skills are crucial to meet expectations and deliver high-quality work.

How to Become a Financial Analyst

Step 1: Obtain a Bachelor’s Degree

Pursue a bachelor’s degree in finance, accounting, business administration, statistics, or a related field. These programs provide the necessary foundation in financial principles, accounting, and quantitative analysis.

Step 2: Gain Relevant Internships

While studying, seek internships in finance or related areas. Internships provide practical experience, help you understand the industry better, and significantly enhance your resume.

Step 3: Develop Key Skills

  • Analytical Skills: Strengthen your ability to analyze financial statements and market trends.
  • Technical Skills: Become proficient in financial software and tools, such as Excel, and familiarize yourself with databases like Bloomberg or Reuters.
  • Communication Skills: Develop strong written and verbal communication skills, as explaining complex financial concepts in an understandable way is crucial.

Step 4: Get Your First Job

  • Entry-Level Positions: Apply for entry-level financial analyst positions. Many organizations, including banks, investment firms, and corporate finance departments, offer positions suitable for recent graduates.
  • Resume and Interviews: Tailor your resume to highlight relevant coursework, internships, and skills. Prepare thoroughly for interviews by brushing up on common industry practices and financial analysis questions.

Step 5: Pursue Certification and Continuing Education

  • Certifications: Consider obtaining certifications such as the Chartered Financial Analyst (CFA) designation, which is highly regarded in the finance industry and can enhance career opportunities and credibility.
  • Continuing Education: Stay updated with the latest financial regulations, trends, and tools. Attend workshops and seminars, and consider taking additional courses or advanced degrees in finance.

Step 6: Build Experience and Seek Advancement

  • Experience: As you gain experience, take on more complex projects. Show initiative and the ability to handle increased responsibility.
  • Advancement: Look for opportunities to move into senior analyst roles, portfolio management, or even towards a path to becoming a finance manager.

Step 7: Network Continuously

Common Questions About Becoming a Financial Analyst

Our career advisors get asked a lot of questions about becoming a financial analyst, here are some of the most common ones:

“I’m worried the work might be too technical or overwhelming for someone with no prior finance experience. Is it all just number crunching?”

There’s definitely a technical aspect to financial analysis, but it’s not all just crunching numbers! You’ll learn financial modeling techniques and software, but a big part of the job is applying analytical thinking and problem-solving skills. You’ll be working alongside experienced analysts who can mentor you, and most companies provide training programs for new hires. While there’s a learning curve, the initial focus is building a strong foundation, and the skills you gain are valuable for future career advancement.

“What are some of the day-to-day tasks a junior financial analyst might encounter?”

Your day-to-day tasks can vary depending on the company and specific projects, but some common activities include:

  • Assisting senior analysts with building financial models for various purposes like budgeting, forecasting, or mergers and acquisitions (M&A) analysis.
  • Gathering and analyzing financial data from company reports, market research databases, and other sources.
  • Creating presentations and reports to summarize your findings and recommendations for senior management.
  • Conducting research on industry trends and competitor analysis to stay informed about the broader business landscape.

“Is a financial analyst role a good fit for someone who is social and enjoys collaboration?”

Absolutely! While some tasks require independent work, collaboration is a key aspect of being a financial analyst. You’ll work closely with senior analysts, other team members from different departments (like marketing or engineering), and sometimes with external parties depending on the project. Effective communication and teamwork are essential for success in this role.

How Much Does a Financial Analyst Earn?

Starting salaries for a recent graduate joining a company as a financial analyst are currently $50,000-$70,000 per year. In some hyper competitive industries or cities this does increase. We recommend you evaluate job opportunities in this early stage of your career on the potential for personal growth rather than salary alone as roles vary considerably in terms of how impactful they can be on your future career.

Get more insights with our guide to financial analyst salaries.

What’s The Next Level After a Financial Analyst?

Individual career paths can vary depending on your interests, performance, and opportunities within your company however here is a broad outline of a potential corporate finance career path after being a financial analyst.

Financial Analyst (2-4 Years)

This is the foundational stage where you’ll gain core skills in financial modeling, financial statement analysis, and valuation techniques. Develop strong analytical thinking, communication, and problem-solving abilities.

After demonstrating strong performance, you might get promoted to a senior analyst role. Here, you’ll take on more responsibility, manage junior analysts, and lead on specific projects.

You might also explore other specialties within corporate finance like mergers and acquisitions (M&A), capital budgeting or treasury management.

Senior Financial Analyst/Specialist (3-5 Years)

In this role, you’ll lead on complex financial projects, manage teams, and provide mentorship to junior analysts. Here, you can choose to deepen your expertise in a specific area of corporate finance or develop broader financial skills.

  • Manager – Financial Planning & Analysis (FP&A) – Lead the FP&A team responsible for budgeting, forecasting, and financial reporting. This role requires strong communication and collaboration skills as you bridge the gap between finance and other departments.
  • Corporate Finance Manager/Director: – Take on leadership roles within the corporate finance department, overseeing a team of analysts and leading on strategic financial initiatives.
  • Exit to Other Finance Careers – Consider transitioning to other finance roles outside corporate finance, such as:
    • Investment Banking – Leverage your financial modeling and valuation skills for a career in investment banking, helping companies raise capital or advising on mergers and acquisitions.
    • Private Equity –  Analyze potential investment opportunities for private equity firms that invest in non-public companies.
    • Financial Consulting – Use your financial expertise to advise businesses on various strategic and financial issues.

Manager/Director Level (5+ Years)

At this stage, you’ll be a leader within the corporate finance department, playing a critical role in shaping the company’s financial strategy. You might specialize in a specific area or develop a broader financial skillset.

Beyond This Point

The ultimate goal for many in corporate finance is to become the CFO, overseeing the entire financial operations of the company. This requires exceptional leadership, strategic thinking, and strong communication skills. With extensive experience and a proven track record, you could potentially transition to other C-Suite positions like COO (Chief Operating Officer) or CEO (Chief Executive Officer).

The path from financial analyst to CFO is a common one within the world of corporate finance. Here are a few well-known CFOs who started their careers as financial analysts:

  • James Gorman, CEO & Chairman – Morgan Stanley: Gorman began his career as a financial analyst at Merrill Lynch before rising through the ranks to become CEO of Morgan Stanley.

  • Ruth Porat, CFO – Alphabet (Google): Porat started her career as a financial analyst at Morgan Stanley and held various leadership positions at Morgan Stanley and UBS before becoming CFO of Alphabet (Google) in 2015.

  • George Oliver, CFO – Walmart: Oliver’s career began as a financial analyst at Walmart, and he steadily climbed the corporate ladder through various finance roles before becoming CFO in 2014.

  • Matthew Ishbia, CFO – United Wholesale Mortgage: Ishbia’s career path is a bit unique. While not starting at a traditional financial institution, he began his finance career as an analyst at United Wholesale Mortgage, eventually becoming CFO.

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