How to become a financial analyst 

In the field of finance, the role of a financial analyst is one of the most popular professions. As businesses and individuals navigate the intricate web of economic decisions, the demand for skilled financial analysts continues to increase. These professionals play a crucial role in fiscal strategies, illuminating paths to profitability, risk mitigation, and smart investment choices. 

Financial analysts have a versatile scope, working across a spectrum of industries, from banking and investment firms to corporations, government agencies, and even non-profits. Their vital analyses guide decision-makers in allocating resources, setting budgets, and identifying trends. In return, the profession is equally rewarding, with substantial earning potential.  This article helps in providing a path for becoming a financial analyst, including the educational qualification & skills needed, how lucrative the profession is, and the various industries they can work in.  

Also read: Best online degree courses in banking and finance 

Who is a financial analyst? 

A financial analyst is an individual responsible for helping a company make important business decisions about managing its portfolio and investments. Analysts scour through piles of financial information and attempt to extract insights from data. CEOs use their findings to decide whether or not to buy/sell company stocks and bonds and assess their risk appetite for investments. 

They must be aware of the latest microeconomic and macroeconomic industry trends and be able to create spreadsheet models of financials for presentation. Companies hire financial analysts to determine the efficacy of their numerical data and calculate their marketing or advertising budgets. Analysts are also responsible for making profit and loss forecasts and tracking the financial performance of organizations. 

What does a financial analyst do? 

A financial analyst assesses a company’s financial statements to evaluate its financial performance and uncover investment trends. They’re responsible for performing cash flow analysis, evaluating the performance of stocks, bonds, and various assets, and analyzing the latest market trends. The goal of a financial analyst is to optimize the performance of a business and make recommendations to maximize profits. 

Is a financial analyst a good career choice? 

A career as a financial analyst can be an excellent choice for several compelling reasons: 

Lucrative compensation: Financial analysts are often well-compensated, with salaries that tend to be above the average for many other professions. As you gain experience and expertise, your earning potential can increase significantly. 

High demand profession: The need for financial analysts remains robust in both bull and bear markets. As businesses continually seek informed financial guidance, job opportunities are consistently available. 

Diverse industries: Financial analysts have the flexibility to work across various industries, from investment banking and corporate finance to healthcare and technology, allowing you to explore fields that align with your interests. 

Challenging role: This profession is intellectually stimulating, as it requires analyzing complex data, interpreting financial reports, and making informed decisions. If you enjoy problem-solving and critical thinking, financial analysis offers a rewarding challenge. 

Career advancement: A financial analyst often has a clear career progression path. With experience and, potentially, additional certifications like the Chartered Financial Analyst (CFA) designation, you can advance to roles like portfolio manager or even chief financial officer (CFO). 

Contributing to success: Financial analysts play a pivotal role in helping organizations and individuals make sound financial decisions. By providing data-driven insights, you directly contribute to their success and financial well-being. 

Also read: Scope of financial management as a career choice  

Financial analyst roadmap 

Becoming a financial analyst typically involves a combination of education, skills development, and gaining practical experience. Here’s a step-by-step guide to help you embark on this career path. 

Undergraduate education: Enroll in a bachelor’s degree program, such as a Bachelor of Commerce (BCom) or a related field. Focus on courses that build a strong foundation in finance, accounting, economics, and mathematics. 

Build a solid academic background: While pursuing your bachelor’s degree, take advantage of internships, part-time jobs, or volunteer opportunities in finance-related positions. This will help you gain practical experience and develop essential skills. 

Consider a postgraduate degree: Decide whether to pursue a postgraduate degree. While it’s not always necessary, an MCom or an MBA in Finance can give you a competitive edge and open doors to more advanced positions. Network and Seek Internships: 

Networking: Network with professionals in the finance industry, attend career fairs, and actively seek internships or co-op opportunities. These experiences can provide hands-on knowledge and help you establish connections within the field. 

Certifications and professional development: Consider pursuing certifications like the Chartered Financial Analyst (CFA) or Certified Public Accountant (CPA) to enhance your qualifications. These credentials can boost your credibility and employability. 

Job search and application: Begin your job search by looking for entry-level financial analyst positions. Create a strong resume and cover letter that highlights your education, skills, and relevant experience. 

Interview preparation: Prepare for interviews by familiarizing yourself with common financial analyst interview questions and practicing your responses. Showcase your analytical and communication skills during the interviews. 

 Financial analyst skills 

Following are the top skills needed for financial analysts: 

• Analytical skills 

Financial analysts have to work with numeric data from multiple sources, and therefore, they need good analytical skills to decide what information is relevant and what is not. Analytical skills include analysing vast volumes of information, extracting insights from unstructured data, cleaning it up, and identifying business opportunities. 

• Mathematical skills 

Financial analysts need mathematical skills such as financial statements analysis, statistics, probability theory, mental maths, etc. Developing a good intuition for maths is critical since you need to make sure no accounting errors happen. Financial analysts need to get good at crunching numbers and sorting through millions of financial transactions, so mathematical skills are necessary. 

• Basic finance knowledge 

Financial analysts should have basic financial knowledge of equity research, fixed income, and private equity concepts. They should be comfortable performing business valuations and be familiar with investment banking concepts.  

• Accounting skills  

Good accounting skills related to credit risk analysis, IFRS knowledge, cash flow analysis, etc., are needed. Professionals should possess strong quantitative skills and be able to report their findings in clear and concise ways to clients. 

• Statistics 

Job roles in the industry require a basic knowledge of statistics. Knowledge of calculus can help candidates tremendously during their coursework. 

• Financial modelling 

Advanced working knowledge of Microsoft Excel and databases is recommended. Creating data visualizations, graphs, charts, and applying different formulas to calculations form the basics of financial modelling.  

Check out: MBA in banking services vs MBA in finance 

How much do the financial analysts earn in India? 

The financial analyst profession is an in-demand and lucrative one as they get to work in diverse industries. A financial analyst can earn a salary of up to INR 11.5 LPA in India  

Top recruiting companies for financial analyst  

The top recruiting companies for financial analysts jobs for freshers and experienced people in India are: 

• Alstom India Limited 
• Cyient Inc. 
• Uber 
• Convosight 
• Cadbury 
• HSBC 
• Citi 
• Philips 
• OSTC Academy 
• Deloitte 
• John Crane 
• Amazon 
• Barclays 
• Accenture 
• GroundTruth 
• Avantha Technologies Limited 

Prepare for a career in finance with an online UG or PG degree through Online Manipal 

If you’re aspiring to pursue a career in finance, it’s essential to have the right educational qualification and skills. Enroll for an online BCom from Manipal University Jaipur and embark on a journey to become a financial analyst. You can further your knowledge and skillset by acquiring a PG degree like MCom or MBA in Finance. These online degrees are available on the Online Manipal platform. They offer the flexibility to learn at your own pace and time. The course materials are available online for free on the Learning Management Sytem (LMS). Students can benefit from attractive scholarships, EMI options, expert faculty and mentorship, and placement assistance. 

Conclusion 

The road to becoming a financial analyst is challenging but highly rewarding. If you want a career that pays well, engages with businesses, and builds professional networks, this could be the one for you. Financial analysts hired full-time by companies work as hedge fund managers, portfolio managers, risk analysts, rating analysts, and other advanced job roles as they progress in their careers.