Financial Analyst Career : Role and Responsibility
Financial Analyst is the person who performs financial analysis to understand the financial health of the company.
In my previous articles, Hedge Fund Analyst and Private Equity Analyst, we covered the details about the profiles. Financial Analysis covers fundamental analysis, ratio analysis, financial modeling and valuation.
Broadly, in following areas the financial analysts are required.
1. Buy side firms
2. Sell side firms
3. Investment Banks
Buy side firms are basically different funds, including mutual funds, where the financial analyst studies different companies, performs research and analysis tools and give recommendations whether to invest in the company or not for the fund. This is in house research.
Sell side firms are basically research houses or brokerage firms. They cover certain companies and write detailed equity research reports and sell this research to the clients. The main idea here is to sell research and generate brokerage from client's transactions.
In Investment banks, the financial analyst's role is different. Here, he covers mainly IPO (Initial Public Offering) process and M&A (Mergers and Acquisitions) deals. The analyst plays active role in all these deals.
Following is the skill set required for financial analyst profile:
1. Solid analytical skills
2. Curiosity and interest in analyzing, understanding companies in depth
3. Solid fundamental valuation skills acquired in business school, or as a consultant
4. Interest in understanding, analyzing a company's business
5. Clear financial and quantitative concepts
6. Ability to build financial models
7. Sectoral expertise in Telecom, Media, Technology, Insurance, Banking, Food & Beverage.
8. Strong analytical and MS Excel skills (Macros, V-Lookups and Pivot Tables) with strong communication skills
In India, entry level financial analysts earn in the range of INR 3,00,000 – 7,00,000 per annum. In London, the same profile will give you the salary in the range of GBP 20,000 – 50,000. In US, for the same profile, you can earn $ 35,000- 80,000.
There are many KPOs where fresher and entry level openings are available. However, check the skills they want for these roles. The selection process for the companies involves case based test, and two rounds of interviews. My experience says, if you are really good in fundamental and analytical skills, you can grab such roles.
So, brush up your financial knowledge and be ready to test your analytical skills.
What are your career plans? Write to me.
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Article Tags:
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