Financial Analyst Career Overview

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The phrase financial analysis has become commonly used in everyday business-related language, just like stock brokerage or investment banking; however, not everyone understands what it actually means. Professional financial analysis is the practice of evaluating businesses and organizations for performance, stability, and future profitability. Professionals employ financial analysis to forecast long-term business success.

Financial analysis also encompasses other practical goals. In investment finance, the end goal of financial analysis is to determine whether or not a business warrants monetary investment. Financial analysis plays an important role in setting policy for individual businesses and entire industries. The field allows businesses to receive guidance to become more profitable, and to create valuable connections with other businesses and organizations. For more information on the job profile for someone who conducts financial analysis as a career, read on.


A financial analyst evaluates businesses in corporate or investment finance for profitability and suitability for investment. These analysts present their findings in written reports, making recommendations on how to invest profitably to executive management. They also construct financial models to forecast business performance over the short- and long-term future. In order to fulfill these job duties, they must carefully weigh factors such as market trends, a company’s financial standing, and the outcomes of specific business decisions.

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Read on for a detailed profile of the financial analyst profession, including specializations for financial analysts, where they work, and other important information.


Financial analysts offer guidance to businesses based on evaluations of their overall profitability and stability. They make investment recommendations to both businesses and individuals. In order to make useful recommendations, financial analysts study market trends as they relate to specific industries, products, and geographic regions. This research requires analysts to account for outside influences on the market, such as political climate, regulations, and economic trends.


In general, financial analysts fall within one of two categories: buy-side and sell-side analysts. Buy-side analysts work for companies with a substantial amount of investment capital, helping them to allocate this money profitably. Sell-side analysts work with financial services firms and sales agents who sell investments such as stocks or bonds, helping to market investments to clients.

A range of industries employ financial analysts on both the buy and sell side. Most commonly, they work in banks, securities firms, mutual funds, and other financial services businesses. Occasionally, they may work in business media or research firms in a role not exclusively devoted to the buy or sell-side of the field. Buy-side analysts tend to work in a larger variety of industries than those from the sell-side.

A variety of skills contribute to a successful career as a financial analyst. Financial analysts need strong math skills, as they use arithmetic, statistics, and algebra on a daily basis. They also need strong business communication skills, including active listening. A successful financial analyst needs the ability to get a clear sense of what their employer wants from their investments or how they hope to market their stock to potential clients.

Most employers also expect financial analysts to demonstrate strong critical thinking skills. Financial analysts need the ability to effectively weigh the potential consequences of multiple courses of action against one another in order to fulfill their job duties. They must also possess strong reading comprehension skills, enabling them to quickly read, understand, and synthesize work-related written documents.

Financial analysts’ work draws upon a large amount of data extracted from balance sheets, income statements, financial reports, and stock price information. Computer technology allows them to construct tables and models from this information, synthesizing it into a clearly digestible format. Many employers expect financial analysts to know how to use financial analysis and business intelligence software such as Delphi Technology or IBM Cognos Impromptu.


There are many specializations in the financial analysis field. Portfolio managers curate the mixture of industries, products, and regions that create a company’s investment portfolio. Fund managers specialize in hedge funds or mutual funds. Ratings analysts evaluate companies on their ability to pay debts, including obligations for bonds and other securities. Finally, risk analysts look into investments to evaluate the level of financial risk they present to clients, offering recommendations on the most stable and risk-free options.

People sometimes use the titles securities analyst and investment analyst interchangeably with financial analyst. Read on to learn more about some of the responsibilities financial analysts handle on a typical day.


Gather and organize financial data

Financial analysts spend a major portion of their time gathering financial data from disparate sources, including stock price information, accounting data from ledgers, and financial reports indicating past performance. They may organize this data into spreadsheet applications such as Microsoft Excel for later ease of access.

Analyze financial data

Once they finish compiling the data on the industries, products, or regions for their research, they analyze it by plugging it into analytical software. In this way, they can find useful ratios and figures such as return on equity, yearly growth, and earnings per share, along with putting models for long-term behavior into graphic form.

Consider outside influences on investments

Financial analysts must consider the influence of outside factors not always explicitly represented by data, such as cultural context, political issues, or history between different clients. They may need to conduct research or schedule meetings with clients to fully understand these issues, which can sometimes involve travelling or taking continuing education courses.

Make forecasts or predictions

Based on all available information and data, financial analysts make predictions for the future behavior of securities. Though graphs displaying trends over time can make this process easier, financial analysts also need to use their judgment carefully when considering the most likely outcomes based on all factors influencing these securities.

Develop and present recommendations

Financial analysts use critical thinking skills to weigh multiple outcomes as they recommend investments for clients to buy or sell based on their predictions. With the help of graphs and written reports, financial analysts then present their recommendations to executives, shareholders, and other interested parties.

Help market investments to possible buyers

Sell-side financial analysts interact extensively with clients who buy or show interest in securities from their firm. Often they need to keep buyers updated on the behavior of a security or pique their interest with predictions for other securities at the discretion of sales agents.


  • Education

    BACHELOR’S IN FINANCE Generally, financial analysts hold a bachelor’s in finance or a related field.
    RELEVANT COURSEWORK Most finance degrees offer preparation through coursework in accounting, economics, and statistics.
    MBA WITH A CONCENTRATION IN FINANCE Some MBA programs offer concentrations in finance. Many employers prefer candidates with a graduate degree.

  • Skills

    ACTIVE LISTENING Financial analysts need strong active listening skills in order to communicate effectively with management, clients and shareholders. Their active listening skills enable them to understand the expectations of those who depend on their guidance.
    MATHEMATICS Financial analysts need a firm foundation of basic math skills in subjects such as arithmetic, algebra, and statistics in order to fulfill job functions requiring them to calculate figures on the spot quickly.
    CRITICAL THINKING Critical thinking skills enable financial analysts to weigh outcomes against one another and make the best recommendation possible to their employers.

  • Abilities

    DEDUCTIVE REASONING Financial analysis work requires deductive reasoning abilities, such as noticing that an unstable investment may prove a riskier choice than a stable one.
    COMMUNICATION Financial analysts need good communication skills to convey information to those overseeing their work.
    WRITTEN COMPREHENSION In order to understand feedback or create reports of their own, financial analysts need written comprehension ability.

  • Knowledge

    ECONOMICS AND ACCOUNTING Since financial analysts must follow market activity and identify trends, they need basic knowledge of economics. They also need to understand financial accounting principles in order to gather data for analysis effectively.
    COMPUTERS AND TECHNOLOGY Financial analysts work with computer applications such as spreadsheets, data query tools, and business intelligence software every day, and they need strong computer literacy to use them successfully.


  1. HEDGE FUND Many financial analysts work for hedge funds. In this context, their work may take on a high-pressure, high-stakes tone, requiring them to produce accurate results quickly and consistently with minimal financial toll.
  2. INSURANCE COMPANY Many financial analysts create smart investment portfolios for insurance companies, since these companies typically possess large amounts of investment capital. These analysts typically work on the buy-side.
  3. LARGE PUBLIC UNIVERSITY Many colleges and universities employ financial analysts to create smart investment portfolios. Nonprofits also employ a surprising number of financial analysts. These analysts typically work on the buy-side.
  4. FINANCIAL SERVICES FIRM Many financial services firms employ financial analysts to generate interest from potential investors, and to minimize financial risk. These analysts typically work on the sell-side.
  5. RESEARCH FIRM Some financial analysts find work in research firms. These entities help businesses build strong investment portfolios by gathering information about target markets and demographics through customer surveys, focus groups, and other studies.






  • Association for Financial ProfessionalsThe AFP advocates for financial professionals through an annual conference, continuing education, and certifications such as the Certified Financial Planning and Analysis Professional (FP&A) and Certified Treasury Professional (CTP) credentials.
  • CFA InstituteThe CFA institute promotes the financial analysis profession through initiatives such as a research foundation and a range of publications. It also offers several certificates and other designations for professionals.
  • Corporate Finance InstituteFounded in 2016, CFI represents financial analysts working for corporate employers. Membership benefits include the Certified Financial Modeling & Valuation Analyst (FMVA) credential, which candidates may earn completely online.
  • American Association of Finance and AccountingEstablished in 1978, the AAFA helps connect financial analysts and other financial services professionals with high-level jobs. Its online job postings board features opportunities from a range of affiliate companies.
  • Professional Risk Managers International AssociationPRMIA represents risk enterprise professionals nationwide through continuing education and local events. The organization offers a range of professional certifications related to risk enterprise, including the Credit and Counterparty Risk Manager (CCRM) Certificate.
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