Financial Analyst
THE JOB A financial analyst assesses a company’s financial needs and strategies. Various forms of financial budgeting are a key part of the job. One of a financial analyst’s main purposes is to find ways to increase company profitability. When working at public companies, financial analysts may also spend time justifying -- or trying to push for an increase in -- the organization's stock price. Some financial analysts review potential acquisitions and sales.
FACTOIDS: • When Jerome York switched from being the CFO of IBM to being Chrysler's CFO, Chrysler's stock gained $1.3 billion the next day and IBM's fell sharply. • Arnold Schwarzenegger holds a degree in business and finance from the University of Wisconsin. • On September 17, 2001, the first day of trading after the World Trade Center attacks, the Dow Jones industrial average dropped 684.81
SKILLS A financial analyst needs to have a thorough understanding of corporate finance, including balance sheets, income statements, cash flow, capital budgeting, profit and loss, time value of money, pro forma statements, and mergers and acquisitions. A good understanding of capital markets is also likely to be required. Being able to communicate this information on paper and in conversation to audiences with varying levels of understanding is also critical. Knowing how to effectively use financial software (Excel, Lotus, etc.) is also necessary for success in this field.
EDUCATION A bachelor's degree in finance or business is usually a prerequisite for financial analyst positions; sometimes an MBA is necessary. Professionals in investment banking sometimes seek the Chartered Financial Analyst (CFA) designation, which is governed by the Association for Investment Management Research.
OUTLOOK The outlook for financial managers is good overall. However, the banking industry, which employs the most financial managers, is expected to continue to consolidate and reduce the number of financial managers. Some financial managers may be hired on a temporary basis to see a company through a short-term crisis or to offer suggestions for boosting profits.
Financial Analyst
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