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Skills Required for a Financial Analyst

#internship #business #finance #career #financialanalyst #analyst #skills

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Nikki’s Answer

Here is a short list of skills that I found to be very valuable as a Financial Analyst:


Technical skills:
Being very comfortable with large amounts of data and having the ability to look at data in various angles, slicing/dicing, summarizing
Building a model that takes inputs, performs calculations and provides an output
SQL is very helpful (but not required)

Soft skills:
Analyzing data to identify historical trends
Ability to explain why trends are moving in a certain direction
Ability to provide recommendations based on analysis performed
Communicating analysis and recommendations to a target audience
Being curious about what drives growth/decline in your industry
Working with a team and aligning on common goals

Tools used in the job:
Excel for analysis, modeling and visualizing/presenting data
Powerpoint for presentations
Tools for pulling data (Essbase, SQL editors, Cognos, etc)


Thank you comment icon Thank you! Would you mind telling me how I can develop the soft skills you mentioned? Teresa
Thank you comment icon It does take some time to build on the soft skills I mentioned, but one way you can start developing good analytical skills is by putting some effort in working with data in your school projects. For example, if you are provided with a data set for a case analysis, spend some time summarizing the data in various ways and create a chart to trend the data over time. If there is an industry that you are interested in, challenge yourself to understand what drives sales for certain products in that industry. Hope this helps and good luck! Nikki Aquino
Thank you comment icon Your advice is useful! Thank you so much! Teresa
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Sabrina’s Answer

Use of excel functions (Example-vlookup,pivot tables), financial ratios (inventory turnover, internal rate of return, quick ratio, etc.) Presentation skills
Thank you comment icon Thank you! Teresa
Thank you comment icon Great answer Sabrina. I really like this one. I majored in accounting and started my career as an accountant. I took the college courses related to Microsoft Excel and databases (using MS Access) to learn these tools. You want to learn these tools to be a financial analyst - Excel is necessary. Knowing how to develop and use Access and other databases is good - but in my opinion, knowing how to use Excel is key. Joel Sung
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Doc’s Answer

While there are basic financial analyst skills, successful financial analysts possess essential qualities that put them ahead of the pack. If you want to provide value to your company and to excel in your career, you should strive to develop these unique abilities.

1.) EXCEPTIONAL LEADERSHIP – Those who succeed in financial analysis are those who are self-driven and who can motivate others to move forward. Leadership is the foundation on which effective communication, teamwork, project management and other daily tasks are built upon. Including your leadership experience in your resume may give you an edge over many other candidates. Leaders have the ability to transform.

2.) ANALYST EXPERIENCE – To be a good analyst, you will need to learn how to use the tools in spreadsheets and databases. These tools will assist you to combine disparate data, tackle problems and make presentations to the management. It is also important for you to know the style and preferences of your employer. Different managers will prefer different modes of data representation.

3.) TECHNOLOGICAL EXPERIENCE – There have been many technological advancements in business, and the financial services industry has not been spared. These developments have played a huge role in streamlining processes in this industry. This skill is increasingly becoming a necessity for all candidates. If you can acquire more than the minimum tech knowledge required, you will have an added advantage.

4.) INFORMATION IS KING – A good analyst will still be able to come up with valid conclusions even when they don’t have all the information. You should be able to have an educated gut feeling that tells you whether some information is relevant or not. It is being able to identify instances where continuing with the analysis will not help the process. It is the reason why most accountants and programmers may have a hard time becoming financial analysts; they are so hung up on order and numbers.

5.) CONFIDENT DECISION MAKING – As an analyst, you must understand the risks and consequences that would result from any decision you make. Most of the decisions you make will have a great impact on the company. This impact can be positive or negative. You should do proper research to ensure you have all the relevant information beforehand. It will make sure that the decision you make is the best for the firm or client.

Due to increased global competition and rapid changes in the industry, companies need to have stronger analytical abilities and to make better predictions to improve their financial results. Good analysts will be required to take up this responsibility. It is no wonder that it is one of the jobs with the highest starting salary. The competition will be high no doubt. You can stand out by acquiring the necessary financial analyst skills.

Hope this was helpful Teresa

Doc recommends the following next steps:

Accounting Skills – Including knowledge of standards and techniques, as well as calculating budgets, cost analysis.
Communication Skills – Financial analysts should also possess communication skills, as these skills can directly influence working relationships.
Problem-Solving Skills – Financial analyst need to have the ability to come up with creative solutions to financial issues should they arise.
Financial Literacy Skills –Financial analyst need to have the ability to decipher current investment markets and interest rates.
Analytical Skills – Financial analyst need to have the ability to forecast, prioritize, and recognize financial problems.
Thank you comment icon Thank you! Your advice is really helpful! I even have not thought of some of the you mentioned. Regarding the fourth ability, may I ask how should I develop it? Teresa
Thank you comment icon “You can’t see the forest for the trees.” Being able to a draw your conclusions even when the spreadsheet and database information is measurable, don't get fixated on individual details, or "trees," that he completely loses sight of the overall issue, or "the forest." Doc Frick
Thank you comment icon Understood! Thank you so much! Teresa
Thank you comment icon Hi Teresa, I added some additional required Financial Analyst Skills under next steps. Hold fast to dreams. Doc Frick
Thank you comment icon Thank you so much, John! I hope I can achieve my career goals soon! Teresa
Thank you comment icon Thank You Kathleen. The best way to find ourselves is to lose ourselves in the service of others. Doc Frick
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Bailey’s Answer

Analytical Skills, Computer Skills, Detail Oriented, Interpersonal skills, just to name a few!
Thank you comment icon Thank you! Teresa
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Ryan’s Answer

Hello,

The first skill that comes to mind is to be inquisitive and as curious as possible. Never being afraid to ask questions. Seek background on how things work, how decisions are made, and why.

Additionally, being willing and excited to learn new things. Let's not forget about expecting change to occur early and often, if you are able to adapt, you'll set yourself up for success. I can tell you that analysts are needed in so many types of businesses. You will find a lot of analysts that may not have started in that field, but their interests ended up guiding them to where their skills and interests fit best.

The technical skills - Learn as much about excel, R, SAS etc, as possible, take advanced courses (classroom and online).

Learn Powerpoint, Tableau, and other software as you will need to present your findings and recommendations to your audience.

A good start would be to look through the courses offered at your local community college, then Google to learn more about what they do and how they are used.

Best of luck to you. I trust you will do well.


Thank you comment icon Thank you. Could you tell me more about the personalities of financial analysts? Teresa
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Jack’s Answer

When I interview people for a business analyst position, here's what I tell them...
A beginning analyst makes a report for me and says "Here's the report you asked for."
A better analyst makes a report for me and says "Here's the report you asked for, take a look at the unusual stuff here and here."
The great analyst makes a report for me and says "Here's the report you asked for. I found unusual stuff here and here. The first one is a typo. I talked to the people that feed us the data and they'll have it fixed for next week's report. The second one might be a change in customer behavior that will affect our business, here's what I recommend we do next."

In summary, gather data, look for patterns and anomalies, and make recommendations. Very few people can do this when they start a job, but I think it's good to aim for.
Thank you comment icon Thank you. Do you have any advice for penultimate year students to land a financial analyst internship? Teresa
Thank you comment icon Penultimate year in high-school or college? Jack K.
Thank you comment icon Penultimate year in college Teresa
Thank you comment icon I completely agree with Justina's comment about internships. My company sends out campus recruiters every fall, so look for events like that at your school or other schools in the area. The recruiters are looking for both employees and interns. If there's a campus career center, they should have a schedule of job fairs. You should certainly also ask your favorite professors about opportunities. Some of my professors had consulting jobs during the summer, so they were connected with local businesses. Check out the websites of large employers in your area and see if you can find contact info for the recruiting department. Finally, don't forget about professional organizations like the CFA Institute (CFA stands for Chartered Financial Analyst). Jack K.
Thank you comment icon So I guess it also depends on business networks, right? Do you think LinkedIn is helpful in that? Teresa
Thank you comment icon It can be helpful, but it isn't magic. Speaking personally, if a friend of a friend reaches out to me, I'll ask my friend for an opinion. But that doesn't work for a friend of a friend of a friend. The more links in a connection, the weaker it is. It looks like you follow up with everyone who answers your question, so you've got networking skills. It wouldn't hurt to ask your contacts to send an intro email to someone they know. Then you can ask to set up a quick (15-30 min) chat to learn more about their company and what they do - an informational interview. If things go well you can ask them about anybody else you can talk to. As long as you're polite and don't spam anyone, the worst that can happen is somebody says no, in which case you're no worse off. Jack K.
Thank you comment icon Thanks for your advice! They are really helpful. I guess I could start building up my Linkedin profile first. Teresa
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Nicole’s Answer

Some basic skills for a financial analyst is understanding financial statements. Having an accounting background/knowledge is extremely helpful with this. It's not only about being able to read the financials, it's about understanding what steps it takes to produces the statement, how to do the journal entries, how to balance everything out. That's where having some experience with accounting helps tremendously.

Once you have the basics down, learning how to analyze trends and interpret the financial results is the next step. I was always amazed when I started my career how people who were well established could look at a financial statement and know if it was a strong company or not. Now, after almost 7 years, I'm one of those people. This skill takes time to develop and you continuously have to push yourself to step out of your comfort zone to learn something new. The more financial statements and exposure to all different types of companies you can get, the better off you will be.

To build on this skill, it helps to write about the trends you see and try to explain them, which is where the hard part comes in. I like to start by talking to the business owners. Hearing their story about their business, what they do, what changes the company has made in the last few years, what they are planning moving forward. Looking at the whole picture really adds details to the numbers and helps to explain what's going on with the company.

As I said, this isn't anything that happens over night. This skill takes time to develop. But if you continue to expose yourself to new businesses and industries, and find someone to give you a bit of guidance on your analysis skills, you can be one of those people someone new looks up to.
Thank you comment icon Thank you, Nicole! I am glad that I have taken some accounting courses before. I find your suggestion useful but as an undergraduate, I am not sure if I can get the chance to meet business owners. Is there any way to train the skills you mentioned? Teresa
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Aakriti’s Answer

A good financial analyst needs to be exceptional with numbers and have good analytical skills. Along with that, having good technical skills always helps. Make Microsoft Excel your best friend as most of your time will be spent analyzing numbers using this tool. It is also very important for an analyst to be able to present their numbers well, hence Microsoft Powerpoint is another tool you would want to master. Attention to detail, multitasking, good communication skills, being a team player and inclined towards problem solving are all the other good-to-have skills that will help you stand out. Good luck and hope this helps!
Thank you comment icon Thank you. I wish I can develop these skills during my internship. Teresa
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Samantha’s Answer

As a Financial Analyst, I feel there are various skills required to succeed. First, I feel knowing how to work with data and drive insights based on business need is crucial. Knowing Excel inside and out will save you a lot of time and effort and allow you to tell your story and provide insights through the data. I feel it is important to provide the story you are trying to portray with the data you have on hand. I will say that utilizing the tools you are given will make you more efficient. Keep learning as there are always new and innovative ways to succeed and push your company/manager to drive change as technology and data is always growing. Make sure you always pay attention to detail and always be as accurate as possible. If there is somewhere for you to check to see if your calculations are correct, then always take advantage of that. Communication is important as you will be communicating your finds to higher ups and will need to be clear and concise and present the information in a way that is useful for them and the greater organization.
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Florian’s Answer

Hi Teresa,

I have been working for 6 years now as a financial analyst.

From my perspective, this is more and more about being able to analyze the data, as the operational area is more and more automatized. This meaning that presentation skills and analytical skills are more and more important. You also need to be rigorous and thorough in what you do as you are manipulating the company's figures at the end of the day. Also as more and more thing are automatized, I find it important to always try to understand all the process, why we do thing the way we do, and always question things if something doesn't make sense to you, even if it has been always done like this.
A solid understanding of the accounting principles and standards will go a long way in terms of growing in your job.

In terms of tools, Excel is essential as well in having many tricks in your bags to manipulate the data you have. Also the data visualization software such as Qlik and Power BI are a great exposure to have and a good skill looked for employer in that area. Programming skill are also a good combination with the job if that's an interest to you, but not essential

Hope that helps and good luck with your career!
Florian
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HERMEN’s Answer

A big thing for financial analysts is being detailed oriented. Working with numbers and ratios requires an individual to be comfortable with numbers and the analysis of them. I would say to develop accounting skills early and really understand each line item to develop your financial acumen. Beyond that, understanding and building financial models really do bring everything full circle for you. All in all, interest and exposure in finance go a long way in jumpstarting your career in Finance.
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K MADHAVA’s Answer

Hello Everyone,
Below are the various skills required for a Accounting job
Accounting
Accounting Principles
Accounting Standards
Accounting Techniques
Averaging
Budgeting
Calculations
Cash Flow Management
Computer
Concentration
Cost Analysis
Cost Reduction
Data Processing
Financial Data
Financial Management
GAAP
General Ledger
Journal Entry
Mathematics
MS Excel
Profit and Loss
Quantitative Data
Reconciliations
Reconciling Balance Statements
Reporting
Sorting
Tax Filing
Tax Planning
Tax Reporting
Trial Balance
Working with Numbers
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Michael’s Answer

From my experience as a Financial Analyst, the technical skills of extracting data from a variety of systems is a key element and I used Excel and Tableau primarily, along with many internal systems. There are also financial tools/apps available that have many helpful functions, but in my position, those weren't needed.

As a Financial Analyst, a skill that can set you apart is being able to tell a brief compelling story from the mountain of data you've collected. I would also recommend developing the skill of telling your financial story in the business language and/or style of the audience you are presenting.

Whether its available or not, everyone needs the information yesterday, so the better skilled you are at providing answers and recommendations as close to a real-time basis the more valuable you'll be. Your financial models need to be built as agile as possible and there may be some programming/coding knowledge that may be helpful in preparing for this.

When I started in the Finance Analyst position I was certainly technically proficient, but the meetings, presentations and delivery expectations of providing information took some getting used to. Maybe the necessary skill here is researching some of the non-technical elements of the position so you can be better prepared.

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Adriana’s Answer


Hi Teresa,

The first skill you need is that you like it because if you like it, it will be easier to develop yourself as a financial analyst. You must know the financial statements, do analysis on them so you can give comments to the business and recommendations. I consider it is important that you master Excel, power point, a sense of leadership, curiosity, but above of all, your security and commitment to always want more.
Thank you comment icon Thanks! I am trying to explore more aspects of this position to see if I am really interested in it. Teresa