Career in Financial Analysis: Progress and Outlook

Financial analysis has become one of the most popular career options for both finance professionals and freshers from different fields. But why has it become a popular career option for many? The bright career prospects and the handsome salaries offered by top MNCs and financial institutions are one aspect of it.

What is also driving many professionals towards it is the job satisfaction and the steady growth that the sector is experiencing. The global market for financial analysis and analytics market is growing at a steady CAGR (Compound Annual Growth Rate) of 10.7%. This means that the market value of this sector will rise to a whopping 11.4 billion by 2023.

The job of a financial analyst is coveted among both analysts and professionals in the sector of finance. According to Forbes, a financial analyst is one of the most promising jobs in terms of both career growth and prospects.

If you are asking yourself and thinking about how to become a financial analyst, a wise option would be to scope out a structured and well-designed financial analysis course.

For instance, you can take up finance courses in India that cover technologies financial analysts use, or you can directly go for integrated financial analyst courses.

Having said that, Now, let’s look at what financial analysis isis financial analysis. It is the branch of analysis that deals with transactions, investments, ventures, and businesses (projects or operations). This kind of analysis deals with numerical metrics, performance metrics, and valuation. For instance, financial analysis helps evaluate if assets are liquid, stable, or profitable.

Financial analysis even deals with assessing the value of ventures and how much of a risk the organization will be incurring when going ahead with a business decision. Financial analysts help stakeholders, management, or project managers take data-driven action to maximize profit and cut costs or reduce risks.

Let’s take the example of a company wishing to compare two projects or assets. Using the methods of financial analysis, the company can estimate the valuation of these assets and project how much money the assets can generate for the company in the future. By analyzing this, the company can then make a data-driven decision of holding one or both of these assets or liquidating them.

Similarly, for projects, financial analysts can measure the operational costs of the projects and incorporate performance benchmarks to optimize costs. For instance, a company might be able to increase the efficiency of the project by utilizing machines, manpower, energy, or infrastructure better.

Financial analysts help companies identify these areas where the company can cut costs or make better use of assets or personnel. Analysts in this field also evaluate the performance of their employers or clients in the market or in terms of finances. Skilled financial analysts find themselves in the position of Finance Heads, Finance Directors, and Chief Financial Officers.

Financial Analyst: Job Roles, Skills Required, and Career Progress

What does a financial analyst do?

Financial analysts generate and analyze reports to suggest the best course of action for businesses. These decisions are mostly finance-oriented and help the companies either cut costs or increase the performance of ventures, investments, or assets. Financial analysts must be aware of the market and the business goals of the company, to help the company carry out its operations in a more optimal manner during risky fiscal periods or when companies face financial risks.

Analysts in this sector also analyze the financial performance of the company or help the clients of a firm make financially-viable decisions or investments. The primary task of financial analysts is to suggest the best possible way to meet organizational or financial goals (target profit or growth) through the use of various analytics tools

The responsibilities of a financial analyst are as follows

• Analysis of financial data
• Preparation of reports
• Identification of trends and patterns
• Optimizing financial performance
• Analysis of investments, assets, projects, and business processes
• Forecasting and predictions
• Preparation of financial models or profit plans
• Identification of good and bad business ventures
• Collaboration with finance departments and project heads
• Communicating with investors, clients, and stakeholders

Skills Required for Financial Analyst Jobs

If you are wondering how to become a financial analyst in India, the usual first step is to have a bachelor’s degree in finance and/or a related field. However, even if you are a graduate from a different background and you have the will to learn, you can opt for comprehensive finance courses in India or upskill with industry-oriented financial analyst courses to strengthen your foundations in finance and general accounting.

This will help you learn all the techniques and technologies that you will need to carry out the daily tasks of a financial analyst. Along with this, you will also need to strengthen your foundations in mathematics and statistics as these are essential for financial analysis.

But this is not all, as financial analysts must also have excellent soft skills and basic computing skills for analytics tools and accounting programs.

Here are the top skills that financial analysts must have:

1. Logical and critical thinking: For helping their employers make data-driven financial decisions such as holding or selling assets. Mathematical thinking is also essential important for financial analysts.
2. Foundational accounting skills: For cost analysis, cash flow management, financial model creation, and budget calculation. Financial analysts must know accounting principles and accounting ratios.
3. Communication and interpersonal skills: For interacting with management, project managers, clients, investors, representatives, and stakeholders. Soft skills are as essential as technical skills for financial analysts as a lot of their tasks involve convincing stakeholders, management, investors, and clients.
4. Technical skills: For using accounting programs, analysis tools, bookkeeping software, SQL, SAP, and other ERP systems (Enterprise Resource Planning). Financial analysts must also be able to create reports and presentations.
5. Strategic and leadership skills: For making decisions and approaching situations in a planned and analytical manner. Financial analysts also head finance teams or departments in companies;, thus, leadership and management skills are essential.
6. Other organizational skills: For meeting deadlines and paying extra attention to their work.

Globally, financial analysts make around $62,828 to $76,970 per annum on average. However, in countries where top MNCs (investment banks, corporate banks, IT giants, etc.) have their headquarters, financial analysts can earn even more on average.

Financial analysts earn lucrative salaries in India as well. On average, financial analysts earn ₹4,23,012 per annum in India. While freshers and entry-level financial analysts with less than one year of experience earn an average salary of ₹3,48,050 per annum (based on 579 salaries), entry-level professionals with 1 to 4 years of experience earn ₹3,97,945 annually on average (based on 1634 salaries).

Senior analysts in this sector earn an average of ₹6,07,220. Financial analysts with more than 10 years of experience earn an average salary of ₹8,72,444 annually (based on 138 salaries), while analysts having more than 20 years of experience get compensated ₹13,47,500 on average per annum.

Career Outlook

The career outlook of financial analysts looks great in the coming years, especially with the domain experiencing a CAGR of 10.7% globally. By next year (2023), the total valuation of financial analysis as a sector will be a massive $11.4 billion. This will lead to more jobs opening up and more career prospects for both freshers and professionals already in this field.

At any given time, a quick search on Linkedin for financial analyst jobs would fetch you thousands of results in India.

Businesses of all sizes need to analyze their financial performance and make data-driven decisions. Thus, financial analysts will always be in demand. Financial analysts will also always find themselves being required for helping companies cut costs and optimize their operational performances to increase revenue.

When talking about the general financial analyst career path in India, Analysts can get promoted to Senior Analysts in 3 to 5 years. From here on, one can choose to establish their own consultancy services or work with larger organizations with progressively senior job roles. Financial analysts can also choose to get into risk management, asset management, third-party evaluations, and financial (or investment) consulting.

Financial analysis is one of the most promising domains in India. A simple search on LinkedIn throws up over 9000 results for available jobs currently.

There is rapid career progression in this sector, with many analysts finding themselves in the position of Financial Directors, Vice-President of Finance Departments, Senior Risk Managers, Risk Officers, Senior Credit Analysts, and Finance Heads. Very skilled financial analysts also become local partners of top MNCs such as PWC, KPMG, Deloitte, and EY. Other talented financial analysts also find themselves heading companies as CFOs or Chief Financial Officers.

The salary trajectory has been promising for financial analysts, and it shows no signs of falling anytime soon.

Financial analysis is a very sensitive sector, and financial analysts must be very skilled in management, analysis, and general accounting. To build the right skills, it is advised to pick the right financial analysis course.

Check out Hero Vired’s Certificate Program in Financial Analysis, Valuation & Risk Management to find out about the technologies and tools that will help you become a financial analyst. The program also features workshops and projects that work well in shaping future finance professionals.