What does a financial analyst do?
Financial analysts review a company’s financial data to create detailed records and forecast potential trends. Compiling past data, financial analysts spot trends and make suggestions for maximizing potential, such as allowing for employee innovation. This role also reviews financial statements to determine the value of a company and calculate its overall financial well-being.
Financial analyst positions require a bachelor’s degree, possible certifications and licensing and sometimes a year of relevant experience.
To become a financial analyst, students must complete a four-year degree in a relevant concentration. Finance, accounting and business-related fields offer courses on accounting and some of the basic factors that go into creating a financial analysis. Students may also choose to pursue a license from the Financial Industry Regulatory Authority if they want to sell financial products as well.
While some financial analyst roles are entry-level, incoming professionals may need to gain a year of relevant work experience first. Entry-level roles like junior auditor or accountant allow newcomers to learn about tracking company records and building financial models. With this knowledge, professionals can quickly transition into financial analyst roles and earn their Chartered Financial Analyst (CFA) certification after four years on the job.
Financial analysts in the U.S. earn an average base salary of $82,983, but can go on to earn six figures.
According to Built In’s salary tool, financial analysts in the U.S. receive an average base salary of $82,983. Top performers can secure an additional cash compensation of $15,467 and elevate their total compensation to $98,450. While entry-level financial analysts may begin with salaries around $38K, professionals can accumulate experience and go on to make as much as $180K.
Financial expertise, research and an analytical mindset are all must-haves for financial analysts.
It should come as no surprise that financial expertise stands as one of the critical skills for financial analysts to master. Having a strong background in finance enables analysts to assess financial situations, develop accurate forecasts and recommend actions that companies can take to sustain and improve their financial health.
However, financial analysts must also rely on the ability to conduct research and apply analytical thinking. A large part of an analyst’s daily routine involves compiling data and studying market trends. After gathering this info, financial analysts must then be able to analyze data, recognize trends and decide on an appropriate course of action to avoid financial risks. The most successful financial analysts are able to navigate these diverse aspects of their positions, balancing their financial experience with a research-heavy approach.