Financial analysis involves evaluating financial information to assess the viability, stability, and profitability of a business, project, or budget. It analyses and improves a company's performance and identifies projects or companies for investment. Financial data is examined using ratios and other techniques to examine a company's liquidity and solvency.
To become a financial analyst, one must have a bachelor's degree in finance, accounting, economics, or a related field. A career in financial analysis is just right for those who are good with numbers and have an analytical bent of mind.
Read on to learn the top 9 reasons why choosing a career in financial analysis can be rewarding.
Reasons to opt for a career in financial analysis
Financial analysis is a promising career path for anyone with a mind for business, a big-picture outlook, and strong communication skills. Financial analysts can work in various industries, studying economic trends, making predictions, and offering investment recommendations.
Here are the top reasons to choose a career in financial analysis:
The expansion of the financial services sector has resulted in a growing demand for financial analysis. Becoming a financial analyst may provide a variety of job opportunities and promotion prospects.
Diverse Career Opportunities
Financial analysts work in various sectors, including banks, insurance companies, and pension funds. They evaluate financial data and economic trends to guide investment decisions. There are various job roles in financial analysis, including portfolio management, market research, and financial risk analysis which one can choose according to his/her preference.
Stable Industry Growth
Financial analysis is one of the most promising domains in terms of industrial stability. With the expansion of the finance sector, new financial products are launched daily. It guarantees that new opportunities are always on the horizon, creating a constant demand for financial analysis.
Financial analysis demands strong analytical and problem-solving abilities and the capacity to investigate and evaluate large volumes of data from various sources. Financial statement preparation and ratio calculations are additional tasks for financial analysts that can challenge their intellectual prowess. Thus, it is perfect for those looking for a career that constantly challenges their abilities and pushes them to think beyond the ordinary.
A beginner with 1-4 years of experience earns an average of Rs 3.8 lakhs per annum. The average salary of an experienced financial analyst in India is around Rs 6.5 lakhs per year. Financial analysts working as sell-side analysts for a big investment bank earn a more handsome salary. Their job involves compiling data on the bank's stocks and bonds and using quantitative analysis to help banks price their investment products.
Financial analysts aid businesses and private investors in making wiser financial decisions. They assess investment possibilities, develop financial models, and provide recommendations for individual investments and asset portfolios. In addition, their responsibilities include evaluating the performance of stocks, bonds, and other investment vehicles.
Financial analysis as a career offers great job security. It is important for individuals who want to feel secure in their employment. Around 76% of finance and accounting workers feel secure in their employment and 78% believe their companies have a great future.
Financial analysts must have critical thinking, analytical, and presentation skills, as well as an understanding of finance and economic terms, financial regulations, and financial modelling. These skills are transferable to other industries and can also be valuable assets in other roles.
Financial analysis is a good starting point for a career in finance or business because it provides professionals with a combination of technical and soft skills that are transferable to other related roles. For example, financial analysts can use their technical skills to become financial managers or investment bankers. They can also use their soft skills to become consultants or business analysts.
Collaborative environments are essential in financial analysis, as teamwork can increase productivity and create a positive atmosphere for collaboration. Many financial analyst positions require collaboration with other departments, such as building sales models or combining data to create an overall business model.
Collaborative working can also lead to better on-the-job performance rates. If one enjoys working in a team environment and values collaboration, then a career in financial analysis may be a good fit.
Imarticus Learning offers a Financial Analysis Prodegree programme in collaboration with KPMG. The programme has an industry-aligned curriculum, which includes fundamental accounting and financial modelling, financial statement preparation, balance sheet, profit and loss statement, and cash flow statement analysis.
Further, the programme is project-based, helping students acquire practical skills essential for a career in financial analysis. Contact Imarticus to kickstart your financial analysis career today!