Financial analyst

A financial analyst


Financial analysts conduct economic research and elicit valuable analyses on financial matters such as profitability, liquidity, solvency, and asset management. They provide recommendations on financial matters for decision-making processes. Financial analysts work in both the public and the private sector.

Financial analysts typically do the following duties:

  • Assist in the development of financial plans, budgets, and forecasts.
  • Analyze financial statements, performance metrics, and economic indicators to assess the organization’s financial health.
  • Identify trends and patterns in financial data to provide insights into business performance.
  • Evaluate the costs and benefits of various projects, initiatives, or investments.
  • Assess investment opportunities and provide recommendations based on risk and return considerations.
  • Prepare financial reports and presentations for management, stakeholders, and regulatory bodies.
  • Investigate and explain variances between budgeted and actual financial performance.
  • Develop and maintain financial models to support strategic decision-making.
  • Identify and analyze financial risks, proposing strategies to mitigate potential negative impacts.
  • Stay informed about industry trends, economic conditions, and changes in financial regulations.

Other titles

The following job titles also refer to financial analyst:

banking analyst
company analyst
economic analyst
financial markets forecaster
treasury analyst
financial researcher
m&a analyst
credit analyst
financial markets report writer
stock market analyst
financial markets specialist
capital markets analyst
structured finance analyst
financial markets analyst
financial markets researcher

Working conditions

Financial Analysts typically work in office settings, collaborating with various departments, including finance, accounting, and management. The role involves extensive use of financial modeling tools, spreadsheet software, and enterprise resource planning (ERP) systems. The working conditions may include tight deadlines, especially during budgeting and reporting cycles.

Minimum qualifications

A bachelor’s degree in finance, accounting, economics, or a related field is commonly required for Financial Analyst positions. Many analysts also pursue advanced degrees such as a Master’s in Business Administration (MBA) or professional certifications like Chartered Financial Analyst (CFA) or Certified Public Accountant (CPA). Strong analytical skills, attention to detail, and proficiency in financial analysis tools are essential. Practical experience gained through internships or entry-level positions contributes to the development of financial analysts. Continuous learning, staying updated on financial regulations, and obtaining relevant certifications enhance the ongoing success of Financial Analysts in supporting organizational financial decision-making.

ISCO skill level

ISCO skill level is defined as a function of the complexity and range of tasks and duties to be performed in an occupation. It is measured on a scale from 1 to 4, with 1 the lowest level and 4 the highest, by considering:

  • the nature of the work performed in an occupation in relation to the characteristic tasks and duties
  • the level of formal education required for competent performance of the tasks and duties involved and
  • the amount of informal on-the-job training and/or previous experience in a related occupation required for competent performance of these tasks and duties.

Financial analyst is a Skill level 4 occupation.

Financial analyst career path

Similar occupations

These occupations, although different, require a lot of knowledge and skills similar to financial analyst.

cost analyst
investment analyst
investment fund management assistant
securities analyst
investment manager

Essential knowledge and skills

Essential knowledge

This knowledge should be acquired through learning to fulfill the role of financial analyst.

  • Financial management: The field of finance that concerns the practical process analysis and tools for designating financial resources. It encompasses the structure of businesses, the investment sources, and the value increase of corporations due to managerial decision-making.
  • Microeconomics: The economic field that studies the behaviour and interactions between specific actors of the economy, namely consumers and firms. It is the field that analyses the decision-making process of individuals and the factors that influence purchasing decisions.
  • Statistics: The study of statistical theory, methods, and practices such as collection, organisation, analysis, interpretation and presentation of data. It deals with all aspects of data, including the planning of data collection in terms of the design of surveys and experiments in order to forecast and plan work-related activities.
  • Economics: Economic principles and practices, financial and commodity markets, banking and the analysis of financial data.
  • Business processes: Processes that an organisation applies to improve efficiency, set new objectives and reach goals in a profitable and timely manner.
  • Macroeconomics: The economic field that studies the performance and behaviour of all the sectors of an economy aggregated. This field evaluates the financial performance of a country and considers indicators such as gross domestic product (GDP), price levels, unemployment rates, and inflation.
  • Accounting: The documentation and processing of data regarding financial activities.

Essential skills and competences

These skills are necessary for the role of financial analyst.

  • Perform business research: Search and collect information relevant to the development of businesses in different fields ranging from legal, accounting, and finance up to commercial matters.
  • Perform business analysis: Evaluate the condition of a business on its own and about the competitive business domain, perform research, place data in the context of the business needs, and determine areas of opportunity.
  • Interpret financial statements: Read, understand, and interpret financial statements’ key lines and indicators. Extract the most important information from financial statements depending on the needs and integrate this information in developing the department’s plans.
  • Advise on financial matters: Consult, advise, and propose solutions about financial management such as acquiring new assets, incurring investments, and tax efficiency methods.
  • Prepare financial projections: Gather financial data, conduct analyses, and develop financial projections for small and big businesses.
  • Consider economic criteria in decision making: Develop proposals and take appropriate decisions taking into account economic criteria.
  • Create a financial report: Finalise project accounting. Prepare an actual budget, compare the discrepancy between the planned and actual budget, and draw final conclusions.
  • Offer financial services: Provide a broad range of financial services to clients such as assistance with financial products, financial planning, insurance, money, and investment management.

Optional knowledge and skills

Optional knowledge

This knowledge is sometimes, but not always, required for the role of financial analyst. However, mastering this knowledge allows you to have more opportunities for career development.

  • Mergers and acquisitions: The process of joining together separate companies and relatively equal in size, and the purchase of a smaller company by a bigger one. The financial deals, the legal implications, and the financial records and statements consolidated at the end of the fiscal year.
  • Financial products: The different types of instruments that apply to the management of cash flow that are available on the market, such as shares, bonds, options or funds.
  • Financial forecasting: The tool used in performing fiscal financial management to identify revenue trends and estimated financial conditions.
  • Cost management: The process of planning, monitoring and adjusting the expenses and revenues of a business in order to achieve cost efficiency and capability.
  • Cost metrics: Know various routing protocols to calculate itineraries; compare different possible routes and determine the most efficient one. Understand topological and link-state databases.
  • Stock market: The market in which shares of publicly held companies are issued and traded.
  • Public offering: The elements comprised in public offerings of companies in the stock market such as determining the initial public offering (IPO), the type of security, and the timing to launch it in the market.

Optional skills and competences

These skills and competences are sometimes, but not always, required for the role of financial analyst. However, mastering these skills and competences allows you to have more opportunities for career development.

  • Explain financial technicalities to clients: Explain all details of financial products in plain words to clients, including financial terms and all costs.
  • Advise on tax planning: Advise on appropriate strategies to include taxes in the overall financial plan to reduce the tax load. Advise on questions related to tax legislation and provide advice on the possible implications that decisions in financial matters can cause in a tax declaration… Advise on questions concerning things such as company creation, investments, recruitments, or company successions.
  • Develop investment portfolio: Create an investment portfolio for a customer that includes an insurance policy or multiple policies to cover specific risks, such as financial risks, assistance, reinsurance, industrial risks or natural and technical disasters.
  • Provide cost-benefit analysis reports: Prepare, compile, and communicate reports with broken-down cost analysis on the proposal and budget plans of the company. Analyse the financial or social costs and benefits of a project or investment in advance over a given period of time.
  • Create a financial plan: Develop a financial plan according to financial and client regulations, including an investor profile, financial advice, and negotiation and transaction plans.
  • Handle mergers and acquisitions: Handle the negotiation of financial deals and the legal implications of purchasing a company from another or in merging separate companies.
  • Analyse financial performance of a company: Based on accounts, records, financial statements and external information of the market, analyse the performance of the company in financial matters in order to identify improvement actions that could increase profit.
  • Monitor stock market: Observe and analyse the stock market and its trends daily to gather up-to-date information in order to develop investment strategies.
  • Monitor loan portfolio: Control the ongoing credit commitments to detect anomalies related to the schedules, refinancing, approval limits etc., and to identify improper disbursements.
  • Ensure compliance with disclosure criteria of accounting information: Revise the accounting information of the company to make sure it meets the commonly agreed criteria for its disclosure such as understandability, relevance, consistency, comparability, reliability, and objectivity.
  • Assess financial viability: Revise and analyse financial information and requirements of projects such as their budget appraisal, expected turnover, and risk assessment for determining the benefits and costs of the project. Assess if the agreement or project will redeem its investment, and whether the potential profit is worth the financial risk.
  • Analyse financial risk: Identify and analyse risks that could impact an organisation or individual financially, such as credit and market risks, and propose solutions to cover those risks.

ISCO group and title

2413 – Financial analysts

  1. Financial analyst – ESCO
  2. Financial Analyst Job Description |
  3. Financial Analyst Job Description Template |
  4. Featured image: Photo by Chris Liverani on Unsplash
Last updated on December 26, 2023