What is a Financial Analyst?
A financial analyst gathers and interprets data about securities, companies, corporate strategies, economies, or financial markets. Financial analysts are sometimes called securities analysts, equity analysts, or investment analysts (although there is a distinction among these titles).
How Does a Financial Analyst Work?
Financial analysts work for public and private companies, nonprofit organizations, investment banks, brokerage firms, insurance companies, government entities, and nearly any other organization that is concerned about making sound financial decisions.
Much of a financial analyst's job involves gathering data from publications, researchers, and other sources; creating financial models; and writing reports or making presentations. Analysts are heavily involved with mergers and acquisitions, consulting, corporate strategy, bankruptcy, and a myriad of other financially important processes. Their projects can be wide-ranging, including anything from creating a company's budget for the coming years to evaluating the prospects for a particular security to deciding how much to pay to acquire a certain company.
Many financial analysts go on to become senior analysts, investment bankers, consultants, advisors, and chief financial officers.
Why Does a Financial Analyst Matter?
Financial analysts carry a great degree of responsibility. The results of their analyses frequently determine the course of major decisions, and a mistake or an overlooked piece of information could mean inadvertently making the wrong decisions, which could have far-reaching effects on client portfolios, corporate strategies, or even a company's solvency.