Financial Analyst

WHAT IT IS

Key Role Dimensions

Collecting and analyzing financial information: Budgets, operations performance data, economic forecasts, trading volumes and cash flow are examined to provide advice for the company or the company’s clients. 

Researching and modelling economic conditions and company fundamentals:  Micro- and macroeconomic forecasts are used to make business, sector and industry recommendations and decisions.

Generally work independently: May also need to reach out to co-workers as sources of information.

Focus Areas

While the core functions of the Financial Analyst are the same across all industries, the areas of focus typically differ inside and outside the corporate finance sector.

Typical Analyst roles in the corporate finance sector include: 

• Financial Reporting Analyst: Analyze the firm’s financial statements and look at trends and/or variances in the financial data (actual versus budget) to generate possible explanations. 
• Management Reporting/Performance Analyst: Analyze the performance of specific parts of a firm, analyzing financial data by product line, department, geography, etc.
• Treasury Analyst: Analyze the firm’s cash flow: Reconcile bank deposits and withdrawals against bank statements or expenditures against cash balances, produce interest schedules or track inter-company loans and the related interest payments to ensure the organization and its departments have adequate cash flow.
• Taxation Analyst: Help the organization meet its income tax reporting and compliance obligations. May be responsible for portions of the Canadian quarterly tax provision process, assist in the preparation of federal and provincial income tax returns or collect data from other areas of the organization to build the tax fact base.

Analyst roles outside of the corporate finance area include:

• Credit Analyst: Work for organizations that lend money, such as banks and credit unions, and assess the credit worthiness of loan applicants. Also see Risk Adjudicator.
• Investment Analyst:Work for a bank, mutual fund, pension fund, hedge fund, insurance company, etc., to research and evaluate the performance of the firm’s investment portfolios and provide guidance on the firm’s investment strategies. See Research Analyst.
• Performance Analyst: Help organizations manipulate large volumes of operational data while identifying trends and patterns critical for decision making. See Performance Analyst.

WHAT IT TAKES TO SUCCEED

Key Job Accountabilities

Financial Analysts generally engage in:

Compiling & Researching:

• Aggregate and analyze a broad array – and large volume – of data.
• Obtain current and historical information from the firm’s financial statements and in-house financial systems and collect explanations on the data and the variances in the data (Financial Reporting Analysts).
• Assist business line managers with variance analysis information (e.g. actual vs budget) related to specific products, departments or geographies (Management Reporting Analyst).

Data Modelling & Analysis:

• Participate in budgeting and forecasting/planning activities.
• Build financial models upon which to perform sensitivity analyses such as ‘what if?’scenarios.
• Plan short-, mid- and long-term cash flows and assess financial performance.

Reporting & Data Interpretation:

• Prepare reports that interpret financial results to help identify, recommend and support potential courses of action.
• Provide accurate weekly/monthly forecasts noting significant trends and their implications.
• Participate in regular financial statement reviews and variance analyses (Financial Reporting Analysts).

Knowledge, Skills & Experience

Must-haves:

• Financial Analysis Skills: Ability to interpret complex data to demonstrate patterns and trends, make recommendations and draw conclusions
• Detailed knowledge of data mining, warehousing, processing and reporting techniques (e.g. SAS and Teradata)
• Knowledge of regulatory and legislative policy and procedures for the financial sector
• Knowledge of economics, accounting principles, financial markets and banking
• Data Interpretation, Sense-making & Communication: Ability to assimilate/summarize large amounts of information from multiple sources and communicate findings to stakeholders

Nice-to-haves:

• Experience in an accounting role

Education & Credentials

Entry-level positions typically require:

• Undergraduate university degree

In the fields of:

• Business
• Economics
• Mathematics
• Finance
• Accounting

More senior positions typically require:

• Graduate degree

In the fields of:

• Business Administration (MBA)
• Master of Science, Finance (MSF)

Employers in different segments may require candidates to possess one or more of these designations:

• Canadian Securities Course (CSC) 
• Certified International Investment Analyst (CIIA) 
• Chartered Financial Analyst (CFA) 
• Chartered Professional Accountant (CPA)