How to become a Financial Analyst

Overview, Courses, Exam, Colleges, Pathways, Salary

Finance and Accounts


Who is Financial Analyst ?

Financial analysts are responsible for assisting their employer to make financially sound decisions. They are entrusted with the financial planning activities for the company. Their primary aim is to use a data-driven approach to anticipate risks and to provide recommendations in the form of financial precautions to the same. They start by obtaining a thorough understanding of the company's objectives and its current status. By forecasting the financial future of the company's revenue and expenditure, the financial analyst shall streamline all relevant processes to improve the financial performance of the company.

They advise companies regarding potential risks and costs associated with any business decision based on detailed predictions about the outcomes of these decisions. Their work is important for a company to increase revenue by maximising upon investment opportunities, reduce costs, and manage assets. A financial analyst is crucial to the fiscal health of a company. They drive the company's present value and future performance in terms of business. 

Here are some steps to becoming a Financial Analyst

  1. Educational Background: Obtain a Bachelor's degree in a relevant field such as Finance, Accounting, Economics, Business Administration, or Mathematics. Many financial analysts also hold advanced degrees like a Master's in finance or an MBA, which can provide a competitive edge in the job market.
  2. Develop Analytical Skills: Financial analysts need strong analytical skills to interpret data, assess investment opportunities, and make recommendations. Take courses or engage in self-study to improve your analytical abilities.
  3. Gain Proficiency in Excel: Excel is a fundamental tool in financial analysis. Learn how to use it proficiently for data analysis, financial modeling, and creating reports.
  4. Understand Accounting Principles: A solid grasp of accounting principles is essential as financial analysts often work with financial statements, balance sheets, income statements, and cash flow statements.
  5. Learn Financial Concepts and Ratios: Familiarize yourself with financial concepts like ROI (Return on Investment), NPV (Net Present Value), IRR (Internal Rate of Return), and other financial ratios commonly used in analysis.
  6. Stay Informed about the Financial Markets: Keep up-to-date with financial news, market trends, and economic indicators that may impact investment decisions.
  7. Develop Communication Skills: Financial analysts must communicate their findings and recommendations effectively to clients, colleagues, or management. Work on improving your written and verbal communication skills.
  8. Consider Certifications: Earning certifications can enhance your credibility and marketability. Two common certifications for financial analysts are the Chartered Financial Analyst (CFA) and the Financial Risk Manager (FRM) designations.
  9. Internships and Entry-Level Positions: Look for internships or entry-level positions in finance or related fields. Gaining practical experience will provide valuable insights and skills necessary for a career as a financial analyst.
  10. Networking: Attend industry events, join professional organizations, and connect with professionals in the financial sector. Networking can lead to valuable opportunities and insights into the industry.
  11. Build a Strong Resume and Cover Letter: Highlight your relevant skills, education, and experience when applying for financial analyst roles in your resume and cover letter.
  12. Prepare for Interviews: Practice common interview questions related to financial analysis and investment scenarios. Showcase your ability to analyze data and provide well-reasoned insights.
  13. Continuous Learning: Financial markets and regulations are ever-changing. Stay updated with industry trends, new technologies, and evolving financial instruments.
  14. Specialization: Consider specializing in a particular industry or sector, such as healthcare, technology, or real estate. Specialization can make you more attractive to employers in those sectors.
  15. Career Advancement: As you gain experience, seek opportunities for career advancement, such as becoming a senior financial analyst or moving into portfolio management or investment banking.

Typical day at work

What does Financial Analyst do?

 Following are the duties of a financial analyst:

  • Assemble, organize, and summarize financial data to examine the current financial standing in relation to the company's goals.
  • Perform financial forecasts and construct financial models to predict future changes in the economy, market, and other variables.
  • Analyse financial performance in comparison to the forecasts and identify trends, patterns.
  • Examine the causes of the variance between the forecasts and actuals.
  • Evaluate the capital expenditure and depreciation.
  • Examine the current and past financial data, including business plans, patterns.
  • Generate and analyze financial reports to be presented to the upper management. 
  • Make suggestions regarding the budgets and investment opportunities.
  • Provide policy recommendations and measures to reduce costs for financial growth.
  • Maintain up-to-date knowledge about the market trends, relevant software.

Abilities and Aptitude needed

What are the skills, abilities & aptitude needed to become Financial Analyst?

For one to be adept at this job, strong quantitative skills are required, with excellent critical thinking skills and superior analytical abilities. Proficiency in financial modelling practices along with the advanced knowledge of relevant software packages is necessary to analyze data, monitor trends, and perform financial forecasts. Ease in interacting with the upper-level executives supplemented by the ability to report financial data and communicate findings through clear and concise written reports or presentations is another necessary factor. Interpersonal skills must be developed excellently since they shall be frequently put to use.

Additionally, knowledge of the relevant laws and regulatory practices is a must. Business acumen and expert knowledge about the industry and market trends are essential to success in this job. They should continually take measures to stay updated with the current market trends and industry updates. A keen eye for detail and meticulous organization skills shall be required to handle large amounts of data.


Salary for Financial Analyst?

Salary information for Financial Analysts in India:

  • Minimum Monthly Salary: For entry-level Financial Analysts or those working in smaller companies or regions with lower living costs, the monthly salary may range from INR 25,000 to INR 40,000, especially when starting their careers.
  • Maximum Monthly Salary: Experienced and successful Financial Analysts working in top-tier financial firms or multinational corporations can earn a maximum monthly salary of INR 1,00,000 to INR 2,00,000 or more. Financial Analysts in specialized areas such as investment banking or private equity sectors may command even higher salaries.
  • Annual Salary: The annual salary of a Financial Analyst in India can be from INR 3,00,000 to INR 15,00,000 or higher, depending on factors such as the size and reputation of the company, location, level of experience, and the specific industry within finance.
  • Highest Paying Job and Scope: The highest-paying jobs for Financial Analysts in India are often found in large financial institutions, investment banks, asset management firms, and consulting companies. Senior Financial Analysts and those with expertise in financial modelling, risk management, or strategic planning tend to earn higher salaries. Professional certifications like CFA (Chartered Financial Analyst) or FRM (Financial Risk Manager) can also significantly enhance earning potential.The scope for Financial Analysts in India is promising as the country's financial sector grows and becomes more sophisticated. Financial Analysts play a crucial role in analyzing market trends, making investment recommendations, managing financial portfolios, and supporting corporate decision-making. 

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How to become an Financial Analyst?

Entrance Exam

Entrance Exam for Financial Analyst ?

If you survive the first couple of years and are passionate about what you are doing, then, by all means, dream big. But these dreams come at a stiff price, in this case, more hard work in the form of certification. Now, certification is not a must but it will instantly boost your career prospects. you can obtain certification from the Telangana-based Institute of Chartered Financial Analysts of India.


Which course I can pursue?


Which Industries are open for Financial Analyst?

  • Banking
  • Corporate Finance
  • Wealth Management
  • Equity Research
  • Leasing
  • Insurance Management
  • Business and Financial Consulting
  • Merchant Banking
  • Portfolio Management
  • Corporate Treasuries
  • Real Estate and Commodity Markets
  • Mutual Funds
  • Investment Banking
  • Project Appraisal
  • Corporate Laws
  • International Accounting
  • Quantitative Techniques
  • Managerial Economics
  • Organizational Behavior


Are there internships available for Financial Analyst?

List of common places where you might find internships for Financial Analyst roles are as follows : 

  • Company Websites: Check the career or job sections of financial institutions, banks, investment firms, and other companies that employ financial analysts. Many organizations post their internship opportunities on their websites.
  • Online Job Platforms: Utilize job search platforms like LinkedIn, Indeed, Glassdoor, and intern-specific websites. These platforms often have filters to narrow your search based on location, company, and job title.
  • Networking: Attend industry events, job fairs, and networking sessions related to finance. Connect with professionals in your field on LinkedIn and express your interest in internship opportunities.
  • University Career Services: Many universities have career services offices to help you find internships or connect you with relevant opportunities.
  • Financial Associations: Look for internships offered by financial professional associations or societies. They might have specialized programs for students pursuing careers in finance.
  • Internship Programs: Some companies participate in structured internship programs designed to provide valuable experience to students and young professionals.
  • Alumni Connections: Reach out to alumni from your university working in finance and inquire about potential internship openings at their companies.
  • Cold Applications: If you have a particular company in mind, consider sending a well-crafted cold email or application expressing your interest in interning with them.

Career outlook

What does the future look like for Financial Analyst?

Financial analysts are most commonly employed by investment banking firms, research sales and trading, commercial banks, the real estate industry, private equity firms. Among the accounting and finance workforce, these professionals are one of those in most demand. As more businesses are being established and existing ones clamour to expand, there is an increase in demand for a financial analyst to ensure the financial growth of these businesses. It is primarily a desk job with standard business hours of work. The individual shall need to stay on top of all finance related news throughout their career to ensure the reliability of their skills.

Travelling to attend conferences and business meetings can be expected for a financial analyst job. While they work independently, they are also to work collaboratively with professionals from other departments and senior management. It is common for them to become investment advisors or work independently as consultants after spending a considerable amount of time in the industry.

Frequently Asked Questions:

1. What is the qualification for a financial analyst? 

Answer: The typical qualification for a financial analyst includes a Bachelor's degree in a relevant field such as Finance, Accounting, Economics, Business Administration, or Mathematics. Many financial analysts also pursue advanced degrees like a Master's in finance or an MBA to enhance their knowledge and competitiveness in the job market.

2. Is it hard to become a financial analyst? 

Answer: Becoming a financial analyst can be challenging, as it requires a strong understanding of financial concepts, analytical skills, and the ability to interpret complex data. The educational requirements and competition in the job market can add to the challenge. However, dedication, continuous learning, and practical experience make it attainable for those with a genuine interest in finance.

3. Do financial analysts need CFA? 

Answer: While it's not mandatory, obtaining the Chartered Financial Analyst (CFA) designation can significantly enhance a financial analyst's career prospects. The CFA designation is a globally recognized certification demonstrating expertise in investment analysis, portfolio management, and ethical standards. Many employers value and prefer candidates with a CFA designation, especially for asset management, investment banking, and portfolio analysis roles.

4. How do I start a financial analyst job?

Answer: To start a career as a financial analyst, follow these steps:

  •  Complete a Bachelor's degree in a relevant field.
  • Develop analytical skills and proficiency in Excel.
  • Gain relevant experience through internships or entry-level positions in finance or related fields.
  • Pursue certifications like CFA, if possible, to enhance your credentials.
  • Build a strong resume and cover letter showcasing your skills and education.
  • Network with professionals in the finance industry and explore job opportunities.

5. Can I become a financial analyst without an MBA? 

Answer: Yes, you can become a financial analyst without an MBA. While having an MBA can benefit career advancement and open doors to certain positions, it is not a strict requirement for entry-level financial analyst roles. A Bachelor's degree in a relevant field and relevant work experience can be sufficient to start a career as a financial analyst. However, pursuing an MBA later in your career may be advantageous for reaching higher-level positions and increasing your earning potential.