A financial analyst is a person with a passion for mathematics and numbers. His or her job is particularly suited to the field of finance. They help and support investors in listed companies to make more profitable transactions using economic, financial and social indicators.
Factors that drive a company’s shares
A company that chooses to be listed on the stock exchange issues shares. The entire economy has a strong influence on share prices. They rise if the company makes significant sales or develops major innovations. On the other hand, if the company suffers a recession, there will be a drop in economic activity. Statements in the media, rumours, fads or trends have a significant impact on the stock price. Macroeconomics also has a great influence on a company’s stock price. As the economy grows, so do most stock prices. In order to avoid a drop in price, it is important to use the services of a financial analyst to help you develop appropriate strategies.
The tasks of a financial analyst
The function of a financial analyst is organised around the collection of information, the production of recommendations and the analysis of results. Firstly, he or she gathers financial statements and annual reports to use as a basis for analysis. Afterwards, he studies the economic press gathering, from different angles, the information likely to be of interest, such as profitability, restructuring, human resources or others, in order to evaluate a company. With all the sources in hand, he interprets the figures. Then he defines the value of the company, taking into account the main economic trends. After these analyses, he will present the company’s development prospects and its value in the form of notes.
Qualities and skills of a financial analyst
Usually, the financial analyst is a graduate of a business school, a specialised political studies institution or an engineering school, with a specialisation in finance. To practise this profession, he or she must follow training courses, provided by the French analysts’ society, for nine to eighteen months. Afterwards, they will be awarded two internationally recognised diplomas. To succeed in this profession, the financial analyst must have a better knowledge of numbers and mathematics. This will enable them to produce forecasting models, profitability calculations and numerical analyses. In this position, writing skills are an asset, in order to produce good summaries and notes. They must be able to decipher and interpret the state of supply and demand. In this way, he/she will understand the rules governing the stock market and how it works, for the benefit of his/her employer.