Overview of a Financial Analyst’s Job

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OverviewL E C T U R E T W O

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Key Skills

Job MarketKey

Terms Salaries

Job Descripti

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Actual Job DescriptionL E C T U R E T W O

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• From a major online job search engine, posted by a Fortune 500 Company.

• Summary

• This position on the Financial Analysis & Planning team will develop accurate and timely financial views for business owners (including senior management) for the purpose of understanding financial performance and managing the business. This includes: reporting and analysis of actuals, forecasts, and budgets; understanding revenue, gross margin, operating margin, and cash flow results for the business; tracking business results against key metrics; and communicating results to management.  The Analyst will also develop and manage annual budgets and will perform special projects.

• Essential Duties

• Develop annual budget

• Prepare monthly variance analysis for senior management

• Prepare monthly operating expense accruals

• Assist with monthly forecasts and budget revisions

• Review monthly operating expense results with business owners

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What Industries can I work in?

Industries

The concepts and general processes are the same for

any corporation. Once you are comfortable with the

concepts they can be applied to any industry.

Processes

Since every industry EARNS REVENUE differently and

has different costs of doing business then the way you

forecast or predict revenue and expenses varies

slightly.

Revenue

The course will focus on corporate financial analysis. If

you are working as an analyst in financial services your

focus in not on financial planning/analysis but rather

INVESTMENT analysis.

Financial Services

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Key TermsL E C T U R E T W O

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Use of past data and market analysis to predict future financial results. These are done on a quarterly basis.

Forecast

A financial plan of how a business will perform financially for the year. This is an exercise done once a year (usually completed by Sept./Oct) for the following year

Annual Business Plan/Budget

The proportion of revenue a company makes after it pays variable costs (materials, wages, etc.). This excludes one time items such as loan payments, interest, etc.

Operating Margin

The revenue a company makes minus cost of goods sold. This is essentially their profit. Example: It cost $1,000 to make the app, and we sold $3,000 worth of apps. Gross Margin is $2,000.

Gross Margin

Direct costs of materials/labor that it costs to produce a product. Example: If it takes 20 hours of labor at $50 an hour to produce a new IPhone app, then their cost of goods sold is $1.000.

Cost of Goods SoldPercentage of profit a company makes on products. Revenue-Costs of Goods Sold/Revenue. Using our previous example our Gross margin would be $3000-$1000/$3000= 66%

Gross Margin %

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Overview of Job DutiesL E C T U R E T W O

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The first and most important step in the

financial planning process.

Comparing actual results to planned

results.

Forecast is an update to the annual plan.

Ongoing tracking of revenue, expenses and other metrics.

Annual Plan/Budget

Variance Analysis

Quarterly Forecast

Ad Hoc Reporting

OngoingEnd of Oct, Quarter Ends

Dec. 31st

End of July, Quarter Ends

Sept. 30th

End of April, Quarter ends

June 30th

End of Jan., Quarter ends March 31st

Starts in July/August,

Done By October

Annual Plan/Budget

Process

Quarter 1

Forecast

Quarter 2

Forecast

Quarter 3

Forecast

Quarter 4

Forecast

Monthly

Analysis

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Key SkillsL E C T U R E T W O

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Financial Analyst

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Excel

See the Big Picture

Data Analysis

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Problem Solving

Communication

Math

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JOB MARKET OVERVIEW

While these are US statistics, this career is in demand globally as many companies employ local financial analysts to work on financials for overseas divisions. In the past 2 companies I’ve worked at I had counterparts in the Philippines, Costa Rica, Argentina

and Ireland.

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CAREER PROGRESSION

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SALARIES

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SALARY PROGRESSION