Financial Analyst Skills

Last Updated :

-

Blog Author :

WallStreetMojo Team

Edited by :

Ashish Kumar Srivastav

Reviewed by :

Dheeraj Vaidya, CFA, FRM

Table Of Contents

arrow

Skills of a Financial Analyst

The skills required for becoming a financial analyst comprise technical finance skills and non-technical behavioural skills. The technical skill includes economic modelling, equity research, merger and acquisitions, credit risk modelling, accounting software skills, IFRS knowledge, etc. Non-technical skills include behavioural skills like communication, leadership, interpersonal skills, problem-solving attitude, analytical thinking, etc.

financial analyst skills

It is a job role with a good mix of both soft and core skills. Having a knack for numbers and flow of finances along with a combination of problem-solving and leadership skills are most preferred on a financial analyst skills resume. It is also important to understand the fact that this role would allow businesses to scale.

Table of contents

Skills

Despite the fact that skills required would differ from firm to form and at different positions within the firm, below are the top 9 financial analyst skills set sought after by recruiters or companies.

  1. Accounting Skills
  2. Financial Modeling
  3. Accounting Software
  4. Project Financing Skills
  5. Corporate Finance
  6. Business Valuation
  7. MS Excel Skills
  8. Communication and Interpersonal Skills
  9. Problem-Solving Skills

Financial Analyst Video Explanation

 

List

Let us understand each of these 9 skills in detail. This will help us dwell deeper into the concept and understand the job role and the financial analyst skills resume in a detailed manner.

  1. Accounting Skills: It is a finance area role; therefore, accounting skills are necessary. A financial analyst should be well versed with the accounting principles and understand IFRS (International Financial Reporting Standards) and GAAP (Generally Accepted Accounting Principles). The skills relating to budgeting & forecasting, cost analysis, managing cash flow, reconciliation, etc. will help a financial analyst work effectively.
  2. Financial Modeling: The financial analyst should be good at financial modeling and should have a working knowledge of different types of financial models, like merger and acquisition financial model, three statement modeling, discounted cash flow, IPO modeling, etc. Financial modeling helps the financial analyst in advising management regarding various business decisions.
  3. Knowledge of Accounting Software: The financial analysts should have up-to-date knowledge of the organization’s latest accounting software. They can learn it through various sources online as well as defined courses. Every company wants a candidate with a ready knowledge of accounting software. But it is a bit difficult for candidates with little or no experience. Therefore, they can go for these courses to build their knowledge database for accounting software.
  4. Project Financing Skills: Financial analysts possessing project financing skills are an excellent asset. For this purpose, they need to know about project finance financial modeling, and they should have an analytical bend of thinking.
  5. Corporate Finance Knowledge: The financial analyst should know about corporate finance topics, including equity research, private equity, and fixed income. These skills are required, especially when a financial analyst works in investment banking or wants to become a fund or portfolio manager.
  6. Business Valuation: The financial analyst should be able to perform business valuation, i.e., calculating the fair value of the business at the time of sale of a business, partnership ownership, etc.
  7. MS Excel Skills: Apart from accounting software, MS Excel is the most sought-after skill in financial analyst candidates. Candidates can learn excel from online courses and a lot of free material available online.
  8. Communication and Interpersonal Skills: Apart from the above technical skills, effective communication and interpersonal skills are also critical. It helps a lot when communicating over email and the phone to resolve an issue. Interpersonal skill sets help communicate with stakeholders, clients, and investors; they also help pick up non-verbal cues.
  9. Problem-Solving Skills: Financial analysts need to be problem-solvers. Their very existence depends upon this ability, be it finding the solution to a complicated financial equation or decision regarding the company’s critical matter. The company depends greatly on its analysis and advice while making crucial business decisions.

These are some of the critical skill sets we discussed, but this is not exhaustive. There are many other technical and behavioral skills like analytical thinking, leadership skills, etc., which can be added to the list.