How do I pursue a career as a financial analyst?

The basics of understanding financial statements pdf

Iu2019ve never thought that I would become a financial analyst before, for my major is computer science and technology, which doesnu2019t seem to have any relation with it.

Until when I gradually got interested in stocks and economic area, and developed huge admiration for analysts, who are so knowledgeable with great efficiency.

,Then I decided to become an analyst.

I took the CFA course training, then 3 levels, and started with internship after that.

Itu2019s a tough process, but I made it finally, thank god.

In conclusion, enough hard work is a must, of course, but what I want to share is some methods, which I think is of great help.

,Get the hard skills steadily.

For example, you will need to understand the basics of accounting, how to create and analyze financial statements, basic economics to help interpret numbers, high level of statistics to create and manage predictive models, and you need to make a decision if you want to pursue corporate finance or investment finance.

And some skills like these.

,Presentation SkillsA financial analyst need to translate their technical findings to non technical people by oral or in reports.

No matter how deep is your knowledge in technical aspects, you have to comprehend it in a basic point of view, which is understandable.

,Be good at using tools.

Analysis is a complicated and boring job sometimes, so you need to know the ways to simplify it.

Thereu2019re a lot of tools that can help you with it, and one of my favorites is Parsing, which can parse the tables and charts from PDF files as well as convert them into Excel.

Efficiency improved a lot with it! And it works like this:,Anyway, I think itu2019s not easy to work in financial area, and itu2019s determined by your mind.

Hope you can realize your dreams.

Good luck!

Understanding financial statements course

Depends for what Objective,,If it is to do well as a Business man or in a Financial Analyst type of job then an MBA in Finance will propel towards the required level of expertise.

,If it is to become a robust critique/ analyst/ accounting superman then a Certified Accountants course CA in India CPA in US.

,If it is to be an ace investor or fund manager then an MBA/CA level proficiency can be built with expertise which comes from a curios mindset to know how money flows in a given value chain.

,If it is to be employed an Accounting or MIS role in any organization a basic accounting graduation backed with on the job experience will also make one competent.

Only point is in this case a learning mindset will be required and I would caution that given the competition levels the reward norms will often cause a lot of disappointment despite attaining sound practical knowledge built painstakingly over time

Financial statement analysis

The better way of analyzing a financial statement is totally depend upon your purpose.

Stil in a generalize way there are some important points need to consider in analysis :-,First understand the domain of the industry.

One need to gather basic understanding of industrail scenario of the entity because every industry has their own set of ideal practices.

For eg.

A Banking company has totally different perespective with regards to the liquidity and capital adiquacy as compared to the company belongs to real estae domain.

Understand the business of a particular industry is the first step to conduct fundamental analysis of financial statement.

,Obtain comparative details and arrange it on a spreadsheet in a summarize way.

,Calculate the following ratios :,Profit ratios(Operating profit, Cash Profit, Net Profit etc),Liquidity Ratios( Current Ratio, Quick Ratio etc),Capital Adiquacy and debt ratios(Debt equity, capital gearing, DSCR, Leverage analysis),Growth ratios(growth in sales, individual cost, profit, finance cost, net worth, debt, other current assets and liabilities, working capital etc),If you want to analyze business in depth then some Advance ratios (Yield analysis, Inventory & debtor turnover ratios, Sensitivity analysis with regards to external factors etc),Prepare valuation model through different methods of valuation (Book Value, Market Value, Earning model value etc),4.

Here the real work begins.

Now the quality of analysis is depends upon your knowlede and experience.

Understand the operating and financial performance of the entity.

Draw a detail comparative analysis over a specific period of time.

Prepare a rough future forecast considering comparative details and all the relevant external factots.

Asses the future earning potential through such projections.

,Scope of analysis are vast though depend upon the purpose.

I am sharing with you some extracts of my first analysis during my articleship days :-),Though these are very basic analysis but still you get a rough idea about it.

Messege me if need any detail info related to same.

,Hope this would help.

:-)

Financial statements examples

A financial statement is a statement that is mainly prepared to show the financial PERFORMANCE of an entity for a certain period of time, or to show the financial POSITION of an entity at a particular date.

They are 4 main financial statements.

,The Statement of Profit or Loss and other Comprehensive Income.

This shows the performance of an entity regarding whether it has made a profit or a loss, and how much.

,The Statement of Financial POSITION.

This shows the financial position of an entity at a particular date, usually the financial reporting date.

It shows the balances of the entitys assets, liabilities and equity.

,The Statement of Changes in Equity.

This shows the movements that have occurred, which affect the overall equity balances at the financial reporting date.

It shows items such as issue of new shares, revaluation of assets, issuance of dividends etc.

,The Statement of Cash Flows.

This shows the movement of the businessu2019 cash and cash equivalents during a financial period.

what are the 5 types of financial statements?

A financial statement is a statement that is mainly prepared to show the financial PERFORMANCE of an entity for a certain period of time, or to show the financial POSITION of an entity at a particular date.

They are 4 main financial statements.

,The Statement of Profit or Loss and other Comprehensive Income.

This shows the performance of an entity regarding whether it has made a profit or a loss, and how much.

,The Statement of Financial POSITION.

This shows the financial position of an entity at a particular date, usually the financial reporting date.

It shows the balances of the entitys assets, liabilities and equity.

,The Statement of Changes in Equity.

This shows the movements that have occurred, which affect the overall equity balances at the financial reporting date.

It shows items such as issue of new shares, revaluation of assets, issuance of dividends etc.

,The Statement of Cash Flows.

This shows the movement of the businessu2019 cash and cash equivalents during a financial period.