3-2 Project One Financial Analyst Job Aid
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Module Three Project One
Patricia Smith
Southern New Hampshire University
FIN 320: Principles of Finance
Financial Analyst Job Aid
Patrick Murphy
1
FIN 320 Project One Financial Analyst Job Aid
Our organization is currently looking to fill an open position for an entry-level financial analyst to join our fantastic team of financial superheroes. Our dynamic team makes a difference every day in how we impact businesses and our clients.
As an entry-level financial analyst there are daily responsibilities that must be addressed and are important due to the effect these decisions may have. Therefore, below we have provided a description of responsibilities that are required for this position and information pertaining to the impact our day-
to-day tasks and decisions can have on businesses and our clients.
This position is an excellent opportunity for a highly motivated individual that is starting a career in finance; and they will also work closely with experienced professionals to gain insight, experience, and decision-making skills.
Financial Responsibilities
The position of a Financial Analyst has many duties and responsibilities. Below is a step-by-step guide of what responsibilities this position entails but are not limited to:
Gathering data and information
Gathering data and information for what is being analyzed, for example accounting data
from a general ledger, historical financial reports, statistics, stock price information, etc. This information can be obtained from internal databases or third-party providers.
Organize Information
Once all the necessary information is gathered it must be entered into excel or in another database if required. After the information is entered it must be organized, cleaned up and formatted, whereas it will make sense and it is easy to understand. Which means the information can be sorted by categories or numbers, and formulas and functions utilized. Ensure that formatting styles are consistent.
Analyze Financial Results
Once all information is input and organized, it must be analyzed. This is done by reviewing past information and historical results. The information included in this will be
ratios, gross margin, net margin, growth rates, fixed vs. variable costs, return on equity, return on assets, debt/equity ratio, earnings per share, etc. By looking at this information you will be able to see if there is a trend and benchmark performance against other companies in the same industry.
Making Forecasts and Projections
Historical information has been obtained and analyzed at this point. Based on this information projections and forecasts can be made pertaining to how the company will perform in the future. There are forecasting methods that can be used which include regression analysis, year over year growth rates, and bottom-up and top-down approaches.
2
Developing Recommendations
Once all the above steps have been completed insights and recommendations can be provided on how to improve the operations of a business. Examples of recommendations can be ways to cut costs, operational efficiencies, ways to grow revenue, etc.
Making presentations of the obtained information
The information that has been input into excel or the database must be converted to charts and graphs to provide a presentation of the data.
Generate Reports
An important part of this position is the generation of reports. These internal reports provide key insight pertaining to performance or the tracking of actual or budgeted results. These reports are important to the company or to our clients and must be clear,
easy to understand, accurate, insightful, and on time (Vipond, 2023).
Financial Management Decisions
By completing the above responsibilities and presenting this information to the company and clients it provides them with insight into the financial health of their company. In addition, it assists them in making informed decisions pertaining to investments, cost control, pricing decisions, budgeting decisions, and merger or acquisition decisions (Imarticus, 2023). For example, by financial analysts providing this information a company can decide whether they need to increase the price of a specific product they are selling or even maybe eliminate the product altogether.
Furthermore, we always want to ensure that the company and our clients receive this information. However, if they fail to receive this information or it is inaccurate this could lead to financial mismanagement. In other words, it means that if they do not have this information this could lead to poor financial decision making that could cause loss of profit, bad operational decisions, penalties, fines, reputational damage, and even bankruptcy (Russo, 2022). For example, management does not have the financial analysts’ reports, therefore they assume their inventory is low and place a large order for a product, when in fact they have more than needed. This would cause an extreme financial burden on the company, especially if the product is not selling at an appropriate price or not selling at all.
Accounting Principles
As financial analysts we use accounting principles to analyze a business’s financial health. We want to ensure that our company and clients are well informed of their financial health for them to make informed decisions.
Generally Accepted Accounting Principles (GAAP) are procedures, standards, accounting guidelines and principles that companies must follow to prepare their financial statements. Therefore, these accounting principle standards implemented by GAAP are used by financial analysts to review the financial statements of a company in order to determine their financial health. These financial statements include the company’s accounting information that is included in their income statement, balance sheet and cash flow statement (Crail, 2022). By having this information, a company can make informed decisions on how to invest, if pricing needs to change, budgeting, etc. 3
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