3-2 Project one finaicial analyst job aid (docx) - CliffsNotes (2024)

Pendarvis 1 Amanda Pendarvis 3/26/2024 There are many responsibilities when a financial analyst . A financial analysis is a profes- sional who analyzes financial data and trends to provide insight and recommendations for busi- ness individuals or investors. "Most financial analyst positions require you to have at least a bachelor's degree. Companies tend to prefer candidates who major in a topic related to econom- ics, finance, or accounting. The coursework offers a broad understanding of business, account- ing, and investments to prepare you for your future career."( Indeed Editorial Team) One is creating a financial model and forecasting to support decision making pro- cessing including budgeting investment analysts and strategic planning. Another one is conducting financial analysis by collecting and interpreting as well as summarizing financial data to provide insight into the company's performance as well as potential areas of improvement. Something just as important is to prepare reports and presentations for stakehold- ers such as executive investors and board members. This helps communicate the financial performance forecast and recommendations. Trading with other departments such as accounting marketing operations helps gather relevant data and ensure alignment of financial goals with overall business objectives.

Pendarvis 2 Making sure things are up to date on a regular basis helps regulate changes ac- counting standards as well as which best financially to ensure compliance and possible financial risk. By conducting a financial analyst, you were able to interpret and summarize financial data and provide insight into the company's performance. A financial analyst plays a huge role in informing management decisions throughout their responsibilities. For example, let's consider a Bakery company contemplating whether to invest in a new machinery to increase production capacity when making their decision they would be conducting a financial analysis that can assess the potential return investment if they were to pur- chase the new machinery. By doing this they would create financial models to forecast the cost of acquiring as well as maintaining the equipment. They would also expect an increase in rev- enue due to the enhanced to the production. Another thing an analyst would do is evaluate the market transit competitors as well as strategies to gauge demand for the company's product. This information would help the management decide whether it would be a worthwhile investment or not. Without having a financial analyst management would have no type of insight into mak- ing the right decision whether to buy the new machinery or not. Even if they decide to buy the new machinery as an investment, they're not fully understanding its financial implication and they could possibly overextend the company's resources or lose out on a more profitable oppor- tunity. This could delay the investment and they could potentially lose market share, as well as improving operational efficiency. Having a lack of financial analysts this could lead to poor deci- sion making or hinder the company's growth and effectiveness in the company.

Pendarvis 3 Accounting principles play a huge role with business financial health by scrutinizing its financial statements. This fundamental helps direct the correct preparation of accurate and reli- able financial information. This helps ensure consistency and comparability across different enti- ties. All analysts rely on accounting information such as cash flow. income statements, statement to assets, profitability, overall performance, and balance sheet. For example, if you were to ana- lyze liquidity ratios like the current ratio gives the company's ability to meet short term obliga- tions. If they do not have access to accurate account information the analyst will struggle with making informed decisions that can lead to flawed investment strategies as well as financial losses for investors. For example, if they were to have an accurate revenue recognition that could possibly inflate profitability margin metrics which will give the false impression of a company's financial strength. Financial statements play a crucial role and making business finance-related decisions. Analysts need access to accurate and comprehensive financial data to help perform their duties effectively. Analysts need the correct financial data including balance sheets and income state- ments and cash flow statements. When examining a company's income statement analysts can as- sess its profitability over a specific period of time which then can identify trends in areas for im- provement. When having access to cash flow statements analysts can evaluate a company's liq- uidity as well as its ability to generate cash to cover investments as well as operational expenses. With this type of information that's helped businesses make the right decisions relating to bud- geting, financial options strategic planning and future investment opportunities. For example, a company may use financial statements to decide whether to invest in new equipment, explore new markets or gain financing for growth incentives. Overall financial statements provide valu- able insights that help keep the business informed.

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