Financial Analysts’ Skills and Examples

Financial analysts are super analysts.  If you have yourself (or anyone else) convinced that people can only be good at one thing, study up on these guys and get back to me.  Let’s stop making excuses for ourselves!

Looking for examples of what financial analysts do?  Take a look, then go back to the web analytics page.

  • Accounting – the ability to read balance sheets, income statements, and cash flow statements, and actually understand what they mean.  Oh yeah, and all of the good stuff is in the notes – pensions, stock options, leases, companies bought with stock – none of which appears in the first three statements.  No surprise CFOs are in jail!
  • Marketing – understanding the audience for a business.  Is the market large and unfocused, or niche?  Is it growing or shrinking?  Are people willing to pay more for increasing quality (Lexus), or would they rather pay less to gain quantity (Toyota)?
  • Product Development – what is the company making?  What are they going to make?  How much will it cost to produce?  How much can they realistically charge?  Will it work, break, or fail to do what it’s supposed to do?
  • Competition – is this business on the leading edge, benefiting from its progressiveness?  Or is it a follower, realizing cost savings by scavenging others’ R&D?  Is it gaining or losing ground?
  • Capital valuation – what does the company get from its investments in people, buildings, machines, etc.?  How much of each of the company’s needed resources will be available in the future?  How will efficiency decrease as the business grows?
  • Macroeconomic stimuli – how will changes in the greater economy impact this business?
  • Political stimuli – how could public policy impact this business?
  • Weather – think FedEx, Delta, and Beazer.  If Al Gore is right about the climate, these companies are going to be open for fewer business days.
  • And on and on and on!

All done?  So what do you think now?  Is learning display, SEO, paid search, usability, information architecture, business fundamentals and more sounding like too much for you?  Time to dig in and get serious about your job – this is what it takes to be an effective analyst!

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