Financial Analyst Salary And Info

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Financial analysis is enthralling. If you become good at your job, you can work as a consultant for businesses in your local area or remotely around the world. One month you could be analyzing financial statements for your local church while the next month you could be reviewing the books for the largest German automotive parts manufacturer. Even though this would be an entry-level finance position, the average financial analyst salary shows the importance of this role.

Many students enrolled in a business college are interested in becoming financial analysts. Whether you are still in school, have just graduated, or are looking for a career change, the average financial analyst salary is enough to entice many to try to break into the field. Learn what a financial analyst is, how to become one, what sort of skills you need, and more.

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WHAT IS A FINANCIAL ANALYST?

A financial analyst is an integral part of a business. Their job is to review a company's books and assess the financial health of a business. They may be employed by a company or be self-employed. However, they should not to be confused with a financial advisor who is typically a salesperson selling financial products such as life insurance policies.]

FINANCIAL ANALYST INDUSTRIES


There are many industries that need financial analysts. These include:

  • Financial services 
  • Engineering services 
  • Energy and utilities 
  • Electronics, components, and semiconductors
  • Education 
  • Consumer packaged goods 
  • Construction 
  • Computer software and hardware 
  • Accounting and auditing services 
  • Aerospace and defense 
  • Biotechnology and pharmaceuticals 
  • Banking 

To be successful in any industry, it is best to have an understanding of the industry and their operations management. You can look at any set of books and analyze where the company is failing or succeeding, but to make meaningful contributions, you will need to have an idea of what can be improved in order to make recommendations.

JOB DESCRIPTION


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Financial analysts working as consultants often work with new businesses to establish a clear vision of what industry benchmarks should be set. They skim reports such as the P&L (profit and loss) budget, P&L to the last fiscal year's quarter, year to date P&L, BS (balance sheet) to last quarter, and projected statements of cash flow to actual. They look for glaring inconsistencies and then work closely with the GL (general ledger) accountant to take a deep dive in to find the source of the inconsistencies.

If a company outsources its accounting, accountants, either accidentally or intentionally, will mis-code assets as expenses or revenue as assets. It is the job of the financial analyst to report these inconsistencies to the management. They must analyze the data and look at the journal entries along with their backup to ensure the company has followed proper accounting procedures to record the data. Depending on how small the organization is, they may also be responsible for cash reconciliations and adjusting journal entries.

You can also expect to perform variance analysis monthly on budget vs. actual, balance sheet performance, and the income statement. If you are part of a large organization with an accounting department that is stretched too thin, you may be reconciling cash accounts daily. You will be on-call to prepare financial reports, tables, charts and other exhibits outside your monthly, quarterly, and annual duties.

"I believe that through knowledge and discipline, financial peace is possible for all of us."   -  Dave Ramsey

You may have to train new employees to ensure the best practices are followed. To help with this, write SOPs (standard operating procedures) clearly, delineating with pictures and words for each step of the process. This is especially true for large companies who go through a large amount of temps only lasting a couple weeks. If your company does not have one in place, you may want to create an ICQ (internal control questionnaire) to be shared with the finance and accounting departments so they know the best practice and what is inappropriate.

If you work for a non-profit organization, brainstorm ways to turn cost centers into profit centers. If the diocese or archdiocese of your state or tri-state area has a department for doing the books for poorer churches or missions, suggest charging each a nominal fee. One accountant doing the books for 30 churches at $500 per month only costs each church $6,000 per year. However, they will bring in $180,000 for the department. Everybody wins.

You can also expect to perform cost-sharing analysis among companies and recommend a split other than an even one if it would significantly harm one party materially. For example, if a daughter company loses money year-over-year, suggest a reimbursement based on taxable income rather than a 50-50 or 34-33-33 split.

WHAT SORTS OF SKILLS DO YOU NEED TO BECOMEA A FINANCIAL ANALYST?

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Required hard skills will vary based on the employer, but to become a successful financial analyst, you need a working knowledge of a number of skills. Some of which include:

  • Budget management 
  • Microsoft Excel/Google Docs/Numbers 
  • Communication skills 
  • Financial reporting 
  • Financial modeling 
  • Financial planning 
  • Reconciling CPA 
  • Financial statements 

Depending on the type of company you work for, you may be required to have a solid understanding of GAAP (generally accepted accounting principles) or IFRS (International Financial Reporting Standards). As you try to break into the industry, sell your interpersonal and communication skills. You may have to explain hard-hitting truths like costs are too high, sales are too low, or other undesirable truths. Be a problem-solver and bring solutions to the table.

EDUCATIONAL REQUIREMENTS


A relevant undergraduate degree is required to become a financial analyst. Relavent Bachelor's degrees include finance, statistics, management, economics, business administration, or accounting. To rise in your career, consider a Master's degree in a similar field. Sought-after professional certifications include Certified Public Accountant (CPA), Certified General Accountant (CGA), and Certified Managerial or Management Accountant (CMA). Finance-related designations include a Chartered Financial Analyst (CFA) or a Chartered Investment Manager (CIM) designation.

FINANCIAL ANALYST SALARY AND INFO

Experience is a fairly large factor affecting the average financial analyst salary. When you start your career, expect an average salary of around $57,000 per year. Within five years, you can expect your total annual compensation, before benefits, to be around $67,000. This is an increase of nearly 18% in only five years. With 10 to 20 years of experience under your belt, you can expect your salary to increase again to about $70,000 per year. Once you have over 20 years of experience, you can expect an average salary of around $73,000.

CAREER PATH 


While the average financial analyst salary is high, this is just the bottom of the rung. From this position, people usually climb to the rank of corporate financial analyst, financial manager, senior financial analyst, financial controller, or senior accountant. People often continue on to Chief Financial Officer, finance director, accounting manager, corporate controller, vice president of finance, senior finance manager, or CPA.

The national median financial analyst salary is about $59,995, and this is indicative of the fact that people move on from their positions to roles with more responsibilities. San Francisco pays 20% above the national average, New York pays 14% above the national average, and Seattle pays 10% above the national average. On the other hand, Orlando pays 11% below the national average. Take a look at how you can expect your salary to increase as you rise through the ranks of your finance career.

CAREER SALARIES( BASED ANNUALLY)


  • CPA - $80,365
  • Corporate financial analyst - $72,308
  • Senior financial analyst - $74,421
  • Senior accountant - $78,917
  • Accounting manager - $98,572
  • Finance director - $108,460
  • Financial manager - $125,080
  • CFO - $128,503
  • VP, Finance - $133,699
  • Senior finance manager - $142,390
  • Corporate controller - $130,226

Notes

Comptrollers will almost always make less than controllers with the same amount of experience because this is a government position. A good employer will pay for you to sit for your CPA exam, reimburse you for your study materials, and give you a $2,000 bonus for obtaining your CPA. Some states have different requirements, such as having to pass all four tests plus an ethics test, but on a national level, the biggest downside is the amount of accounting educational credits you will need along with the required experience under a CPA.

However, if you find you like accounting, this can set you up for an FCO (financial control officer) position in the future. You may find it slightly difficult to land a senior accountant position as most employers expect five to 10 years of relevant experience.

CONCLUSION

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Becoming a financial analysis is exciting as is the average financial analyst salary. If you loved asking questions as a kid and fell in love with your business college while you were attending university, a career in financial analysis may be for you. Expect to analyze everything you can get your hands on: journal entries, revenue accounts, expense accounts, the balance sheet, commission incentive programs, and more. Your financial analyst salary will help you feel valued at your place of employment and can easily rise with you as you gain experience.

Once you feel you are ready for bigger and better things, the world is your oyster. Depending on your experience, you can transition to accounting and work your way up to FCO or you can stay in finance and achieve the coveted CFO position. Your opportunities are limitless. To be successful, highlight your communication, tech, and problem-solving skills and take every opportunity you have to learn. Your future is bright.

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