Explaining the financial analyst job is complex because their responsibilities vary widely depending on their employer’s size and industry. Recognizing that individuals with the same job title can have significantly different duties and skillsets is essential.

To clarify the financial analyst role, I’ll provide essential insights that foster a thorough understanding. Drawing from my experience in investment firms and traditional businesses, I’m eager to share my expertise with you.

Table of Contents

  • Types of Financial Analyst Roles
  • Enhancing Business Value Through Financial Analysis
  • Essential Skills of a Financial Analyst
  • Key Challenges Faced in Financial Analyst Jobs
  • Pros and Cons of a Financial Analyst Career
  • Do You Want to Become a Financial Analyst?

Types of Financial Analyst Roles

Jobs in finance encompass a diverse array of roles and responsibilities critical to the success of businesses. Financial analysts, in particular, play a vital role in interpreting and analyzing financial data to help decision-making within organizations. These professionals are sought after in various industries, including investment firms, traditional businesses, and small enterprises. More specifically, their expertise is invaluable in evaluating the financial health of companies, assessing investment opportunities, and optimizing resource allocation strategies. Let’s delve into the specific types of financial analyst roles.

Investment Firm Financial Analysts

In brief, investment firm financial analysts evaluate companies for their investment potential—often analyzing public financial statements to pinpoint promising investment options.

The financial analyst job in such firms involves preliminary investment analysis such as:

  • Industry and company research
  • Profitability analysis (ratios, financial statement adjustments)
  • Liquidity analysis (ratios, financial statement adjustments)
  • Trend analysis (ratios, KPIs)
  • Preliminary valuation (multiples and DCF)
  • Drafting presentations showcasing investment opportunities

In advanced stages—upon identifying a viable target—financial analyst duties involve:

  • Conducting due diligence
  • Adjusting EBITDA for one-off and nonrecurring items
  • Projecting financials using the target’s business plan
  • Engaging with target management
  • Building financial models
  • Developing detailed valuation frameworks, including DCF and multiples
  • Performing sensitivity analysis to support management decisions

Generally, various investment firms may employ a senior financial analyst to bolster their investment operations, such as:

  • Asset managers
  • Private equity firms
  • Hedge funds
  • Venture capital firms
  • Insurance company investment divisions
  • Real estate investment trusts (REITs)
  • Mutual funds
  • Pension funds

The financial analyst job at investment firms primarily focuses on identifying and acquiring high-ROI assets—offering an external perspective and typically not engaging in the operational activities of their investments.

Traditional Company Financial Analysts

By large, we refer to traditional businesses as non-investment firms because they primarily focus on selling goods or services to customers and engaging in profitable economic activities rather than acquiring other companies.

How does the financial analyst job contribute to these companies?

Countless traditional businesses—including restaurant chains, supermarkets, agricultural producers, healthcare providers, and online e-commerce platforms—are evolving to meet modern demands while preserving their fundamental business models.

If a business is not profitable, its sustainability is compromised, and failure becomes inevitable. To avoid this, top management must prioritize the profitability of core operations and stay abreast of new trends. Ultimately, this underscores the importance of financial analyst roles in traditional businesses because they assist management in identifying profitable operations and understanding the effects of various activities on the overall financial outcome.

Small Business Financial Analysts

Typically, small businesses (50–200 employees) can employ a few, sometimes just one, financial analyst. The financial analyst’s duties typically include:

  • Revenue and growth rate analysis
  • Product line sales analysis
  • Client-based sales analysis
  • Profitability and growth trends
  • Product line profitability analysis
  • Client profitability analysis
  • Financial effects of various business segments
  • Balance sheet item trends
  • Budget forecasts

Therefore, despite the lower prestige compared to prominent corporations, a financial analyst career at a small business can offer considerable enrichment and skill diversification—fostering a comprehensive mindset.

Large Business Financial Analysts

In large firms, financial analyst jobs differ in that they report and analyze specific P&L and Balance Sheet items.

Being a financial analyst at Coca-Cola UK, I specialized in the Monster brand—one of over 30 beverage brands in our portfolio. My role involved tracking its performance and profitability up to the EBITDA level.

As a matter of fact, I barely touched Monster’s Balance Sheet or analyzed other brands’ performance in that period. Financial analyst positions at a large company involve specializing in and deeply engaging with a singular activity.

Enhancing Business Value through Financial Analysis

For businesses, the financial analyst job is crucial for:

  • Interpreting revenue growth across clients, products, periods, and volumes
  • Assessing marketing effectiveness
  • Evaluating profitability across clients, products, and periods
  • Measuring ROI of investment programs
  • Tracking key performance indicators
  • Optimizing financial resource allocation

In a nutshell, these activities assist top management in decision-making and guide middle and lower-level managers to enhance their performance.

Essential Skills of a Financial Analyst

We’re progressing towards understanding the financial analyst role, but it’s equally important to know the crucial skills required for success in this position.

Starting from an entry-level financial analyst at an investment firm, you must able to:

  • Perform industry analysis
  • Demonstrate excellent Excel skills
  • Have a solid understanding of financial accounting
  • Build financial and valuation models (DCF, Trading/Transaction Multiples, LBO)
  • Craft compelling presentations with effective communication skills
  • Understand financial markets and valuations
  • Utilize financial information platforms like Bloomberg, Thomson Reuters, and FactSet

Likewise, financial analyst jobs at a traditional firm focus on:

  • Analyzing revenue, costs, profitability, and performance metrics
  • Mastering Excel and ERP systems.
  • Grasping financial and managerial accounting principles
  • Forecasting financials and managing budgets, including capital expenditures
  • Conducting varied analyses, including price-volume-mix and ratio assessments
  • Evaluating cash flows

Suppose you’re considering a financial analyst career. In that case, you’ll be excited to learn that the 365 Financial Analyst program provides all the necessary tools to kickstart your learning journey in just six months. In short, our comprehensive offering includes engaging online courses, practical resources, projects, and career counselling—everything you need to become a financial analyst in one place.

Key Challenges Faced in Financial Analyst Jobs

Thriving in your financial analyst job requires adapting to a fast-paced and demanding environment. With this in mind, success hinges on managing stress and overcoming daily challenges, including:

  • Navigating tight deadlines and intense pressure
  • Analyzing different financial data from various sources
  • Addressing ERP system limitations affecting data access
  • Handling oversized Excel files
  • Responding to regular auditing inquiries
  • Balancing stakeholder expectations
  • Aligning BI Dashboards data with financial records

Pros and Cons of a Financial Analyst Career

With years of experience in the financial analyst position, I firmly believe the advantages significantly surpass any drawbacks. Undoubtedly, this career path is well-defined, providing a rapid learning curve and promising prospects for those who are driven. The diverse range of tasks ensures a dynamic and engaging work environment, leaving little room for monotony.

But the high-pressure environment—punctuated by tight reporting deadlines—may not suit everyone. Initially, the fear of errors and disappointing peers was a major source of stress for me.

And so, here’s a candid overview of the pros and cons of the financial analyst role:


  • Promising financial analyst career path
  • Competitive salary
  • Strong market demand for financial analysis expertise
  • Rapid skill development
  • Opportunity to develop superior analytical skills
  • Insider view of business operations
  • Gain lasting technical knowledge
  • Impact your organization positively
  • Flexibility to work across multiple industries


  • Stressful work environment occasionally
  • Busy periods—particularly at the start of the month in traditional firms
  • Continuous on-the-job learning may push you beyond your comfort zone
  • Competitive work atmosphere
  • Career pressure

Do You Want to Become a Financial Analyst?

Hopefully, my explanation of a financial analyst’s duties has given you a clear understanding of the role’s requirements. Summing up, I’d be delighted if you also chose to embark on this path.

I also suggest enrolling in the 365 Financial Analyst program—an online bootcamp crafted by experienced professionals to assist aspiring financial analysts. Sign up for FREE today.