A financial analyst, equity analyst or investment analyst is a person who performs financial analysis to find the valuation of the companies for external or internal clients as a core part of the job. An analyst on the basis of valuation would provide a rating recommending an investment action, e.g. to buy, sell, or hold the security.
How they work:
The analysts obtain information by studying public records and filings by the company at SEBI, as well as by participating in public conference calls where they can ask direct questions to the management.
Financial/Equity analysts are often employed by equity research house, mutual and pension funds, hedge funds, securities firms, banks, insurance companies, and other businesses, helping these companies or their clients make investment decisions.
To become Equity Analyst/Financial Analyst sound knowledge of accounting, economics, financial modeling, Excel & Financial is required.
How to prepare:
To prepare for the job as equity analyst/financial analyst there are many institutes like Proschool offer Financial Modeling Certificate in tie up with NSE India for Examination Certificate.
a. Basic Subjects: Fundamental of Accountancy, Economics Analysis, Financial Management, Financial Market
b. Excel Proficiency
C. Financial Modeling
• Prepare an Income Statement, Balance sheet, Cash Flow Statement, Geographic Revenue Sheet, Segment Revenue Sheet, Cost Statement, Debt Sheet, Analyze Revenue Drivers
• Forecast Geographic Revenues, Segment Revenues, Geographic Revenues, Cost Statement, Debt, Income Statement, Balance Sheet, and Cash Flow Statement.
• Performa Adjustments, Income Statement – Compute Margins, Balance Sheet -Compute Ratios
• Cash Flow Statement Projection, Valuation- Discounted Cash Flow Method (DCF), Valuation – Relative Valuation
• Valuation – Assumptions for Valuation Model, Prepare Valuation Model, Prepare Presentation Sheet, Prepare Company Overview , Sector Overview
D. Report Writing
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