Financial Analyst
Help companies figure out where to put their money
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Jobs this leads to
- Junior Financial Analyst
- Equity Research Analyst
- Corporate FP&A Analyst
- Investment Analyst
Before you start
- ✓ Basic math & accounting knowledge
- ✓ Strong Excel skills (or willing to learn)
7 missions to Financial Analyst
3 worlds, 7 missions. Tap any circle to open it; the glowing one is next.
Learn how financial statements work.
Learn to build models companies actually use.
Pick a specialty and get certified.
More about this career
About the job, pay where you live, questions people ask, and where this career can take you next.
About the job
What you’d do
- Research investments and recommend which to make
- Evaluate current and past financial data
- Study economic and business trends
- Examine a company's financial statements to judge its value and growth prospects
- Use financial models to solve financial problems and assess the impact of deals
- Prepare written reports and presentations
Where you’d work
- Investment and securities firms (about 24% of US financial and investment analysts)
- Professional, scientific and technical services (about 14% in the US)
- Banks and other lenders (about 12% in the US)
- Company head offices (about 11% in the US)
- Insurance companies (about 6% in the US)
Directions you can take
- Financial and investment analysis (rating and recommending investments)
- Financial risk (measuring exposure to credit and market risk)
Every step in full
The complete text of every step, to read or print. Work through them in the journey above.
Accounting Fundamentals 2 steps
Three Statement Accounting
Master the holy trinity of financial statements and understand the mechanics of how they link together.
Real-world task: Download Apple's latest 10-K from the SEC EDGAR database. Trace Net Income manually to the Retained Earnings on the Balance Sheet and to the top line of the Cash Flow Statement.
Why it matters: All financial modeling relies on historical accounting data. If you don't grasp how statements interlink naturally, your models will never balance.
Checklist
- Deconstruct the Income Statement (Revenue down to Net Income).
- Analyze the Balance Sheet and its governing equation (Assets = Liabilities + Equity).
- Break down the Cash Flow Statement into Operating, Investing, and Financing activities.
- Map out exactly how Net Income flows into retained earnings and the cash flow statement.
- Understand the impact of depreciation on both the income and cash flow statements.
Accounting Principles & Revenue Recognition
Learn the foundational rules that dictate when and how money is officially counted.
Real-world task: Review a real SaaS company's earnings report. Identify their deferred revenue balance and write one paragraph explaining why their recognized revenue differs from cash collected.
Why it matters: Companies can manipulate their reported earnings through accounting practices. Knowing what is a non-cash adjustment versus an actual operational cash drain prevents bad analyses.
Checklist
- Differentiate between GAAP (US) and IFRS (International).
- Understand the matching principle and the difference between accrual accounting and cash accounting.
- Analyze working capital and how changes in it affect operating cash flow.
- Identify the criteria for proper depreciation and amortization schedules.
- Learn how to spot aggressive revenue recognition or non-cash adjustments.
Financial Modeling in Excel 3 steps
Advanced Excel for Finance
Turn Excel from a spreadsheet tool into a high-speed analytical engine by mastering keyboard-only workflows and dynamic functions.
Real-world task: Take 5 years of messy historical financial data and re-format it entirely without using the mouse, building a clean, standardized summary dashboard.
Why it matters: Speed and accuracy in Excel are the absolute baseline expectations in corporate finance and banking. Navigating strictly with the keyboard makes you 3x faster.
Checklist
- Master essential keyboard shortcuts to entirely eliminate mouse usage.
- Implement advanced lookups: INDEX/MATCH, XLOOKUP, and OFFSET.
- Utilize sensitivity analysis tools: Data Tables, Goal Seek, and Scenario Manager.
- Format models properly (blue text for hardcodes, black for formulas, green for external links).
- Use pivot tables to quickly summarize large datasets.
3-Statement Modeling
Build dynamic, interconnected models projecting a company's future operating performance based on historical data and driver assumptions.
Real-world task: Build a rolling 5-year 3-statement forecast model for a mid-cap consumer goods company from scratch, ensuring the balance sheet balances perfectly every projected year.
Why it matters: The 3-statement model is the backbone of FP&A and equity research. Executives make multi-million dollar hiring, budgeting, and acquisition decisions based on these projections.
Checklist
- Construct historical trailing twelve months (TTM) financial summaries.
- Forecast revenue growth and expense margins using historical trend lines.
- Build a working debt schedule and a detailed depreciation (PP&E) schedule.
- Integrate the three statements so that they dynamically forecast 5 years out.
- Balance the balance sheet securely using a cash plug without circular references.
Valuation Techniques (DCF & Comps)
Determine the intrinsic and relative value of a company using the industry's default methodologies.
Real-world task: Perform a complete DCF valuation on a publicly traded tech stock and determine if it is currently overvalued or undervalued relative to its market price.
Why it matters: Valuation defines stock prices, IPO sizing, and startup funding rounds. This translates qualitative business potential into a hard, defensible numeric value.
Checklist
- Calculate a company's Weighted Average Cost of Capital (WACC).
- Project unlevered free cash flows (UFCF) over a forecast period.
- Calculate Terminal Value using both perpetuity growth and exit multiple methods.
- Understand the mechanics of a Discounted Cash Flow (DCF).
- Perform Comparable Company Analysis (spreading comps) finding EV/EBITDA multiples.
Industry & Certification 2 steps
Sector Specialization & Thesis Writing
Develop deep domain expertise in a specific industry and learn to communicate complex investment ideas clearly in writing.
Real-world task: Write a 2-page stock pitch memo for a retail stock, stating a clear 'Buy/Hold/Sell' recommendation backed by 3 quantitative drivers and an assessment of key risks.
Why it matters: The best analysts do more than crunch numbers; they tell a compelling story backed by data. Clear memos are how you convince portfolio managers or corporate executives to allocate capital.
Checklist
- Select and study a specific sector (e.g., SaaS, Healthcare, Real Estate).
- Read 5-10 initiating coverage equity research reports to understand the tone.
- Formulate a distinct investment thesis (buy/hold/sell) based on your chosen firm.
- Write concise, evidence-based investment memos targeting portfolio managers.
- Identify key macroeconomic risks associated with your sector.
Certifications & Networking
Break into the notoriously competitive finance industry by validating your knowledge through exams and proactively building relationships.
Real-world task: Reach out to 5 alumni from your school currently working as financial analysts to set up 15-minute informational coffee chats, and aim to clear the SIE exam within 3 months.
Why it matters: Professional exams prove your baseline quantitative competence, while aggressive networking is often the only route to unlock the 'hidden job market' where analyst roles are filled.
Checklist
- Assess readiness and register for the SIE (Securities Industry Essentials) exam or CFA Level 1.
- Conduct informational interviews with analysts working at target asset management or IB firms.
- Optimize your LinkedIn profile emphasizing quantitative rigor over vague soft skills.
- Curate a portfolio containing your 3-statement models, DCFs, and best stock pitch memos.
- Publish your analyses on a blog or Substack to build a public track record of thought leadership.
Questions people ask about Financial Analyst
Clear answers regarding timelines, prerequisites, salaries, and study strategies.
How long does it take to become a Financial Analyst?
This roadmap estimates 6–12 months. It has 3 phases and 7 steps, from “Accounting Fundamentals” to “Industry & Certification”.
How do I become a Financial Analyst?
Follow the 3 phases in order, starting with Phase 1, “Accounting Fundamentals”. Your first task: Download Apple's latest 10-K from the SEC EDGAR database. Trace Net Income manually to the Retained Earnings on the Balance Sheet and to the top line of the Cash Flow Statement.
How much does a Financial Analyst earn?
Pay depends on the country. The salary box on this page shows DraftMyCareer’s estimate, in local currency, for the country chosen in the menu.
What do I need before starting?
This roadmap lists: Basic math & accounting knowledge; Strong Excel skills (or willing to learn).
What skills does a Financial Analyst need?
This roadmap covers: Financial modeling, Excel, Accounting, Valuation, Data analysis, Communication.
Switch Careers: Paths Into and Out of This Role
See every switch →Next-Step Career Upgrades & Lateral Moves
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View Action Plan
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- Month 1–2: Python Programming & SQL Transition spreadsheet models to Python scripts, pandas DataFrames, and relational databases.
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- Month 1–4: FAR & AUD Preparation Master financial accounting standards, government accounting, and audit procedures.
- Month 5–8: REG & Discipline Specialization Cover federal tax laws, business law ethics, and pass remaining exam modules.
- Month 9–12: Licensing & Experience Complete state board required work experience and secure official CPA license.