ACC 557 Week 10 DQ1
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Date Created: 11/11/15
ACC 557 Week 10 DQ1 quotFinancial Analyst Skillsquot Please respond to the following Based on the information presented in the eActivity recommend the skills that are required to be a successful Financial Analyst indicating how the role of a Financial Analyst adds value to a company Provide support for your answer Assess the key ratios used by Financial Analyst to evaluate the financial performance of company indicating the ratio that you believe to be most indicative of future performance Provide support for your rationale Financial analysts provide guidance to businesses and individuals making investment decisions They assess the performance of stocks bonds and other types of investments Bureau of Labor Statistics 2012 In order to be a successful Financial Analyst he or she must be proficient in evaluating current and historical financial data He or she must be math savvy and work well with numbers In addition he must be able to study a company39s financial statements and analyze commodity prices sales costs expenses and tax rates to determine a company39s value by projecting the company39s future earnings Bureau of Labor Statistics 2012 Likewise he must also be aware of business and economic trends to ensure that his advice on suggested investments is based on relevant and current information He should be able to also focus on trends affecting a specific industry geographical region or type of product and understand how new regulations policies and political and economic trends may affect investments Bureau of Labor Statistics 2012 Being an expert in analyzing financial data is one aspect of being a successful financial analyst The other factor that determines a successful financial analyst is his interpersonal skills Is he a people person Is he able to establish a trusting professional relationship with potential investors It is important that he can communicate and convey potential investment ideas with potential investors The more trustworthy people see him the more investors he will attract for the company A key ratio that is used by Financial Analysts which I deem is the most indicative of future performance is the profitability ratio According to Gibson 1997 quotAnalysis of profit is of vital concern to stockholders since they derive revenue in the form of dividends Further increased profits can cause a rise in market price leading to capital gains Profits are also important to creditors because profits are one source of funds for debt coverage Management uses profit as a performance measurequot p 385 REFERENCES Bureau of Labor Statistics 2012 Retrieved at httpwwwblsgovoohbusinessand financialfinancialanalystshtmtab2 Good Financial Analysts Are Made Not Born Retrieved from httpWWW3cfocomarticle20126training fpa raiswellfinancialplanninganalysiscoporate executiveboard Gibson Charles H 1997 Financial Statement Analysis Using Financial Accounting Information Cincinatti Ohio SouthWestern College Publishing Manley NA 1999 Financial Ratios Retrieved on at httpWWWstfranciseducontentbaghkickulstuwebsbtopicsworksratioshtm
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