10 keySkillsets required to become a better Financial Analyst

Financial modeling is the art of building a dynamic tool (an Excel model) that can be used to evaluate and assess investment opportunities, mergers & acquisitions, capital raising, or assess a company’s historical or forecasted financial performance. Anyone practicing the art of building such Financial Models with the aim of analyzing and forecast is known as a Financial Analyst. In order to be a world-class Financial Analyst, one must possess these few qualities that are extremely essential in their journey.

Let’s take a look at 10 of the best Financial Modelling skills that can help you become of the best Financial Analysts out there:

# Accounting Skills.

It's critical to have a firm grasp of accounting concepts in order to construct a financial model. The matching principle, accruals, revenue recognition, non-cash items like depreciation and amortization, and other ideas are included in this. To comprehend how to read financial statements, how to analyze them, and how to reconstruct them, you must possess appropriate accounting knowledge.

# Excel Skills.

For financial modeling, solid Excel proficiency is essential. Sometimes, building financial models is more of an art than science. To help you save time and construct models as rapidly as possible, you'll need to be familiar with all the major keyboard shortcuts. In order to execute computations and financial analysis, you'll also need to be familiar with all the basic formulae and functions.

# Linking the Financial Statements.

?The ability to link the three financial statements is another crucial skill. This entails dynamically linking the income statement, balance sheet, and cash flow statement in Excel using previous financial statements. For instance, tying the balance sheet's retained earnings to the income statement's net income. The ability to master this can be one of the trickiest, but as with any other skill, practice makes perfect.

# Forecasting Skills.

Being good at forecasting is definitely a blend of both an art and science. An analyst can use regression analysis to predict future results based on historical results. Don’t let the science of regression give you false confidence though, as it still requires making major assumptions about future unknowns. In addition, qualitative factors such as the management team and culture have to be taken into account.

?# Problem-Solving Skills.

?An excellent financial analyst is rational and very well-organized in their thinking. It's crucial to follow a logical information flow when creating a financial model so that other users can quickly grasp what you've done when they open your Excel file.

# Attention to detail.

For financial modeling, this is a crucial competency. If you don't pay attention to detail, you probably won't be good at financial modeling given the abundance of information and the complicated nature of a complex model. Fortunately, if you don't already have the habit, you may train yourself to pay attention to details by simply creating that habit.

# Simplifying Complex Information.

As Leonardo da Vinci once said, “Simplicity is the ultimate sophistication”.

Being able to condense a lot of complex information into a simple manner is one of the traits of someone who excels at financial modeling.

# Commendable Designing Skills.

?Having an eye for design and aesthetics is one of the least talked but most crucial financial modeling abilities. A good financial model is simple to understand and pleasing to the eye; it should have a neat layout, lovely graphics, and look polished

# Presentation Skills.

?One of the most important skills of a great financial modeler is to be able to create an effective PowerPoint Presentation and Pitchbook to communicate the results of the model to managers, executives, or clients. PowerPoint Skills are one of the key essentials that any Financial Modeller must be well trained in as it helps in better storytelling and communicates data and information in the most effective manner.

# Detail VS High-Level Strategy.

A skilled analyst has the uncommon ability to quickly zoom out to high-level business strategy from excessive levels of detail in a model. Most people are better at one than the other, but a select few have the uncommon talent of excelling in both.

In today’s world, big data analysis is an everyday practice. It is essential for a good Financial Modeller to be able to filter essential information out of millions of rows of data and identify the datasets required to accurately extract insights from it.

From a “3 Statement Model” to a “Sensitivity Analysis Model”, a good Financial Analyst has all the necessary skills and practices to gather and filter out data from big datasets and draw useful insights and accurately forecast future predictions and suggest steps to promote growth and avoid any financial trap that an organization could be heading towards.

Added to this, it’s also essential for a Financial Analyst to be able to work on any given data and draw insights as faster as possible.

Hence, a tool that promotes faster workflow and accuracy is a must for any Financial Analyst.

Here is keySkillset. A state-of-the-art online learning tool that promotes speed and efficiency in workflow by upto 10 times. From DCF Steps to Cash Flow Statements, keySkillset’s unique mouse-free technique ensures you’ll never have to touch the mouse while working on Financial Models. KeySkillset uses formulas and shortcuts that completely eliminate the use of a mouse and as a result enhance workflow as well as promote efficiency and accuracy at the same time.

The mouse-free technique also helps in building muscle memory, which translates to never having to look down at the keypad in search of the right keys. Your fingers already know where it is. This hugely impacts the speed of workflow, and when practiced religiously, any Financial Model can be worked on faster than ever before.

Join keySkillset today!!