Assignment

Week 10: Discussion #1

“Financial Analyst Skills”

• Based on the information presented in the e-Activity, 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.

o Confident Decision Maker: The financial analyst provides advice to brokers, investors, individuals and others regarding investments to include stocks, bonds, and commodities. Judgment calls regarding predictions about how the investment will perform in the future must be stated in a confident manner because sometimes those calls are wrong and the Analyst should be able to accept the consequences.

o Specialist: They should be specialists within investment categories to include stocks, bonds or commodities, and also subsections of that category.

o Skilled Researcher: A financial analyst should have strong research and analysis skills because they are building blocks to make informed and successful recommendations.

o Effective Marketer: They often need strong marketing skills in order to convince others to follow their investment advice. Making logical and convincing cases as to why their investment is the right choice is key.

o Post-Secondary Education and Professional Credentials: Undergraduate degrees coupled with finance, business administration, or accounting majors gives financial analysts a competitive advantage.

• Assess the key ratios used by Financial Analyst to evaluate the financial performance of company, indicating the ratio that you believe to be the most indicative of future performance. Provide support for your rationale.

o There are a number of financial ratios used by analyst but about five of them that are key.

▪ Debt-to-equity ratio: Which is the quantification of the company’s financial leverage estimated by dividing the total liabilities by stockholders’...