Opportunities in the Field of Finance
If you want to enter the field of finance, chances are you’ve only heard of one specific field, which is investment banking. But actually, there’s a lot more to finance.
Different Fields in Finance
Let’s talk about corporate finance, commercial banking, risk analysis, private equity, equity research, wealth management. I could continue this list indefinitely.
Top Finance Skills
But how do you prepare for all these fields at once? Hi everyone and welcome back to the channel! Today, we’re going to talk about the top finance skills that are applicable to all these job roles.
Each role’s skill set requirements vary a bit, but there are some skills that every single finance company would require. At the top of this list is financial reporting and analysis.
Financial Reporting and Analysis
In the field of finance, we mostly either make decisions or sell decisions. In most cases, when we make these decisions, we evaluate the company’s current financial performance.
For those of you who come from the field of accounting, you would know that to evaluate any company’s financial performance, we need financial statements such as balance sheets, income statements, and cash flow statements.
Reading and Analyzing Financial Statements
Because these statements are so important, you need to know two things: how to read them and how to draw inferences from them. If you don’t know how to create these financial statements, that’s perfectly okay, because you’re not a part of accounts. But since you’re a part of finance, you should know how to read them and how to draw inferences from them.
Creating Financial Models
Now, how can this skill be taught? I recommend two sources:
- Some free YouTube videos where it’s explained in detail how financial statements are made in the Indian context.
- The book: “How Finance Works” by Mihir Desai. This book is relevant for those who already have a bit of understanding of financial statements.
Importance of Financial Models
You can evaluate any company’s current performance through their financial statements. But to forecast how a company will perform in the future based on its performance and many other parameters, is what a financial model helps you with.
A financial model is basically a tool created in Excel that will help you decide whether you want to invest in any company or not, or what its valuation should be based on its future performance.
Types of Financial Models
There are lots of kinds of financial models like the three-statement integrated financial model or discounted cash flow model. Now, it’s not necessary to know all these names; what is necessary is to know how to create a financial model. You can take free online courses for this, but it’s such an important skill that every finance company would be looking for this word in your CV: can you create financial models?
Financial Modeling Certification
I recommend you check out certification by the Financial Modeling Institute (FMI). Why? Because their alumni base is accredited and they’re working in companies like PwC, KPMG, and Goldman Sachs.
FMI Foundations Course
If you want to go into investment banking, private equity, or asset management, this is a must-have skill. It’s going to be a crucial decision in your career in the field of finance.
I would recommend you definitely learn it, study it, and pursue this certificate to take your career to the next level.
Industry Analysis and Business Analysis
If you’re working in the field of finance, you have to stay up-to-date. You need to know how every single industry is affected by any news.
Communication Skills
Communication is a very underrated skill, but it is extremely important. In many cases, those who want to enter the field of finance fall behind in soft skills.
These are five skills that are very important in the field of finance.
