Financial analyst definition

A financial analyst is a professional who studies financial information to help a business, investor, or institution make decisions. They work with data such as revenue, costs, cash flow, debt, and market conditions.

A financial analyst reviews financial statements, builds models, prepares forecasts, and assesses investment opportunities. Their conclusions can guide decisions on shares, bonds, company budgets, valuations, or a merger.

A financial analyst differs from an accountant, who records and reports what has already happened; the analyst interprets that data to judge what may happen next. Sell-side analysts publish research for the market, while buy-side analysts work in-house for the firms that invest.

Financial analyst Example

A financial analyst reviews a company's income statement, balance sheet, and cash flow statement.

The analyst builds a forecast model to estimate future revenue, costs, and profit.

If the model points to strong earnings growth and manageable debt, the analyst may conclude that the company has a healthier financial outlook.