List of Financial Analyst Technical Skills
The most common financial analyst technical skills are accounting, bookkeeping, budgeting, calculating the cost of capitalCost of CapitalCost of capital is the minimum rate of return that a business must earn before generating value. Before a business can turn a profit, it must at least generate sufficient income to cover the cost of funding its operation., derivatives, Excel spreadsheets, forecasting, goal-seeking in Excel, hurdle rate calculations, internal rate of return (IRR), joint-venture analysis, monthly reporting, net present value (NPV)Net Present Value (NPV)Net Present Value (NPV) is the value of all future cash flows (positive and negative) over the entire life of an investment discounted to the present. NPV analysis is a form of intrinsic valuation and is used extensively across finance and accounting for determining the value of a business, investment security,, operating cash flow, perpetuity valuation, return on invested capital, spreadsheet design, terminal value, unlevered free cash flow, valuation analysis, weighted average cost of capital (WACC)WACCWACC is a firm’s Weighted Average Cost of Capital and represents its blended cost of capital including equity and debt. The WACC formula is = (E/V x Re) + ((D/V x Rd) x (1-T)). This guide will provide an overview of what it is, why its used, how to calculate it, and also provides a downloadable WACC calculator, XIRR, year-over-year, and zero-based budgeting. In addition to this list of technical skills, analysts must also be strong in financial modeling and creating presentations, and possess good communication skills. To learn more, check out CFI’s career map.
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