Financial Analysis Definition

Below please find a definition of “Financial Analysis”

Financial Analysis Training & Glossary TermsFinancial Analysis: The process of assessing a company’s business processes, projects, budgets and any miscellaneous finance-related activities is termed as financial analysis. Financial analysis is instrumental in determining whether a company is stable and solvent. Financial analysis is also important for evaluating if a company is profitable enough for investment purposes.

Free MP3 Download:  To download our free 35 minute audio interview with expert Richard C. Wilson on how to succeed in the field of finance please click here.

Fast Financial Training: If you want to take your finance or business career to the next level you should explore our financial analysis certification program, or our training programs on financial modeling, investment banking, hedge funds, or private equity. All of these programs are offered on https://BusinessTraining.com

Expand Your Financial Vocabulary: Read more finance terms and definitions

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Financial Modeling Tutorial

The following video is borrowed from our BusinessTraining.com platform and was originally recorded for our financial modeling training program.  In the following video, you will watch a useful tutorial of financial modeling.

Video Transcript/SummaryThe strategies and tips provided within this video module include:

  1. Coming soon. 

I hope that this video has provided you with a useful financial modeling tutorial.  

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Richard Wilson Interview


Below is an expert audio interview that our team conducted with financial analyst expert, Richard Wilson, listen to this interview if you want to learn more about working as a financial analyst.

Richard Wilson: Richard is the author of 10 books, a global hedge fund speaker and trainer, and head of the 50,000 member Hedge Fund Group and 55,000 member Private Equity Investment Group. Richard has built his finance career from nothing, starting out in Portland, Oregon and going to Oregon State University for his undergraduate degree in business. Within this audio interview Richard shares exactly how just about anyone can have a successful career in finance by focusing on the few key factors that Richard explains in this audio interview.  (Download this Expert Audio Interview in MP3 Format)

Audio Summary/Transcript:  Coming soon…

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Justin Smith Interview

Below is an expert audio interview that our team conducted with financial analyst expert, Justin Smith, listen to this interview if you want to learn more about working as a financial analyst.

Justin Smith: Justin is a senior financial analyst with over 10 years of experience at a Fortune 500 company.  In the following video, Justin shares his experience working as a senior financial analyst.  (Download this Expert Audio Interview in MP3 Format)

Audio Summary/Transcript:  Coming soon…

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Katalin Antal Interview

Below is an expert audio interview that our team conducted with financial analyst expert, Katalin Antal, listen to this interview if you want to learn more about working as a financial analyst.

Katalin Antal: Katalin is a European-based business executive with over 11 years of experience in financial auditing, financial analysis, business analysis, forecasting, management, and controller responsibilities. Katalin has been trained and has lead teams in business and financial analysis at Proctor & Gamble, one of the largest and most successful corporations in the world.  (Download this Expert Audio Interview in MP3 Format)

Audio Summary/Transcript:  Coming soon…

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Cliff Thomas Interview

Below is an expert audio interview that our team conducted with financial analyst expert,  Cliff Thomas, listen to this interview if you want to learn more about working as a financial analyst.

Cliff Thomas: Cliff is a Senior Equity Analyst, he works for a small hedge fund helping build the investment portfolio. The hedge fund he works for invests in small and micro cap securities in the stock market. He also helps build financial models and examine merger and acquisition opportunities.  (Download this Expert Audio Interview in MP3 Format)

Audio Summary/Transcript:  Coming soon…

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Financial Analysis Internship

The following video  is borrowed from our BusinessTraining.com platform and was originally recorded for our financial analyst training program.  Obtaining an internship in financial analysis can be difficult but if you are lucky enough to get one then it can be very rewarding and a good way to start your financial analysis career.  In this video, you will hear some strategies for obtaining a financial analysis internship.

Video Transcript/SummaryThe strategies and tips provided within this video module include:

  1. The career of a financial analyst can be rewarding, which is why it is such a competitive space to get into. In order to set yourself apart, you should consider (i) identifying and contacting a list of potential employers, (ii) make up a project to demonstrate your value to a potential employer, (iii) gain as much specialised knowledge about the industry as possible and (iv) consider working for free.
  2. Identify 30 different potential employers that you want to work for. Set up a spreadsheet with ideally 25 of the 30 being locally based so you can visit these firms face-to-face. Whilst email and phone are great for recurring contact and for reaching those employers farther afield, nothing beats face-to-face meetings. Gather the phone, email and physical address of each employer and track the development of the relationship and any feedback you receive, in the spreadsheet.
  3. Make up a project. Even if an employer outlines that they are not offering an internship, ask them if you can run through a project you think would be beneficial for their company. A competitive analysis report, whether it be based on what other financials firms are doing or what software systems are being used, are typically well received.
  4. Gain as much specialised knowledge as possible, through reading books, blogs, websites, newsletters and other publications. Also consider earning a financial analyst designation or certification, such as the  financial analyst specialist program, which can be found on the Financial Training website. This enables you to speak the language used in the industry. It also highlights that you are passionate about the industry and have spent both time and energy in educating yourself.
  5. Consider working for free. Whilst some are immediately turned off by this, you can approach an employer that is not hiring and agree to work for free for a period of time. By working hard, an employer should recognise the benefits you bring to the firm and might agree to hire you on a more permanent basis.

I hope that this video has provided you with some useful tips and strategies for getting an internship in financial analysis.  

Your friends here at https://investmentcertifications.com

Net Present Value Definition

The following video  is borrowed from our BusinessTraining.com platform and was originally recorded for our financial analyst training program.  In this video, you will learn the definition of Net Present Value and how that calculation is used in financial analysis.


Video Transcript/SummaryThe strategies and tips provided within this video module include:

  1. Money has a time value. The amount you receive today is the Present Value. The amount you receive at some future date is known as a Future Value. To determine the attractiveness of opportunities, future cash flows need to be discounted to the present value, using a discount rate (interest rate).
  2. Discount factor is equal to the PV of $1 and is calculated as 1/(1+r)t. The present value equals the discount factor (DF) multiplied by Cash Flow (Ct).
  3. To calculated the Net Present Value, the PV of future cash inflows and PV of future cash outflows is required. In order to determine the discount rate to use, identify the opportunity cost of capital (i.e. an alternative or second best option). If the alternative return is 12%, use this as our discount rate. 
  4. A project evaluation requires that options are gathered, evaluation is conducted on the second best option, assumptions are reached for both scenarios, cash flows calculated within the project life, cash flows discounted to the present to get NPV and results need to be be risk adjusted.
  5. As an example, what is the PV of $400 in 1 year at 7% or 12% cost of capital? At 7%, the answer is $374 and at 12% it is $357. Therefore, the higher the cost of capital, the lower the PV. Higher risk project as a result require higher rated returns.
  6. You should accept projects where the rate of return is greater than than the cost of capital. You should also accept projects with NPV greater than 0.
  7. When treating depreciation, deduct it to determine profit before tax but add it back once tax has been calculated as depreciation has no effect on cash flows. 
  8. In summary, money has time value, when deciding on investments we need to compare NPVs, accept investment where the rate of return is greater than the opportunity cost of capital and NPV is positive, evaluate projects versus the second best option, cash flows need to be discounted and result need to be risk adjusted.

I hope that this video has provided you with a complete definition of Net Present Value.  

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