If you run a business, you know that the responsibility for making good financial decisions is too heavy for guesswork. That’s where a financial analyst, sometimes called a controller or comptroller, can help. A financial analyst is like a ship’s navigator, but for a company, rather than a ship. A good navigator studies charts and logs, measures the stars in the sky, takes sea conditions into account, and then advises the captain what course to take.
The financial analyst does something similar for a company by auditing the books and studying market conditions. If all goes well, this gives the controller a clear idea of how things are going for the company and where the most productive places are to invest the company’s money. Having a successful financial analyst on the team is like owning a crystal ball. By looking over the relevant data, and by making educated guesses about what it all means, the comptroller can arm the company with foreknowledge of where the market is going.
Financial analysts do this in several ways. First, they look over the company’s financial statements and public filings to get an idea of how much money the company has to invest. Then, the analyst compares what’s going on at the company with how competitors in the market are doing to forecast what’s going on in the industry. Then, they study trends in the market to get an idea of what the customers, clients, and/or vendors are likely to do in the future.
Finally, the financial analyst collects all this information and boils it down into a report that ends with advice. Sometimes, this is general stuff, like “diversify and be careful.” At other times, a clearer picture emerges, and the analyst can offer firm advice about investing in expansion, for example, or issue a warning about possible layoffs if the augurs are bad.
By accurately guessing where the market is going, a good controller points the way toward profitable investments going forward.