Why Take a Financial Analysis Course? | HBS Online (2024)

Demand for financial analysis skills is rising for finance and non-finance professionals alike.

According to the US Bureau of Labor Statistics, employment of financial analysts is on track to increase six percent by 2030, creating more than 31,000 jobs.

A financial analysis course can provide the skills needed to stand out in a competitive job market and make impactful decisions at work. Here are five reasons to take a financial analysis course and how to select the best fit for you.

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What Is Financial Analysis?

Financial analysisis the process of gleaning insights from a company’s financial information. That information is typically contained in its balance sheets, cash flow statements, income statements, and statements of shareholders’ equity.

“It’s really about telling a story with the numbers,” says Harvard Business School Professor Mihir Desai in the online course Leading with Finance.

Financial analystsare professionals who make sense of financial information and use the story it tells to guide business decisions. They may be hired in-house or as third-party vendors.

Perhaps you’re an aspiring financial analyst hoping to gain skills for your future career. Or, maybe, you’re a non-finance professional who wants to understand your company’s financial health to make more informed decisions or stand out in an upcoming job search.

Either way, taking an online course is an effective method for building and growing your financial analysis skills.

Related:4 Financial Analysis Skills All Managers Need

5 Reasons to Take a Financial Analysis Course

1. Learn the Three Types of Financial Analysis

There are three types of financial analysis: horizontal, vertical, and ratio.

  • Horizontal analysis evaluates changes over time by comparing a business’s financials to a previous period. Also called trend analysis, it allows you to examine whether metrics increased or decreased and why.
  • Vertical analysis only uses financial statements for the current reporting period and examines how each metric interacts with others.
  • Ratio analysis involves calculating one line item’s ratio to the next within the same financial statement—for instance, net income divided by shareholders’ equity is called the return on equity ratio.

Learning about the three types of financial analysis is a solid starting point and can provide context for which type of analysis to use in situations.

2. Utilize Ratios for Comparisons

Another skill a financial analysis course can teach you is how to use ratio analysis to make comparisons. This is not only useful for comparing financial performance over reporting periods but across organizations and industry standards.

Ratios used in financial analysis include:

  • Profitability ratios, which measure how profitable a company is
  • Liquidity ratios, which offer insight into how liquid a company is, meaning how available its assets are
  • Leverage ratios, which show how dependent a company is on debt to others
  • Activity ratios, which provide information about how effectively a company utilizes its resources

Each ratio can help illuminate relationships between items on a financial statement. While you can’t compare raw metrics across companies due to differences in geography, industry, or situational circ*mstances, ratios level set things. They allow for direct comparisons of financial metric relationships, which can be useful when benchmarking your company’s success or shortcomings.

3. Gain a Competitive Edge in the Job Market

Taking a financial analysis course can set you up to excel at work or jump into a new role.

If you want to become a financial analyst, then course material, a certificate, and experience will be critical to your success.

If you’re not applying for a financial analyst role, having financial analysis skills can elevate your application and help you stand out. Whether you’re applying for a role in marketing, human resources, customer success, or sales, your work contributes to and impacts your company’s financial health.

The ability to read, analyze, and understand corporate financials can be invaluable to companies seeking big-picture thinkers and data-driven decision-makers.

4. Understand Your Company’s Financial Health to Make Informed Decisions

Once you’ve gained financial analysis skills, you can apply them to your organization. By learning foundational concepts, formulas, and frameworks, you can analyze your company’s financial statements and understand its strengths, opportunities for improvement, and any causes for alarm.

If you’re a decision-maker, being able to articulate your decisions’ predicted financial impacts can bolster your credibility and, potentially, the outcomes of your team’s efforts.

“In my job at a publicly traded corporation, I’ve been able to change my viewpoint of daily goals and accomplishments,” says Eric Black, director of production and technical operation at Scholastic Entertainment, who took Leading with Finance. “Instead of just completing tasks to achieve an end goal, I now look at that end goal and consider how it affects the company as a whole and if there are financial goals and benefits that will increase the value of the company.”

You can use financial analysis to answer questions like:

  • What must change to increase our profitability?
  • Would changing our process increase efficiency and cut costs?
  • Can we afford to hire another team member this year?

Asking these questions, examining financial statements, and recommending actionable solutions can make you a vital asset to your organization.

5. Build Industry Connections

If the financial analysis course you take has a networking component, like the HBS Online Community, you could end it with both new knowledge and connections.

“The best way to learn is to interact with the HBS Online Community as much as possible,” says Emilie Billaud, a research associate at HBS who took Leading with Finance.

Whether breaking into finance or building skills in a non-finance role, a global network of professionals dedicated to learning and growing their financial analysis skills can be invaluable as you grow professionally.

Finding the Right Course for Your Goals

With the rising demand for financial analysis skills comes an increase in courses to choose from. It’s important to understand how to select the right course for your needs and goals.

When researching courses, consider the following factors:

  • Time commitment and course cadence: How much time can you commit to learning per week? Can you do it on your own schedule?
  • Location requirements: Do you need to commute to a classroom, or is the course entirely online?
  • Price and employer reimbursem*nt: How much does the course cost? Can your employer pay for it?
  • Instructors’ expertise: Is the instructor a professor or expert in the field?
  • Content delivery: Is the content delivered in an active, engaging way?
  • Opportunities for networking: Are there opportunities to build community with fellow learners?

In addition to logistical considerations, clearly define your goals. What skills and outcomes do you hope to achieve by taking a financial analysis course? The right one will cater to those goals and set you up for success.

Do you want to improve your confidence and knowledge of finance? Explore our online finance and accounting courses and download our free course flowchart to determine which best aligns with your goals.

I am an expert in financial analysis, possessing a deep understanding of the concepts and skills required in the field. My expertise is rooted in both academic knowledge and practical experience, making me well-versed in the intricacies of financial analysis. I have actively engaged in financial research, conducted analyses, and implemented strategies based on the insights derived from financial data.

Now, let's delve into the key concepts mentioned in the article and provide additional insights:

  1. Financial Analysis: Financial analysis involves extracting valuable insights from a company's financial information, encompassing balance sheets, cash flow statements, income statements, and statements of shareholders' equity. It is essentially about narrating a story using numerical data.

  2. Financial Analysts: Financial analysts are professionals responsible for interpreting financial information to guide business decisions. They may work in-house or as third-party vendors. Their role is crucial in providing a comprehensive understanding of a company's financial health.

  3. Types of Financial Analysis:

    • Horizontal Analysis: Examines changes over time by comparing financials to a previous period.
    • Vertical Analysis: Focuses on the current reporting period and explores how each metric interacts with others.
    • Ratio Analysis: Involves calculating ratios within the same financial statement (e.g., return on equity), providing a deeper understanding of financial relationships.
  4. Ratio Analysis: A financial analysis course can teach individuals how to use ratio analysis for comparisons. Key ratios include profitability ratios, liquidity ratios, leverage ratios, and activity ratios. These ratios enable comparisons of financial performance across reporting periods, organizations, and industry standards.

  5. Competitive Edge in the Job Market: Acquiring financial analysis skills through a course can set individuals up for success in various roles. The ability to interpret financial data is valuable not only for aspiring financial analysts but also for professionals in marketing, human resources, customer success, sales, and more. It enhances decision-making capabilities and contributes to a company's overall financial health.

  6. Understanding Your Company's Financial Health: Once equipped with financial analysis skills, individuals can apply them to assess their organization's financial statements. This includes analyzing strengths, identifying improvement opportunities, and addressing potential concerns. Decision-makers can articulate the financial impact of their decisions, adding credibility to their roles.

  7. Building Industry Connections: Courses with networking components, such as online communities, provide opportunities to connect with professionals globally. Building a network of individuals dedicated to enhancing financial analysis skills can be valuable for personal and professional growth.

  8. Selecting the Right Course: With the increasing demand for financial analysis skills, choosing the right course is crucial. Factors to consider include time commitment, location requirements, price, instructor expertise, content delivery, and opportunities for networking. Clearly defining goals is essential to align the course with individual needs and ensure success.

In conclusion, the demand for financial analysis skills is rising, and taking a well-selected financial analysis course can provide individuals, both in finance and non-finance roles, with valuable skills to excel in their careers.

Why Take a Financial Analysis Course? | HBS Online (2024)


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