Difference Between Financial Analyst and Business Analyst
A financial analyst is responsible for collecting as well as analyzing the financial information of the company to make sound investment decisions. On the other hand, a business analyst analyses how the client is performing its business activities and suggests the steps that the client can take for improving the business functions.
Both financial analystsFinancial AnalystsA financial analyst analyses a project or a company with the primary objective to advise the management/clients about viable investment decisions. They do a thorough financial analysis and make suitable objective projections to arrive at their conclusions. and business analysts analyse the client’s financial data and based on such an analysis, they help the clients make important business decisions. However, due to the difference in the kind of data they analyze, they differ. Here is the infographics detailing the differences –
Similarities Between Financial Analyst and Business Analyst
- Examination of Data – Both the financial analyst and the business analyst are responsible for examining their client’s data and giving useful insight to the business owners based on their examination. While a financial analyst examines financial data, a business analyst examines the day-to-day business data.
- Help Businesses in Decision Making – Both professionals intend to arrive at meaningful conclusions or facts that could help businesses make important decisions. A financial analyst helps businesses make financial decisions, and a business analyst helps the businesses make business-related decisions.
- Can be Internal or External – Both financial analysts and business analysts can either be internal to the business, i.e. an employee or an independent professional. If they are employees, they earn remuneration from the business entityBusiness EntityA business entity is one that conducts business in accordance with the laws of the country. It can be a private company, a public company, a limited or unlimited partnership, a statutory corporation, a holding company, a subsidiary company, and so on., and if they are independent professionals, they earn professional fees from the business entity.
- Strong Analytical Skills are Needed – These professionals require strong analytical skills since they must interpret data and help businesses make important decisions by making useful conclusions. Thus, they need to pay attention to minute details and relate one fact to the other to represent the business situation in a better manner.
Key Differences Between Financial Analyst and Business Analyst
|Basis of Difference||Financial Analyst||Business Analyst|
|Focus Area||Financial analysts study a business’s financial data and help the business make investment and other finance-related decisions. They perform financial modelingFinancial ModelingFinancial modeling refers to the use of excel-based models to reflect a company's projected financial performance. Such models represent the financial situation by taking into account risks and future assumptions, which are critical for making significant decisions in the future, such as raising capital or valuing a business, and interpreting their impact. and conduct studies to make forecasts.||Business analysts study the day-to-day operations of a business and advise regarding the management of business decisions. To do the same, they analyze business strategies, models, processes, and systems.|
|Educational Requirements||A person must have a bachelor’s degree in finance, economics, and economics to become a financial analyst.||To become a business analyst, one must have an educational qualification in management, accounts, finance, and IT.|
|Skills Requirement||A financial analyst’s skills include financial planningFinancial PlanningFinancial planning is a structured approach to understanding your current and future financial goals and then taking the necessary measures to accomplish them. Because this does not begin and end in a specific time frame, it is referred to as an ongoing process. & forecasting, financial reportingFinancial ReportingFinancial Reporting is the process of disclosing all the relevant financial information of a business for a particular accounting period. These reports are used by the stakeholders (investors, creditors/ bankers, public, regulatory agencies, and government) to make investing and other relevant decisions. , business valuation, statistics, data analysis, MS Excel, etc.||Business analysts must have the necessary expertise in planning, strategizing, implementing, and problem-solving to effectively carry out their job.|
|Salary Range||The average salary drawn by a financial analyst ranges from $53,000 to $66,000.||The average salary drawn by a business analyst ranges from $54,750 to $69,000.|
|Growth Prospects||The growth prospects for the job are less as compared to business analysts.||The growth prospects for the job are more as compared to financial analysts.|
These were some points that differentiate financial analysts from business analysts. It would be best to choose a career that best suits your educational qualifications, interest, and work experience.
This has been a guide to Financial Analyst vs Business Analyst. Here we discuss the top similarities and differences between the two along with infographics. You may also have a look at the following accounting articles –