FP&A Analyst

Article byWallstreetmojo Team
Edited byAshish Kumar Srivastav
Reviewed byDheeraj Vaidya, CFA, FRM

Who Is The FP&A Analyst?

FP&A Analyst (Financial Planning and Analysis Analyst) plays a big part in analyzing the financials of the corporate industry in various ways by helping the upper management of the corporate industry in the making strategic or financial another decision making, i.e., financial budgeting, forecasting the future cash flow, variance analysis at a regular period, etc.

You are free to use this image on your website, templates, etc, Please provide us with an attribution linkHow to Provide Attribution?Article Link to be Hyperlinked
For eg:
Source: FP&A Analyst (wallstreetmojo.com)

A corporate financial planning and analyst works closely with the executive teams and helps in strategic decision-making for the board of directors, CFO & CEO, etc. The right knowledge, time utilization, and the customer can land the analyst in a very profitable business and success in the future. Thus, the analyst plays a key role by analyzing the various parts of the corporate industry for projecting the future financials and cash flow of the business industry and hence receiving healthier remuneration.

FP&A Analyst Explained

The role of FP & A analyst is that of providing solutions to financial problems or identifying opportunities for better financial planning and growth. They are the ideal combination of skill, talent, knowledge and experience to help the management in financial modeling and forecasting to understand the best option for the organization’s growth and expansion.

They are expert finance professionals who can provide the valuable insight and analysis to guide the management in taking informed decisions. However, it is to be note that the roles and responsibilities of FP&A analyst jobs vary as the industry, type of business, size and market share of business, etc. Analysts working at is big business houses will have more and complex job roles and responsibilities compared to the ones working in smaller ones.

The expertise as per the FP&A analyst resume may range from analysis of cost and revenue, variation from previous estimates, reasons for variation, effect on the current financial scenario, budgeting and forecasting through creation of effective models and analysis of the same, creation of reports and dashboards for quick and better understanding of company’s financial health and performance.

To become a professional and expert in the field of FP&A analyst jobs, it is necessary to be strong in analysis, planning, and modeling, great and comfortable with numbers, and ready to pick up work of the latest and most updated software, which is frequently entering the market to make work easier and less prone to mistakes.

Financial Modeling & Valuation Courses Bundle (25+ Hours Video Series)

–>> If you want to learn Financial Modeling & Valuation professionally , then do check this ​Financial Modeling & Valuation Course Bundle​ (25+ hours of video tutorials with step by step McDonald’s Financial Model). Unlock the art of financial modeling and valuation with a comprehensive course covering McDonald’s forecast methodologies, advanced valuation techniques, and financial statements.

Job Description

FP&A is a different team formed within a corporate entity that is linked with top management, treasury department, and other departments to create and project the cash flowCash FlowCash Flow is the amount of cash or cash equivalent generated & consumed by a Company over a given period. It proves to be a prerequisite for analyzing the business’s strength, profitability, & scope for betterment. read more and profit and loss statement for the board of directors or the top-level management for strategic decision making and for an effective decision regarding the effectiveness of business by improving the cost of operations. It is also used to show and present the financials and growth of the corporation to the potential investor and the shareholdersShareholdersA shareholder is an individual or an institution that owns one or more shares of stock in a public or a private corporation and, therefore, are the legal owners of the company. The ownership percentage depends on the number of shares they hold against the company's total shares.read more.

It is important to note that such senior FP&A analyst professionals may have to perform the financial planning and reporting process related to a particular product or business unit. However, suppose the organization has an extensive and complex operational process. In that case, the job may spread from a single product or unit to financial resource and planning consolidation of different or a combination of products units of business processes.

Responsibilities

Some important responsibilities of the job of senior FP&A analyst are mentioned below in details.

FP&A Analyst

You are free to use this image on your website, templates, etc, Please provide us with an attribution linkHow to Provide Attribution?Article Link to be Hyperlinked
For eg:
Source: FP&A Analyst (wallstreetmojo.com)

There are lots of responsibilities that a financial planning and analyst takes over, and some of them are as follows:

  1. Collection and record of the relevant historical data for the analysis purpose, which might impact the financials of the corporate entity.
  2. Management of a database that contains financial records and statements.
  3. Understanding and keeping track of all the major effects of the micro and macro environmentMacro EnvironmentMacro environment refers to the condition that impacts the whole economy instead of a single industry or sector. It comprises inflation, monetary or fiscal policy reforms, employment rates, gross domestic product (GDP) trends, and shift in consumer spending.read more economy on the corporate entity.
  4. We are maximizing the effectiveness of the cost of operation by analyzing the practice of the business and business delivery with that of market demands.
  5. We are creating and preparing detailedFinancial reporting is a systematic process of recording and representing a company’s financial data. The reports reflect a firm’s financial health and performance in a given period. Management, investors, shareholders, financiers, government, and regulatory agencies rely on financial reports for decision-making.read more financial reportsFinancial ReportsFinancial reporting is a systematic process of recording and representing a company’s financial data. The reports reflect a firm’s financial health and performance in a given period. Management, investors, shareholders, financiers, government, and regulatory agencies rely on financial reports for decision-making.read more and models for analysis by the top management of the company and the potential investors etc.

The above skills are necessary for the candidate to make a place for themselves in this field. These skills will help them to have an advantage over other finance professionals an help the business in not only making strategic financial decisions but also to reach at greater heights through better use of resources, less wastage, cost control and successful attainment of objectives and business targets.

Skills

For being a Financial Planning and AnalysisFinancial Planning And AnalysisFinancial planning and analysis (FP&A) is budgeting, analyzing, and forecasting the financial data to align with its financial objectives and support its strategic decisions. It helps investors to know if the company is stable and profitable for investment.read more Analyst, the following skills are required.

FP&A Analyst-skills

You are free to use this image on your website, templates, etc, Please provide us with an attribution linkHow to Provide Attribution?Article Link to be Hyperlinked
For eg:
Source: FP&A Analyst (wallstreetmojo.com)

Salary

The salary and the bonuses paid to an FP&A Analyst majorly depend upon the size of the corporate entity as the large companies making good profits usually pay more than that of a smaller company. But generally, the experience and expertise of the FP&A Analyst that he introduced into the corporate entity he joined determined his pay-out.

In normal circumstances, the salary of a beginner analyst varies from around $45K to $50K annually, whereas any senior analyst can make around $95K to $100K annually. Depending upon the position that he is offered, he may even be able to make it to six-figure annually, i.e., at the position of a CFOCFOThe full form of CFO is Chief Financial Executive, and he or she is a top level executive of the firm who is responsible for the firm's overall finance functions and has the authority to make financial decisions for the organization. read more (chief financial officer), Manager, or at a position of a director of a big multi-national company can enable FP&A Analyst to earn up to six or seven-figure money annually.

Thus, in a senior FP&A analyst jobs, higher the skill, experience and knowledge, the better is the salary level because it ensures more strategic and effective level of performance, better service for the business and overall, best quality of recommendation and improvement.

How To Become?

After the qualification, an aspirant can join as a junior analyst either in a firm or in the corporate industry. Depending upon the same, the analyst grows into his profession. In the case of Investment banking and other capital marketCapital MarketA capital market is a place where buyers and sellers interact and trade financial securities such as debentures, stocks, debt instruments, bonds, and derivative instruments such as futures, options, swaps, and exchange-traded funds (ETFs). There are two kinds of markets: primary markets and secondary markets.read more fields, the analyst can expect to grow with the experience while attaining higher responsible positions.

The analyst can achieve a senior financial analyst position in a span of 3 to 5 Years and could achieve a level of Analyst Manager or soon achieve a position of director within the corporate entity. In some other fields of work, there is a high probability that a newly joined analyst may remain posted to the same position for a longer period.

Since the role of senior FP&A analyst jobs also depends on the type and sizes of operation of the organization, it is obvious that a small organization will have lesser levels in their analyst ladder, which may, at the most, include an analyst or a manager. But a big corporate house will include various levels of the profile that may range from analyst to an associate to a senior analyst and then to a manager. The task may also be delegated to the professionals as per the different business units or functions and departments.

Exit Strategy

Some of the analysts work in the same corporate industry and might be working in the same position. But most of them, after a span of 3 to 5 years, start to grow and may end up in the position of Analyst Manager, COO, CFO, etc., and may also reach the level of director of the corporate industry. Some analysts may end up in their practice by becoming a consultant for the clients, creating their firms, and carrying on their profession.

Therefore the exit of such professionals mark a level of experience where they are the best in the industry in terms of financial planning, analysis and forecast. They are ready to set up their own business of providing advisory services and use their best in class corporate experience to independently handle clients and become an integral part of the financial market.

FP&A Analyst Vs Financial Analyst

Both the above roles are related to the finance field but with certain differences. Let us study the differences of the same.

  • The former focusses on planning, budgeting, forecasting, etc, that help to foresee the future and set goals and deadlines as per requirements. But the latter involves the role of the former as well as some additional responsibilities like market research, risk and investment analysis, portfolio management, etc.
  • The former deals with both short and long term financial decisions and planning but the latter deals mostly with short term planning and investment decisions, even though sometimes there may be instances for investment strategies for long term.
  • From skill point of view, the requirements of both are more or less same, which involve analytical skill, financial modelling skills, knowledge of various financial instruments, understanding of market movements and fluctuations, interpretation of company goals and designing strategies to obtain the same.

Therefore, the above are some important differences between the two types of professions.

Recommended Articles

This has been a guide to who is FP&A Analyst. We explain the job description, differences with financial analyst, salary, how to become & skill. You can learn more about finance from the following articles –