Why Should You Take a Financial Analysis Course?

Financial analysis skills are in high demand among both finance and non-finance professionals.

According to the US Bureau of Labor Statistics, employment of financial analysts is expected to grow 6% by 2030, creating over 31,000 new 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.

What is Financial Analysis

Financial analysis is 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.

Financial analysts are 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.

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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 circumstances, 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 affects 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.

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, you could end it with both new knowledge and connections.

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.

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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 reimbursement: 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.

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