TLDR;
This video outlines the top five essential skills for anyone looking to succeed in the finance industry. It covers financial reporting and analysis, financial modelling, industry and business analysis, valuation, and communication skills. The video provides resources and practical advice on how to develop these skills, emphasising the importance of continuous learning and practice.
- Financial reporting and analysis involves understanding and interpreting financial statements to make informed decisions.
- Financial modelling is crucial for forecasting a company's future performance and making investment decisions.
- Industry and business analysis requires staying updated on industry trends and understanding how news affects companies.
- Valuation skills are essential for determining the worth of a company.
- Communication skills are vital for presenting ideas and collaborating effectively in the finance sector.
Financial Reporting and Analysis [0:39]
Financial reporting and analysis are crucial in finance for making informed buying or selling decisions based on a company's current financial performance. This involves understanding financial statements like the balance sheet, income statement, and cash flow statement. It's essential to know how to read these statements and draw inferences from them. For those new to this, start with free YouTube videos explaining financial statements in the Indian context. Those with some existing knowledge can refer to the book "How Finance Works" by Mihir Desai for a more in-depth understanding.
Financial Modelling [2:05]
Financial modelling is an important skill that involves using tools, often in Excel, to forecast a company's future performance and make investment decisions. These models help determine if you should invest in a company and what its valuation should be based on its projected performance. There are various types of financial models, such as three-statement integrated models and discounted cash flow models. While knowing the names isn't crucial, understanding how to build a financial model is essential. Consider free online courses or certifications like the FMI Foundations course by the Financial Modeling Institute to enhance your skills.
Industry and Business Analysis [4:14]
Industry and business analysis involves staying up-to-date with industry trends and understanding how news and events affect companies and their stock movements. This includes analysing performance graphs and reports for various businesses. Websites like Screener provide financial reports, graphs, and news updates for companies. For industry-specific knowledge, Trendlyne offers equity research reports. Spend time on these platforms to understand industry and financial statement reporting. Join forums like ValuePickr and the Equity Research Reports Telegram group to engage in discussions and learn how others analyse these reports.
Valuation and Corporate Finance [6:03]
Valuation is a critical skill in finance, enabling you to determine the worth of a company. A highly recommended resource for learning valuation concepts is Professor Damodaran's video lectures, available in both long and short formats. These lectures cover various concepts in detail and are sufficient for understanding valuation. Basic knowledge of valuation is beneficial for MBA finance programs and finance interviews, especially in investment banking. If you have extra time, investing in this resource is highly recommended to prepare for a career in finance.
Communication Skills [7:37]
Communication is an underrated but essential skill in finance. A common issue in the finance field is the lack of soft skills, including communication and confidence. To improve communication skills, practice is key. Despite the number of courses or books, practical application is what truly develops this ability. Dedicate just 10 minutes each day to stand in front of a mirror and rehearse speaking about any topic. This consistent practice will significantly improve your communication skills, which are vital in corporate settings.
