Professionals who are inclined toward numbers and quantitative methods and are skilled problem solvers can consider pursuing a career in finance. Two of the most important work profiles include financial analyst and equity analyst. The role of Financial analysts is broader. These logical thinkers study the market, evaluate financial data, and help companies make investment decisions. While some financial analysts work internally, some also work for third-party firms—financial analysis. Equity analysts believe in a more microscopic approach. They break down investment opportunities and pinpoint the investment potential. They analyze the value of companies’ shares, conduct financial modeling, and advise the best investments and stocks.  

Let us understand the role of Financial Analyst and Equity Analyst and the similarities and differences between the two.  

 

What is a financial analyst? 

A financial analyst manages a company’s financial condition. They are responsible for managing economic data, analyzing whether the company is in debt or has equity, how the business performs, and more. These professionals also focus on tracking factors like economic direction and market trends. They ensure the company’s business goals and investment objectives are met. 

One of the main parts of their profiles is reviewing financial reports, including expenditures, budgets, revenue, etc. Using this information, they create spreadsheets and make predictions. Based on the company’s financial data, they advise the company on long-term planning. They work on capital structure modeling, managing the company’s operational expenses, developing new financial policies, finding ways to mitigate risks and lower costs, doing comparative analyses, etc.  

 

What is an equity analyst? 

An equity analyst is responsible for viewing a company’s equity or share value. Equity analysts analyze company investments and perform financial modeling. They conduct deep research, write critical reports, make projections, and provide advice by studying a company’s stocks. Equity analysts are also involved in reviewing other companies’ stocks. They research and recommend whether a firm should buy or sell another company’s stocks.  

One of the primary roles of private equity analysts is to review the stock market’s performance, find the latest news, tell the companies to monitor progress, etc. There are two types of equity analysts. The buy-side analysts recommend their employers about the companies with robust investment opportunities. They work for financial advisory companies, brokers, etc. Sell-side equity analysts work for investment banks. These analysts help their employers start publicly selling the stocks, review their financials, and research whether the companies will bring profit to the bank.  

 

Financial analyst vs. equity analyst: The Similarities 

Financial analysts and equity analysts have some similarities that include: 

 

Job Duties 

Financial and equity analysts work in finance and conduct research, analyze financial data, and make forecasts. They also work with stocks, follow market trends, and provide lucrative advice to their clients.  

Education 

Both professionals have a bachelor’s degree in economics, finance, statistics, or a related field. Depending on the individual, they may also have a master’s degree in the related field to help advance their careers. This explains educational requirements of how to get into private equity! 

Skills 

Financial and equity analysts have analytical, critical, problem-solving, and communication skills. They understand numbers and statistics well, and they are knowledgeable about stock markets and market trends. They are comfortable presenting data and making reports and presentations. 

 

Financial analyst vs. equity analyst: The Differences  

Here are the differences between financial analysts and equity analysts: 

 

Job Role  

Financial analysts are more focused on a company’s overall finances, while equity analysts primarily focus on stocks and the stock market.  

Job opportunities 

Financial analysis offers more job opportunities as it has a wider ambit. More financial analysts deal with the financial aspects of the company. The job opportunities for equity analysts are fewer as they work only for banks or MF brokers. Their specialized roles restrict the job openings.  

Work environment 

Equity analysts are believed to work longer as they are placed in investment banks and handle global operations. Financial analysts have varied work environments and job roles, depending on the type of firm and its size.  

Salary 

Equity analysts earn more than financial analysts. While the average annual salary for a financial analyst remains around $67k an equity analyst makes $83k pay-check per year. However, these figures will vary with firm size, location, experience, etc. If you want to earn more, consider becoming private equity analyst.  

 

Wrapping Up 

If you are keen on making your private equity career path but confused about whether to become a financial analyst or an equity analyst, make your decisions based on the education requirements, skills needed, company type, salary, etc. If you want to work for a medium-sized company, go for a financial analyst job. If you want a job with a better salary, consider being an equity analyst. 

If you want to work fewer hours and have more time for family, aim to become a financial analyst. Becoming an equity analyst may be a good option if you are more career-driven and want to specialize in stocks and the stock market.