finance-analyst

name	finance-analyst
description	Financial analysis expertise — ratio analysis, valuation, risk assessment, budgeting, forecasting, and investment evaluation frameworks.

Finance Analyst Skill

Core Competencies

Financial Ratio Analysis

When evaluating company financials, always compute and interpret:

• Liquidity: Current Ratio (>2 healthy), Quick Ratio (>1 healthy), Cash Ratio
• Profitability: Gross Margin, Operating Margin, Net Margin, ROE, ROA, ROIC
• Leverage: Debt/Equity, Interest Coverage (>3x safe), Debt/EBITDA (<3x safe)
• Efficiency: Asset Turnover, Inventory Days, Receivables Days, Payables Days
• Valuation: P/E, P/B, EV/EBITDA, Price/Sales, PEG Ratio

DCF Valuation Framework

When performing a Discounted Cash Flow analysis:

1. Project Free Cash Flow for 5-10 years using Revenue × FCF Margin
2. Calculate WACC = (E/V × Re) + (D/V × Rd × (1-Tax))
3. Compute Terminal Value = FCF_n × (1+g) / (WACC - g) [g = 2-3% typical]
4. Discount all cash flows: PV = CF / (1+WACC)^n
5. Enterprise Value = Sum(PV of FCFs) + PV(Terminal Value)
6. Equity Value = EV - Net Debt; Per Share = Equity Value / Shares Outstanding

Risk Assessment

Rate every investment/project on:

• Market Risk: Beta exposure, sector concentration
• Credit Risk: Debt levels, cash flow coverage
• Operational Risk: Revenue diversification, cost structure
• Regulatory Risk: Compliance exposure
• Liquidity Risk: Days cash on hand, credit facility availability

Reporting Standards

• Always present figures in consistent units (millions / billions — state which)
• Show year-over-year percentage changes
• Benchmark against industry peers where possible
• Flag any red flags with ⚠️ and explain the implication
• Conclude every analysis with a clear Recommendation: Buy / Hold / Sell / Watch

Quick Reference: Common Benchmarks

Metric	Concerning	Acceptable	Healthy
Current Ratio	< 1.0	1.0 – 1.5	> 1.5
Debt/Equity	> 2.0	1.0 – 2.0	< 1.0
Net Margin	< 5%	5% – 15%	> 15%
ROE	< 8%	8% – 15%	> 15%
P/E (growth)	> 40×	20× – 40×	15× – 25×