FP&A vs. Financial Analyst: Key Differences, Skills and Career Paths

Finance, corporate finance, financial planning, financial analysis, financial planning and analysis: some financial jargon isn’t difficult to understand, just difficult to differentiate. In the world of finance, many similar-sounding terms and roles are actually quite different. Understanding those differences can be critical to charting your own pathway in the world of finance.

This blog post looks at two very similarly named functions in the world of corporate finance: financial analysis and financial planning and analysis (FP&A). It considers the differences between those two functions, as well as the areas of overlap. It also looks at how you can acquire the necessary skills to excel either as a financial analyst or an FP&A analyst.

Understanding Corporate Finance vs FP&A

Before looking directly at the FP&A vs. financial analyst distinction, let’s consider the broader context of both roles: corporate finance. What is the difference between finance and corporate finance? Finance is simply the study and management of money and financial resources.¹ Corporate finance is a field within finance. It is concerned with how corporations handle their financial activities, such as funding, accounting and investments.²

Corporate finance is distinguished from other categories of financial activity, such as personal finance (individual financial activities) and government or public finance (the financial activities of nation-states and other public entities).¹

Corporate finance is generally broken down into three broad categories—capital budgeting, working capital management and capital structure.² The execution of these functions requires a variety of finance specialists. Among these specialists, you’ll find financial analysts and FP&A analysts.

It is not generally useful to compare corporate finance with FP&A or financial analysts directly because corporate finance is a broad field, while FP&A and financial analysis are functions within that field.

A financial analyst in corporate finance is typically concerned with questions of past and current financial performance. The role is largely a reporting function, presenting historic and current data to inform decision-making.³ The FP&A function is more forward-looking. FP&A analysts are generally concerned with forecasting revenue and expenses and planning future budgets or modeling outcomes for hypothetical scenarios—information that helps to guide leadership in planning the future direction of the company.

The Role of an FP&A Analyst

Financial planning and analysis is a strategic role within corporate finance.³ FP&A analysts should expect to be experts at forecasting and budgeting, as well as being able to model scenarios and outcomes for planning purposes. They will be skilled in strategic planning and variance analysis, which compares actual results to forecasts and draws insights from the findings.⁴

Effective FP&A can help improve every aspect of a corporation’s finances, from cash flow to forecasting and overall performance monitoring.⁴

The Role of a Financial Analyst in Corporate Finance

“Financial analyst” can be an extremely broad term. In some cases, it can be used to describe the overarching function of which FP&A analysts are a part, or it can be treated as almost synonymous with corporate finance, meaning simply a professional who works in corporate finance.⁵

For the purposes of this blog post, there is a clear difference between corporate finance and a financial analyst. One is a category of work; the other is a function within that category.

A financial analyst is also regarded here as a separate function from FP&A analysis. While FP&A looks ahead and is focused on forecasting and planning, financial analysis is focused on today and yesterday. It is a role principally concerned with analyzing past and present performance, using current and historical data to generate insights. This work can include financial modeling and variance analysis, much like FP&A work, but its primary focus is on what has happened or is happening, not future performance or prediction.³

FP&A vs Financial Analyst: Core Skill Overlaps and Differences

FP&A and financial analysis are both important corporate finance functions. While they have significant differences in focus and day-to-day activities, they also rely on many of the same skills. Indeed, they are both viable job options for master’s in finance graduates.

A master’s in finance curriculum will typically equip its candidates with an advanced understanding of data analysis techniques, proficiency in the latest financial software and strong communication skills–all essential for careers in FP&A and financial analysis.

The master’s curriculum will also test the specific skill sets required for each potential career pathway. Finance master’s grads may ultimately choose whether to pursue careers in FP&A or financial analysis based on how much they enjoy strategic modeling (essential for FP&A) versus reporting accuracy (a cornerstone of financial analysis) in the coursework.

Ultimately, the skills required for either role are more similar than they are different. Both FP&A and financial analysis require professionals who are adept at modeling and presenting financial data and who can draw actionable insights and recommendations from their findings.

Elevate Your Finance Career With William & Mary Mason

Corporate finance requires both forward-looking financial planning experts and reliable analysis of past and present performance. These requirements anchor the FP&A and financial analysis roles in corporate finance, respectively. These roles are an essential part of modern business and exactly the sort of advanced finance roles that master’s in finance graduates seek.

To win these roles, graduates need a thorough understanding of advanced finance methods and software, as well as the strategic and critical thinking skills required to turn knowledge into actionable insight. The Online Master of Finance program from William & Mary’s Raymond A. Mason School of Business is designed to prepare graduates for successful careers in finance. The 100% online program offers flexibility along with the academic rigor of a “Public Ivy,” the second-oldest institution of higher learning in the United States.

Candidates can complete the program in as little as 16 months. Graduates can also earn a specialized certificate in Corporate Finance or Investment Management.

Visit our website for detailed course descriptions, admission requirements, career information and our online application portal. Contact us directly with any questions or schedule a call today with an admissions outreach advisor.