Finance Class Study Guides
48 comprehensive guides to help you master finance concepts, from fundamentals to exam prep.
TVM Exam Workflow
A practical process to solve TVM problems quickly and accurately on exams.
Financial Statements Crash Course
A quick primer on reading income statements, balance sheets, and cash flow statements for finance classes.
Capital Budgeting Decision Framework
A structured approach to evaluating investment projects using NPV, IRR, payback, and profitability index.
Bond Valuation Step-by-Step
A complete workflow for pricing bonds, finding YTM, and understanding the price-yield relationship.
WACC Calculation Guide
How to calculate WACC from scratch: finding cost of equity, cost of debt, and capital weights.
Stock Valuation Methods
Compare DDM, DCF, and relative valuation approaches for estimating a stock's intrinsic value.
Risk and Return Analysis
Quantify portfolio risk, calculate expected return, and understand the risk-return trade-off.
CFA Level I: Corporate Finance Overview
A comprehensive review of the corporate finance topics tested on CFA Level I, organized by reading.
What Is the Time Value of Money? Formula, Concept, and Examples
Understand why a dollar today is worth more than a dollar tomorrow, learn the core TVM formulas, and see how present and future value calculations work with clear examples.
How to Read a Balance Sheet: What Every Finance Student Needs to Know
Learn to read and interpret a balance sheet including assets, liabilities, equity, and the key ratios that reveal a company's financial health.
What Is Net Present Value (NPV) and How Do You Calculate It?
Learn what NPV means, how to calculate it step by step, why it is the gold standard for investment decisions, and how to interpret positive and negative results.
Financial Ratios: The Complete Guide to Liquidity, Profitability, Leverage, and Efficiency Ratios
Financial ratios transform raw financial statement data into actionable insights about a company's health, performance, and risk. This guide covers the most important ratios across four categories — liquidity, profitability, leverage, and efficiency — with formulas, interpretation guidance, and the context that makes ratios meaningful rather than just numbers.
How to Build a DCF Model: Step-by-Step Discounted Cash Flow Valuation
The Discounted Cash Flow model is the gold standard of intrinsic valuation — it values a company based on the present value of its future cash flows rather than market sentiment or peer comparisons. This guide walks through building a DCF from scratch: projecting free cash flow, calculating terminal value, selecting the discount rate, and interpreting the output.
Bond Pricing and Yield to Maturity: How Bond Math Actually Works
Bond prices and yields move inversely, but understanding why — and being able to calculate prices, yields, and duration — requires grasping the present value mechanics that drive fixed-income markets. This guide builds from first principles to exam-ready calculation fluency.
What Is Working Capital Management? Cash Conversion Cycle, Ratios, and Strategies
Learn how working capital management keeps companies solvent even when they look profitable on paper. This guide breaks down the cash conversion cycle, current and quick ratios, and practical strategies for managing the gap between paying suppliers and collecting from customers.
Options Explained: Calls, Puts, and How Payoff Diagrams Work
Understand how stock options work from the ground up — what calls and puts actually are, how to read payoff diagrams, why options lose value over time, and how covered calls and protective puts work. Written for finance students encountering derivatives for the first time.
Mergers and Acquisitions: How M&A Valuation Works from Letter of Intent to Close
A walkthrough of the M&A process covering how acquirers value target companies, what happens between the letter of intent and closing, the role of due diligence, and how deal structure affects what shareholders actually receive.
Loan Amortization Explained: How Payments Work, How to Build a Schedule, and Why Extra Payments Save Thousands
A practical guide to loan amortization covering how each payment splits between principal and interest, how to build an amortization schedule from scratch, and the surprisingly large impact of extra payments on total interest paid.
How the Federal Reserve Sets Interest Rates and Why It Affects Everything in Finance
A practical explanation of how the Federal Reserve influences interest rates through the federal funds rate, open market operations, and forward guidance, and why changes in Fed policy ripple through bond prices, stock valuations, mortgage rates, and the broader economy.
Portfolio Construction: How to Build a Diversified Portfolio Using Modern Portfolio Theory
A practical guide to portfolio construction covering the core concepts of Modern Portfolio Theory, how diversification works at the mathematical level, the efficient frontier, how to think about asset allocation, and common mistakes that destroy the diversification benefit.
Behavioral Finance: Why Smart People Make Irrational Money Decisions
A guide to the major findings of behavioral finance covering the cognitive biases that cause predictable financial mistakes — loss aversion, anchoring, overconfidence, herding, and mental accounting — with real-world examples and strategies for recognizing and mitigating each bias in your own decision-making.
How to Analyze Financial Statements: Horizontal, Vertical, and Ratio Analysis Step by Step
A practical guide to analyzing financial statements covering the three core methods — horizontal analysis (trend over time), vertical analysis (common-size percentages within a period), and ratio analysis (relationships between line items) — with worked examples showing how each method reveals insights that raw numbers hide.
ETFs vs Mutual Funds: Fees, Tax Efficiency, and Which Is Better for Your Portfolio
A practical comparison of ETFs and mutual funds covering how each is structured, the fee differences that compound over decades, tax efficiency mechanics, trading flexibility, and which type fits different investment strategies and account types.
Introduction to Forex: How Currency Pairs, Pips, and Leverage Work
A beginner's guide to the foreign exchange market covering how currency pairs are quoted, what pips measure, how leverage amplifies both gains and losses, the major pairs every trader should know, and why forex is fundamentally different from stock trading.
How Credit Scores Actually Work: FICO, VantageScore, and What Lenders Really Look At
A practical guide to credit scoring covering how FICO and VantageScore are calculated, the five factors that determine your number, why different lenders see different scores, the credit behaviors that help and hurt most, and the common myths that lead to bad decisions.
Real Estate Investing: REITs vs Rental Properties vs Fix-and-Flip — Which Strategy Fits You
A practical comparison of the three main real estate investment approaches: REITs (liquid, passive, low entry), rental properties (illiquid, semi-passive, leveraged returns), and fix-and-flip (active, high-risk, short-term gains) — covering returns, risks, capital requirements, tax treatment, and which strategy matches different investor profiles.
Insurance Fundamentals: How Life, Health, and Property Insurance Actually Work
A practical guide to understanding insurance mechanics — covering how premiums are priced, the difference between term and whole life, how health insurance deductibles and networks actually work, property insurance valuation methods, and the coverage gaps that catch people when they need insurance most.
Cryptocurrency and Blockchain: What Finance Students Need to Know (Without the Hype)
A no-hype guide to cryptocurrency and blockchain technology for finance students — covering how the technology works at a mechanical level, the economic properties of major cryptocurrencies, how crypto fits into portfolio theory, the regulatory landscape, and why most of what you read about crypto online is marketing disguised as education.
Tax Planning Fundamentals: How Brackets, Deductions, and Credits Actually Work
A practical guide to US tax planning covering how marginal tax brackets actually work (they are not what most people think), the standard vs itemized deduction decision, the most valuable tax credits, and the timing strategies that legally reduce your tax burden without exotic structures.
Personal Budgeting and Emergency Funds: The 50/30/20 Rule, Cash Reserves, and Building Financial Stability
A practical guide to personal budgeting covering the 50/30/20 framework, how to build and size an emergency fund, the psychology of spending and saving, and the specific actions that move you from financial anxiety to financial stability faster than you think.
How to Calculate Monthly Loan Payments: The Amortization Formula with Worked Examples
A step-by-step guide to calculating monthly loan payments using the amortization formula — covering mortgages, car loans, and student loans with worked examples, a breakdown of how each payment splits between interest and principal, and what extra payments actually save you.
How to Calculate WACC Step by Step: A Worked Example With Every Formula Explained
A complete worked example of calculating Weighted Average Cost of Capital (WACC) — covering cost of equity (CAPM), after-tax cost of debt, market-value weights, and the most common calculation mistakes that cost students exam points.
How to Calculate ROI (Return on Investment): Formula, Variations, and Worked Examples
A complete guide to calculating Return on Investment (ROI) — covering the basic formula, annualized ROI, ROI with multiple cash flows, and the most common mistakes students make when applying ROI in capital budgeting and investment analysis problems.
Break-Even Analysis: How to Calculate the Break-Even Point in Units and Dollars
A step-by-step guide to break-even analysis — covering the break-even formula in units and dollars, contribution margin, how fixed and variable costs interact, and worked examples for product pricing, startup planning, and capital budgeting decisions.
CAPM, Beta, Systematic Risk, and the Security Market Line Explained
Master the Capital Asset Pricing Model from concept through calculation. Learn what beta really measures, how systematic risk differs from total risk, and how to use the Security Market Line to identify mispriced stocks — with fully worked examples.
Dividend Policy: Payout Ratios, Stock Repurchases, and What Drives Dividend Decisions
Understand how and why companies return cash to shareholders. Learn payout ratio mechanics, compare dividends to stock repurchases, explore the major theories on dividend relevance, and work through calculations that appear on finance exams.
Efficient Market Hypothesis (EMH): Three Forms, Evidence For and Against, and What It Means for Investors
A complete guide to the Efficient Market Hypothesis — covering the three forms (weak, semi-strong, strong), the empirical evidence supporting and challenging each form, the famous anomalies that contradict EMH, and the practical implications for active vs passive investing.
Payback Period and Discounted Payback: How to Calculate, When to Use, and Why It Falls Short of NPV
A complete guide to the payback period and discounted payback methods of capital budgeting — covering the formulas, worked examples for both even and uneven cash flows, the differences from NPV and IRR, and why payback is still used despite its theoretical weaknesses.
Bond Duration and Convexity: How Bond Prices Respond to Interest Rate Changes
A complete guide to bond duration and convexity — covering what each measures, how to calculate modified duration and Macaulay duration, the convexity adjustment for large rate changes, and how to use duration to estimate bond price changes from interest rate movements.
Yield Curve Inversion: Why an Inverted Curve Signals Recession (And Why It Matters for Finance Students)
A guide to yield curve inversion — covering what the yield curve is, why a normal yield curve slopes upward, why inversion historically precedes recessions, the specific inversion measures used by economists and investors, and the recent history of inversion and recession.
Free Cash Flow: FCFF vs FCFE Calculation, Differences, and When to Use Each
A complete guide to free cash flow — covering what FCF measures, how to calculate free cash flow to the firm (FCFF) and free cash flow to equity (FCFE), when to use each in valuation, and the common calculation mistakes that trip up finance students.
Leverage Ratios: Debt-to-Equity, Interest Coverage, and How to Assess Financial Risk
A practical guide to leverage ratios — covering debt-to-equity, debt-to-capital, interest coverage, and other solvency metrics. Explains what each ratio measures, how to calculate them, what 'good' looks like across industries, and why leverage matters for credit analysis and equity valuation.
Options Greeks Explained: Delta, Gamma, Theta, Vega, and Rho with Formulas
A complete guide to the options Greeks — covering what each Greek measures, how to interpret the values, the relationships between them, and how they affect an option's price as market conditions change.
Sharpe Ratio vs Sortino Ratio vs Treynor Ratio: Risk-Adjusted Return Comparison
A complete comparison of the three main risk-adjusted return measures — Sharpe, Sortino, and Treynor ratios. Covers each formula, when to use each, how to interpret the values, and which portfolios each ratio is best suited for.
How to Calculate IRR: Internal Rate of Return with Worked Examples for Multiple Projects
Internal rate of return (IRR) is the discount rate that makes NPV equal zero — the implied yield of a project's cash flows. Learn how to calculate IRR manually via interpolation, use Excel and financial calculators, identify when IRR fails (multiple IRRs, project scale), and interpret the decision rule against hurdle rates.
Put-Call Parity: Formula, Derivation, and Arbitrage Worked Examples
Put-call parity is the fundamental relationship linking European call options, put options, the underlying stock, and risk-free bonds. When the relationship breaks, arbitrage opportunities exist. Learn the formula, the intuition, the arbitrage setup, and the adjustments for dividends and American options.
Beta Calculation Worked Examples: Regression, Unlevered, Relevered, and Bloomberg Adjusted
Beta is not one number — it's a family of numbers depending on how you calculate it. This guide walks through raw regression beta, Bloomberg adjusted beta, unlevered beta for comparable companies, relevered beta for target capital structure, and the judgment calls that matter for WACC calculations in finance classes and CFA exams.
Terminal Value in DCF: Gordon Growth vs Exit Multiple Method (Worked Examples)
Terminal value often accounts for 60-80% of total enterprise value in a DCF — which means the method you choose for terminal value drives your valuation more than any other input. This guide walks through Gordon Growth and Exit Multiple methods with worked examples, sanity checks, and the judgment calls that matter.