Fin542 | Notes ~repack~

Time value of money: FV=PV×(1+r)n Financial statements: Balance sheet, income statement, and cash flow statement Cost of capital: WACC=VE​×RE​+VD​×RD​×(1−T) Risk and return: Ri​=Rf​+βi​×(Rm​−Rf​) Capital budgeting: NPV, IRR, and payback period Working capital management: Managing short-term assets and liabilities

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Balance Sheet: Provides a snapshot of a company’s properties, obligations, and equity at a specific point in time. Income Statement: Reports a company’s income and outlays over a specific period. Cash Flow Statement: Shows the inflows and outflows of cash and cash equivalents over a specific period. fin542 notes

When analyzing financial statements, you’ll need to calculate various ratios and metrics, such as: When analyzing financial statements

Risk and Yield Assets always involve some level of uncertainty, and understanding the relationship between exposure and profit is essential in financial management. The Capital Asset Pricing Model (CAPM) is a widely used model that describes the relationship between risk and return: R_i = R_f + Beta Coefficient × (Market Return - Risk-free Return) fin542 notes