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Learn Finance foundations

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B Basic

Time value of money8m
Discount rates and required returnPro9m
The three financial statements at a glancePro7m
From revenue to net incomePro9m

A Advanced

Annuities and perpetuitiesPro10m
Cash versus accrual: why profit is not cashPro9m
NPV and IRR: judging an investmentPro10m

FlashcardsPro0/28
Basic quizPro80% passes
Advanced quizPro80% passes
Terms

Finance foundations

0
of 7 lessons: 0
of 28 cards

Flashcards Start the first lesson

The ideas everything else in banking sits on: money has a time value, risk sets the discount rate, and profit is not the same thing as cash. Start here if you have never taken a finance class.

BBasic4 lessons

1Time value of moneyA dollar today is worth more than a dollar next year, because today's dollar can be invested. Every valuation in banking is built on that one sentence.8 min
2Discount rates and required returnProThe discount rate is the return an investor demands for waiting and for taking risk. Pick it wrong and every valuation built on it is wrong.9 min
3The three financial statements at a glanceProThe income statement, the balance sheet, and the cash flow statement each answer a different question about a company. Learn which question each one answers before learning the line items.7 min
4From revenue to net incomeProThe income statement is a staircase from what customers paid to what owners keep. Each step has a name and each name has a margin bankers quote.9 min
Basic quizPro10 questions, 80% passes

AAdvanced3 lessons

5Annuities and perpetuitiesProShortcuts for valuing a stream of equal payments, a stream that never ends, and a stream that grows forever. The last one is the terminal value in every DCF.10 min
6Cash versus accrual: why profit is not cashProAccounting records revenue when it is earned and costs when they are incurred, not when cash moves. The gap between the two is what the cash flow statement exists to explain.9 min
7NPV and IRR: judging an investmentProNet present value says how much an investment is worth after paying for it. IRR says what return it earns. Together they are how bankers and investors decide whether a deal clears the bar.10 min
Advanced quizPro10 questions, 80% passes