Change of approach. Each card will contain important note and methods of calculation if necessary.
- Time Value of Money (TVM)
- Future Value (FV)
- Present Value (PV)
- Net Present Value (NPV)
- Internal Rate of Return (IRR)
- Modified Internal Rate of Return (MIRR)
- Discount Rate
- Risk-free Rate
- Risk Premium
- Beta (measure of systematic risk)
- Annuity
- Perpetuity
- Present Value of an Annuity (PVA)
- Payback Period (simple capital budgeting metric)
- Discounted Payback Period
- Profitability Index (PI)
- Crossover Rate (relevant when comparing two projects' NPV profiles)
- Effective Annual Rate (EAR)
- Annual Percentage Rate (APR)
- Weighted Average Cost of Capital (WACC)
- Cost of Equity (e.g., via CAPM: r = Rf + β(Rm – Rf))
- Cost of Debt (after-tax: r_d(1 – T))
- Capital Structure (mix of debt and equity financing)
- Optimal Capital Structure
- Pecking Order Theory
- Trade-off Theory
- Modigliani-Miller Theorems (with/without taxes)
- Working Capital (Current Assets – Current Liabilities)
- Operating Cash Flow (OCF)
- Free Cash Flow (FCF) = OCF – CapEx
- Capital Expenditure (CapEx)
- Dividend Policy (e.g., residual, stable, or constant payout)
- Stock Repurchase / Treasury Stock
- Stock Split & Reverse Stock Split
- Dividend Reinvestment Plan (DRIP)
- Going Public (synonym for IPO)
- Float (public offering from private company)
- Private Placement
- Fully Drawn Advance
- Fixed vs. Floating Interest Rates
- Primary Market (new securities issuance: IPOs, bond offerings)
- Secondary Market (trading of existing securities)
- Stock Exchange (e.g., NYSE, NASDAQ)
- Over-The-Counter (OTC) Market
- Liquidity (ease and cost of converting asset to cash)
- Market Efficiency (Weak, Semi-Strong, Strong forms)
- Security (equity, debt, derivative)
- Common Stock (Equity)
- Preferred Stock
- Bond (corporate, government, municipal)
- Zero-Coupon Bond
- Convertible Bond
- High-Yield Bond (aka Junk Bond)
- Investment Grade bonds
- Green Bonds, Social Bonds, Sustainability-Linked Bonds
- Index Fund
- Exchange-Traded Fund (ETF)
- Mutual Fund
- Blue-Chip Stock
- Market Capitalization (Large-cap, Mid-cap, Small-cap)
- Equity Capital Markets (ECM)
- Debt Capital Markets (DCM)
- Special Purpose Acquisition Vehicle (SPAC)
- Securitization (e.g., MBS, ABS)
- CUSIP / ISIN (security identifiers)
- Dual Currency Bond
- Private Equity (as market participant)
- Income Statement (I/S) – Revenue to Net Income
- Balance Sheet (B/S) – Assets = Liabilities + Shareholders’ Equity
- Cash Flow Statement (CFS) – Operating, Investing, Financing activities
- Revenue (or Sales)
- Cost of Goods Sold (COGS)
- Gross Profit = Revenue – COGS
- Operating Expenses (OpEx) – SG&A, R&D
- EBIT (Earnings Before Interest and Taxes)
- EBITDA (adds back Depreciation & Amortization)
- Net Income
- Non-Controlling Interest (NCI)
- Depreciation (tangible assets)
- Amortization (intangible assets)
- Capitalized Expense vs. Expensed
- Accrual Accounting (vs. Cash Accounting)
- Matching Principle
- Materiality
- Going Concern assumption
- Assets: Accounts Receivable, Inventory, PP&E, Goodwill
- Liabilities: Accounts Payable, Accrued Expenses, Long-term Debt
- Shareholders' Equity: Common Stock, Retained Earnings, Treasury Stock
- Current Ratio = Current Assets / Current Liabilities
- Quick Ratio (Acid-Test) = (CA – Inventory) / CL
- Cash Ratio = Cash / CL
- Inventory Turnover = COGS / Avg Inventory
- Days Sales Outstanding (DSO) = (AR / Revenue) × 365
- Days Inventory Held (DIH)
- Days Payable Outstanding (DPO)
- Cash Conversion Cycle = DSO + DIH – DPO
- Gross Margin = Gross Profit / Revenue
- Operating Margin = EBIT / Revenue
- Net Margin = Net Income / Revenue
- Return on Assets (ROA) = Net Income / Total Assets
- Return on Equity (ROE) = Net Income / Shareholders’ Equity
- DuPont Analysis (ROE = Net Margin × Asset Turnover × Equity Multiplier)
- Earnings Per Share (EPS) = Net Income / Shares Outstanding
- Debt-to-Equity (D/E) Ratio
- Interest Coverage Ratio = EBIT / Interest Expense
- Leverage (Financial Gearing)
- Free Cash Flow (FCF)
- Price-to-Earnings (P/E) Ratio
- Forward P/E vs. Trailing P/E
- Price-to-Book (P/B) Ratio
- Price-to-Sales (P/S) Ratio
- EV/EBITDA
- EV/Sales
- Dividend Yield = Annual Dividend / Share Price
- Dividend Payout Ratio
- Book Value Per Share
- PEG Ratio (P/E ÷ EPS Growth Rate)
- Discounted Cash Flow (DCF) Analysis
- Terminal Value (Gordon Growth or Exit Multiple)
- Terminal Growth Rate
- WACC (discount rate in DCF)
- Multiples Valuation (Comparable Company Analysis – “Comps”)
- Precedent Transaction Analysis (M&A comps)
- Enterprise Value (EV) = Market Cap + Debt – Cash
- Equity Value = Market Capitalization
- Intrinsic Value
- Sum-of-the-Parts (SOTP) Valuation
- Asset-Based Valuation
- Mergers & Acquisitions (M&A)
- Target Company
- Acquirer (or Buyer)
- Friendly vs. Hostile Takeover
- Tender Offer
- Due Diligence (financial, legal, operational)
- Synergy (cost or revenue)
- Goodwill (purchase price > fair value of net assets)
- Leveraged Buyout (LBO)
- Divestiture / Spin-off / Carve-out
- Earnout
- Break-up Fee
- Go-Shop / No-Shop Clause
- Equity Capital Markets (ECM)
- Debt Capital Markets (DCM)
- Initial Public Offering (IPO)
- Follow-on Offering / Secondary Offering
- Private Placement
- Underwriting (firm commitment vs. best efforts)
- Book Building
- Roadshow
- Lock-up Period
- Syndication (loan or bond)
- Origination (client coverage)
- Structuring (deal design)
- Advisory Services
- Bulge Bracket Investment Banks (e.g., Goldman Sachs, JPMorgan)
- Middle Market Investment Banks
- Boutique Investment Banks (industry- or product-focused)
- Elite Boutiques (e.g., Evercore, Lazard)
- Credit Risk (borrower default)
- Market Risk (price volatility: equities, rates, FX, commodities)
- Liquidity Risk (inability to meet short-term obligations)
- Operational Risk (fraud, systems failure, human error)
- Compliance Risk (regulatory breaches)
- Legal Risk
- Reputational Risk
- Systemic Risk (collapse of entire financial system)
- Sovereign Risk (government default)
- Counterparty Risk (default by trading partner)
- Model Risk (errors in valuation/risk models)
- Central Bank (e.g., Federal Reserve, ECB)
- Reserve Requirement
- Deposit Insurance (e.g., FDIC up to $250k)
- Interest Rate Spread (Net Interest Margin)
- Basel Committee on Banking Supervision (BCBS)
- Basel III / Basel IV (capital, leverage, liquidity rules)
- Capital Adequacy Ratio (CAR)
- Risk-Weighted Assets (RWA)
- Liquidity Coverage Ratio (LCR)
- Net Stable Funding Ratio (NSFR)
- Know Your Customer (KYC)
- Anti-Money Laundering (AML)
- Digital Banking, Online Banking, Mobile Banking
- Challenger Banks (e.g., Chime, Revolut)
- Platform Banking
- Proportionality Principle (tailored regulation by firm size/risk)
- Gross Domestic Product (GDP)
- Real vs. Nominal GDP
- Inflation Rate (CPI, PPI, Core Inflation)
- Unemployment Rate (U-3, U-6)
- Federal Funds Rate (U.S. policy rate)
- Monetary Policy (interest rates, QE, QT)
- Fiscal Policy (government spending & taxation)
- Open Market Operations
- Business Cycle: Expansion, Peak, Contraction, Trough
- Recession (two consecutive quarters of negative GDP)
- Stagflation (high inflation + high unemployment + low growth)
- Deflation (falling prices)
- Hyperinflation
- Yield Curve (normal, flat, inverted)
- Leading Indicators (e.g., stock prices, building permits)
- Coincident Indicators (e.g., industrial production)
- Lagging Indicators (e.g., unemployment duration)
- Supply and Demand
- Elasticity (price, income, cross-price)
- Opportunity Cost
- Marginal Utility
- Utility Maximization
- Perfect Competition
- Monopoly
- Oligopoly
- Monopolistic Competition
- Game Theory (Nash Equilibrium)
- Comparative Advantage
- Absolute Advantage
- Economies of Scale / Diseconomies of Scale
- Market Failure (externalities, public goods, information asymmetry)
- Invisible Hand (Adam Smith)
- Par Value (Face Value)
- Coupon Rate
- Yield to Maturity (YTM)
- Current Yield = Annual Coupon / Market Price
- Accrued Interest
- Clean Price vs. Dirty Price
- Zero-Coupon Bond
- Callable Bond (Call Provision)
- Puttable Bond
- Convertible Bond
- Credit Rating (Moody’s, S&P, Fitch: Investment Grade vs. High Yield)
- Default Risk
- Reinvestment Risk
- Inflation Risk
- Duration (Macaulay Duration)
- Modified Duration ≈ % price change per 1% yield change
- Effective Duration (for bonds with embedded options)
- Convexity (adjusts for curvature in price-yield relationship)
- Price Value of a Basis Point (PVBP) or DV01
- Key Rate Duration (sensitivity to specific maturities)
- Derivative (value derived from underlying)
- Underlying Asset (stock, index, commodity, rate, etc.)
- Futures Contract (standardized, exchange-traded)
- Forward Contract (custom, OTC)
- Options:
- Call Option (right to buy)
- Put Option (right to sell)
- Swaps:
- Interest Rate Swap
- Currency Swap
- Credit Default Swap (CDS)
- Structured Products
- Strike Price (Exercise Price)
- Maturity Date (Expiration)
- American vs. European Exercise
- In-The-Money (ITM), At-The-Money (ATM), Out-Of-The-Money (OTM)
- Intrinsic Value vs. Time Value
- Black-Scholes Model (for European options)
- Binomial Option Pricing Model
- Delta (∂Option Price / ∂Underlying Price)
- Gamma (∂Delta / ∂Underlying Price)
- Vega (∂Option Price / ∂Implied Volatility)
- Theta (∂Option Price / ∂Time)
- Rho (∂Option Price / ∂Interest Rate)
- Hedging (reduce risk exposure)
- Speculation (bet on price movement)
- Arbitrage (risk-free profit from mispricing)
- Covered Call, Protective Put, Straddle, Strangle, Spread Strategies
- Gross Income
- Adjusted Gross Income (AGI)
- Pre-tax Adjustments (e.g., IRA contributions, HSA)
- Standard Deduction vs. Itemized Deductions
- Taxable Income = AGI – Deductions
- Marginal Tax Rate vs. Effective Tax Rate
- Tax Evasion (illegal)
- Tax Avoidance (legal optimization)
- Tax Haven
- Deductible expenses
- Ability-to-Pay Principle
- Benefits Received Principle
- Income Tax (individual & corporate)
- Corporate Tax Rate (statutory vs. effective)
- Capital Gains Tax (short-term vs. long-term)
- Dividend Tax (qualified vs. ordinary)
- Payroll Tax (Social Security, Medicare)
- Estate Tax / Gift Tax
- Alternative Minimum Tax (AMT)
- Withholding Tax
- Transfer Pricing (multinational tax compliance)
- BEPS (Base Erosion and Profit Shifting – OECD initiative)
- Tax Liability
- Tax Loss Harvesting
| Domain | Key Concepts |
|---|---|
| Valuation & Corp Fin | WACC, DCF, FCF, EBITDA, Terminal Value, Multiples |
| M&A & IB | LBO, Synergy, Due Diligence, Precedent Transactions, EV/Equity Value |
| Banking & Risk | Credit Risk, Liquidity Risk, Basel III, KYC/AML, CAR |
| Macro | GDP, Yield Curve, Fed Funds Rate, Inflation, Business Cycle |
| Fixed Income | YTM, Duration, Convexity, Credit Spreads, Callable Bonds |
| Derivatives | Delta, Vega, Futures, Swaps, Options Greeks, Hedging |
| Tax | Capital Gains Tax, Effective Tax Rate, Tax Avoidance, BEPS |
| Accounting | Accruals, Matching Principle, Goodwill, NCI, FCF |
- Gross Income (total income before adjustments)
- Adjusted Gross Income (AGI)
- Pre-tax Adjustments (e.g., retirement contributions, student loan interest)
- Standard Deduction
- Itemized Deductions
- Taxable Income
- Ability-to-Pay Principle
- Benefits Received Principle
- Income Tax (individual and business)
- Corporate Tax
- Capital Gains Tax (profit from asset sales)
- Payroll Tax
- Estate Tax
- Effective Corporate Tax Rate
- Tax Liability
- Compliance issues related to taxation
- WACC (Discount Rate calculation for M&A, Equity Research)
- EBITDA / Free Cash Flow (Proxy for operating cash flow / Intrinsic Valuation input)
- LBO / Acquisition (Investment Banking transaction structure)
- Credit Risk / Liquidity Risk (Banking risk management and Basel III)
- GDP / Yield Curve (Macroeconomic indicators and strategy)
- Modified Duration / Yield to Maturity (Fixed Income interest rate risk)
- Options Delta / Futures Contract (Derivatives risk and hedging)
- AGI / Capital Gains Tax (Tax compliance and M&A structuring)