CFA resources

Investment analysis, valuation and portfolio management

• Building a financial analyst work sample

  Create an original research note that shows inputs, assumptions and reasoning.

  Careers

• Showing evidence and assumptions in a finance work sample

  Separate observed facts, model assumptions and conclusions in a project note.

  Careers

• Building a financial risk analyst work sample

  Produce a model note with inputs, sensitivity and limitations.

  Careers

• Simple and effective annualized trade-credit costs

  Compare distinct rate conventions before comparing financing alternatives.

  Comparisons

• Bondholder and shareholder engagement: different instruments, different levers

  Compare the role of equity rights and debt terms in an issuer dialogue.

  Comparisons

• Discrete and continuous compounding conventions

  Compare mathematical growth factors without treating a benchmark as an investment product.

  Comparisons

• Mutually exclusive and independent events

  Use joint probabilities to distinguish non-overlap from independence, including the zero-probability edge case.

  Comparisons

• IFRS S1 and GRI: different materiality questions

  Distinguish sustainability-related financial information from significant impact reporting.

  Comparisons

• Interest coverage and cash payment capacity

  Distinguish an earnings-based quotient from the timing of cash available for a payment.

  Comparisons

• Current, quick and cash ratios: comparing the numerators

  Identify which current assets enter each stated measure.

  Comparisons

• Operating cycle and cash conversion cycle

  Distinguish the operating clocks from the net clock after supplier-payment timing.

  Comparisons

• Negative screening and best-in-class selection

  Compare a prohibited-activity rule with a within-sector ranking hurdle.

  Comparisons

• Net working capital and current ratio

  Separate an amount difference from a relative balance-sheet measure.

  Comparisons

• Conditional and joint probability: different denominators

  Distinguish the share of all outcomes from the share within a conditioning event.

  Concepts

• A level perpetuity and its convergence condition

  Use the infinite-stream formula only with the required timing and positive discount rate.

  Concepts

• Loss given default: understanding conditional severity

  Distinguish LGD, recovery and expected loss in a simple credit example.

  Concepts

• Macaulay duration: the present-value-weighted payment time

  Understand duration as a weighted average of cash-flow arrival times.

  Concepts

• MOIC: investment value relative to contributed capital

  Understand a value multiple and why it does not describe timing.

  Concepts

• Discounting with a negative periodic rate

  Explain why a future fixed payment can have a present value above its amount.

  Concepts

• Prior, likelihood and posterior probability

  Identify the probability before evidence, the evidence model and the probability after conditioning.

  Concepts

• Retained earnings and cash are different balances

  Distinguish an accumulated equity component from a liquid asset.

  Concepts

• Uncorrelated does not always mean independent

  Use a finite non-linear model to show zero covariance alongside dependence.

  Concepts

• Universal owners and market-wide risk

  Understand why a diversified investor may examine effects beyond one holding.

  Concepts

• Random variables, outcomes and events

  Distinguish a model scenario, a numerical return mapping and an event set.

  Concepts

• Accounting equation: assets, liabilities and equity

  Read the accounting equation: assets, liabilities and equity formula, variables and scope.

  Formulas

• Annuity-due values at a common date

  Use the annuity-due values at a common date relationship with its timing and rate conditions.

  Formulas

• Cash conversion cycle from its three components

  Use the cash conversion cycle from its three components relationship with explicit definitions.

  Formulas

• Cash ratio including short-term marketable securities

  Read the cash ratio including short-term marketable securities formula, variables and scope.

  Formulas

• Common-size balance-sheet percentage

  Read the common-size balance-sheet percentage formula, variables and scope.

  Formulas

• Continuous-compounding value of a single amount

  Use the continuous-compounding value of a single amount relationship with its timing and rate conditions.

  Formulas

• Correlation from covariance and standard deviations

  Use matching units and positive standard deviations in the Pearson-correlation formula.

  Formulas

• Current ratio: current assets divided by current liabilities

  Read the current ratio: current assets divided by current liabilities formula, variables and scope.

  Formulas

• Days of inventory on hand

  Use the days of inventory on hand relationship with explicit definitions.

  Formulas

• Days payable outstanding with an explicit purchases flow

  Use the days payable outstanding with an explicit purchases flow relationship with explicit definitions.

  Formulas

• Days sales outstanding and the sales denominator

  Use the days sales outstanding and the sales denominator relationship with explicit definitions.

  Formulas

• Debt-to-assets ratio with a matching denominator

  Read the debt-to-assets ratio with a matching denominator formula, variables and scope.

  Formulas

• Debt-to-equity ratio and its debt definition

  Read the debt-to-equity ratio and its debt definition formula, variables and scope.

  Formulas

• Basic economic order quantity

  Use the basic economic order quantity relationship with explicit definitions.

  Formulas

• Effective annual rate from a nominal quotation

  Use the effective annual rate from a nominal quotation relationship with its timing and rate conditions.

  Formulas

• Effective rate for a shorter or longer interval

  Use the effective rate for a shorter or longer interval relationship with its timing and rate conditions.

  Formulas