The Capital Asset Pricing Model (CAPM) is used to price securities based on their level of risk. Higher risk securities have higher returns.

The Internal Rate of Return (IRR) is the ultimate measure of economic returns in finance and used extensively in financial modeling.

Corporate Finance ratios are used to evaluate the performance, efficiency, and profitability of a business.

CFI has completed *hundreds* of articles and guides on important finance topics that all financial analysts should know. If you’re looking to advance your career and become a world-class financial analyst, this library is a great place to get started. Learn at your own pace by reading the guides, which include step-by-step, examples, and templates.

This resources library is designed to help you learn finance online. Each article can stand on its own, and you can read through them in whatever order you please. By making your way through these resources you’ll learn the important skills every financial analyst needs to excel on the job.

What is Return on Investment (ROI)? Return on investment (ROI) is a financial ratio used to calculate the benefit an investor will receive in relation to their investment cost. It is most commonly measured as net income divided by the original capital cost of the investment. The higher the ratio, the greater the benefit earned. This...

What are leverage ratios? A leverage ratio is any kind of financial ratio that indicates the level of debt incurred by a business entity against several other accounts in its balance sheet, income statement, or cash flow statement. These ratios provide an indication of how the company’s assets and business operations are financed (using debt...

What is Cost of Debt? The cost of debt is the return that a company provides to its debtholders and creditors. These capital providers need to be compensated for any risk exposure that comes with lending to a company. Since observable interest rates play a big role in quantifying the cost of debt, it is relatively...

Guide to financial statement analysis The main task of an analyst is to perform an extensive analysis of financial statements. In this free guide, we will break down the most important methods, types, and approaches to financial analysis. This guide is designed to be useful for both beginners and advanced finance professionals, with the main...

Definition of WACC A firm’s Weighted Average Cost of Capital (WACC) represents its blended cost of capital across all sources, including common shares, preferred shares, and debt. The cost of each type of capital is weighted by its percentage of total capital and they are added together. This guide will provide a detailed breakdown of what...

- 2008-2009 Global Financial Crisis
- Accelerated Dividend
- Accounts Receivable to Sales Ratio
- Acid-Test Ratio
- Acquirer
- Activist Shareholder
- Adjusted Funds From Operations (AFFO)
- Advertising to Sales Ratio
- After Tax Operating Income (ATOI)
- Agency Costs
- All Risks Yield (ARY)
- Alpha
- Alternative Investment
- Amalgamation
- Analysis of Financial Statements
- Angel Investor
- Annual Percentage Rate (APR)
- Annual Percentage Yield
- Annuity
- Antitrust Acts
- Appraisal
- Arbitrage Pricing Theory
- Arrears
- Asset Base
- Asset Management
- Asset Turnover
- Asset Turnover Ratio
- Asset Valuation
- Asset-Based Loans
- Asymmetric Information
- Auction
- Authorized Shares
- Automatic Conversion Clause
- Back Charge
- Balanced Scorecard
- Bank Account Overdraft
- Bank for International Settlements (BIS)
- Bank Line
- Bank's Business Segments
- Bank-Specific Ratios
- Banking Fundamentals
- Barbell Strategy
- Basel I
- Basel II
- Basel III
- Basis Point (Beep)
- Basis Points (BPS)
- Behavioral Finance Glossary
- Best Finance Podcasts for 2020
- Best Personal Finance Software
- Beta Coefficient
- Beyond Budgeting
- Binomial Interest Rate Tree
- Black Swan Event
- Bond Tranches
- Bottom-up Budgeting
- Break-even Point (BEP)
- Bretton Woods Agreement
- Bridge Loan
- Budget Variance
- Budgetary Slack
- Budgeting
- Bullet Loan
- Bullish and Bearish
- Business Banking
- Business Life Cycle
- Business Risk
- CAGR
- Calculating Foreign Exchange Spread
- Calculating Yield on Debt
- CAMELS Rating System
- Canadian Income Tax Brackets
- CAPE Ratio
- CAPEX to Operating Cash Ratio
- Capital
- Capital Adequacy Ratio (CAR)
- Capital Allocation Line (CAL) and Optimal Portfolio
- Capital Asset Pricing Model (CAPM)
- Capital Budgeting Best Practices
- Capital Employed
- Capital Gain
- Capital Gains Tax
- Capital Gains Yield
- Capital Rationing
- Capital Structure
- Carry Benefits
- Cash Consideration
- Cash Conversion Ratio
- Cash Credit
- Cash Earnings Per Share
- Cash Flow
- Cash Flow Available For Debt Service (CFADS)
- Cash Flow to Debt Ratio
- Cash on Cash Return
- Cash Ratio
- Cash Reserves
- Cash Sweep
- Cash Turnover Ratio (CTR)
- CCPPO Shares
- Celler-Kefauver Act
- Checking Account
- Checking Accounts vs Savings Accounts
- Chinese Wall
- Clawback
- Clayton Antitrust Act
- Collateral
- Commercial Bank
- Commercial Loan Agreement
- Commitment Fee
- Commodity Swap
- Common Size Analysis
- Common Size Ratio
- Common Stock
- Company Bylaws
- Compound Growth Rate
- Compound Interest
- Compound Interest Formula
- Confidence Interval
- Constant Dividend Payout Ratio Policy
- Continuously Compounded Interest
- Continuously Compounded Return
- Contract for Difference (CFD)
- Contribution Analysis
- Contribution Margin Ratio
- Conventional Cash Flow
- Corporate Banking
- Corporate Bonds
- Corporate Finance Overview
- Corporate Finance Ratios
- Corporate Structure
- Corporate Venturing
- Corporation
- Correlation
- Cost of Capital
- Cost of Debt
- Cost of Equity
- Cost of Preferred Stock
- Cost of Production
- Cost Structure
- Coupon Rate
- Covariance
- Coverage Ratio
- Credit Analysis
- Credit Analysis Ratios
- Credit Card Asset-Backed Securities (ABS)
- Credit Default Swap
- Credit Event
- Credit Memorandum
- Credit Rating
- Credit Risk
- Credit Score
- Credit Union
- Credit-Market Debt to Disposable Income Ratio
- Cross Guarantee
- Cumulative Dividend
- Currency Swap Contract
- Current Ratio Formula
- CVP Analysis Guide
- Debenture
- Debt
- Debt Capacity
- Debt Covenants
- Debt Default
- Debt Issuance Fees
- Debt Refinancing
- Debt Restructuring
- Debt Service Coverage Ratio
- Debt Service Reserve Account (DSRA)
- Debt Settlement
- Debt to Asset Ratio
- Debt to Assets Ratio
- Debt to Equity Ratio
- Debt vs Equity Financing
- Debt-to-Income Ratio
- Debt/EBITDA Ratio
- Debtor vs. Creditor
- Default Risk Premium
- Defensive Interval Ratio
- Degree of Financial Leverage
- Degree of Operating Leverage
- Degree of Total Leverage
- Delinquency Rate
- Deutsche Bank Restructuring
- Direct Listing
- Discount Rate
- Discounted Payback Period
- Distressed Debt
- Divestiture
- Dividend
- Dividend Coverage Ratio
- Dividend Growth Rate
- Dividend Payout Ratio
- Dividend Per Share (DPS)
- Dividend Reinvestment Plan (DRIP)
- Dividend vs Share Buyback/Repurchase
- Dividend Yield Formula
- Dodd-Frank Act
- Double Gearing
- DRIP
- Dry Powder
- DuPont Analysis
- Duration
- Dutch Auction
- Earnings Call
- Earnings Guidance
- Earnings Per Share (EPS)
- Earnings Per Share Formula (EPS)
- Earnings Season
- Earnings Volatility
- EBIAT
- EBIT Guide
- EBIT vs EBITDA
- EBITDA
- EBITDA Margin
- EBITDAL
- EBITDARM
- Economic Moat
- Effective Annual Interest Rate
- Effective Annual Rate
- Efficiency Ratios
- English Auction
- Entry Multiple
- Envy Ratio
- EOQ
- Equity
- Equity
- Equity Capital Market (ECM)
- Equity Crowdfunding
- Equity Multiplier
- Equity Ratio
- Equity Risk Premium
- Equity Swap Contract
- Equity vs Fixed Income
- Equivalent Annual Annuity (EAA)
- Ethical Banking
- EV/Gross Profit Ratio
- Exit Multiple
- Expense Ratio
- Expression of Interest (EOI)
- Fair Value
- Fama-French Three-Factor Model
- Famous Fund Managers
- Famous Investors
- FCFF vs FCFE vs Dividends
- Federal Funds Rate
- Federal Reserve (the Fed)
- FHA Loan
- FICO Score
- Fidelity Bonds
- Finance Definition
- Finance Overview
- Financial Analysis Ratios Glossary
- Financial Controls
- Financial Covenants
- Financial Intermediary
- Financial Leverage
- Financial Math Glossary
- Financial Modelers’ Manifesto
- Financial Ratios
- Financial Stability Board (FSB)
- Financing
- Fisher Equation
- Fixed Asset Turnover
- Fixed Assets
- Fixed Income Bond Terms
- Fixed Income Interest Rate Risk
- Fixed Income Risks
- Fixed vs. Pegged Exchange Rates
- Fixed-Charge Coverage Ratio (FCCR)
- Flash Crashes
- Floating Interest Rate
- Flotation Costs
- Forced Sale Value
- Forecasting
- Foreign Exchange
- Foreign Exchange Reserves
- Forward Contract
- Forward Dividend Yield
- Forward Rate
- Founders Stock
- Fractional Banking
- Funding Liquidity Risk
- Futures and Forwards
- Futures Contract
- Gearing
- Glass-Steagall Act
- Going Concern
- Goodwill to Assets Ratio
- Gross Gaming Revenue (GGR)
- Gross Margin Ratio
- Gross Merchandise Value (GMV)
- Growth Capex
- Guarantee
- H-Model
- Haircut
- Hart-Scott-Rodino Act
- Head of Household
- Hedge Fund Strategies
- Herfindahl-Hirschman Index (HHI)
- High Low Method vs. Regression Analysis
- Hockey Stick Effect
- Home Equity Line of Credit (HELOC)
- How to Calculate Debt Service Coverage Ratio
- How to Calculate FCFE from EBIT?

- Hurdle Rate Definition
- Idle Cash
- Important Dividend Dates
- Imposed Budgeting
- Income
- Income Tax Payable
- Incremental Budgeting
- Incurred
- Infinite Banking – Becoming Your Own Banker
- Information Ratio
- Initial Outlay Calculation
- Insolvency
- Intercreditor Agreement
- Interest Coverage Ratio
- Interest Income
- Interest Rate
- Interest Rate Parity (IRP)
- Interest Rate Risk
- Interest Rate Swap
- Interest Tax Shields
- Internal Rate of Return (IRR)
- International Bank Account Number (IBAN)
- International Bonds
- Inventory Turnover
- Inventory Turnover Ratio
- Inverted Yield Curve
- Invested Capital
- Investing in Stocks With Dividends vs Stocks Without Dividends
- Investment Methods
- Investor Influence
- IPO Process
- Irrevocable Proxy
- Islamic Finance
- Junior Tranche
- Justified Price to Earnings Ratio
- Key Performance Indicators (KPIs)
- LBO Buy-Side
- Lehman Brothers
- Lender of Last Resort
- Letter of Guarantee
- Levelized Cost of Energy (LCOE)
- Leverage
- Leverage Effect Measures
- Leverage Ratios
- Leveraged Buyout (LBO)
- Leveraged Finance
- Leveraged Loan
- Liability
- Libra Cryptocurrency
- Life and Health Insurers
- Life Cycle Cost Analysis
- Limitations of Ratio Analysis
- Liquid Asset
- Liquidating Dividend
- Liquidity
- Liquidity Event
- Liquidity Premium
- Loan
- Loan Covenant
- Loan Life Coverage Ratio (LLCR)
- Loan Servicing
- Loan-to-Value Ratio
- Long Term Debt
- Look-Ahead Bias
- LTM (Last Twelve Months)
- LTM Revenue
- M&M Theorem
- Macrofinance
- Major Risks for Banks
- Management Buyout (MBO)
- Management Expense Ratio (MER)
- Managerial Finance
- Margin of Safety Formula
- Market Capitalization
- Market Risk Premium
- Market Value of Debt
- Market Value vs Investment Value
- Marketable Securities
- Material Nonpublic Information
- Media for Equity
- Metal Royalty and Streams
- Mezzanine Fund
- MIBOR (Mumbai Inter-Bank Offered Rate)
- MiFID II
- Minority Interest
- MJSD
- Model Audit
- Modified Internal Rate of Return (MIRR)
- Monetary Assets
- Money vs. Time-Weighted Return
- Mortgage
- Mortgage Bank
- Mosaic Theory
- NCREIF
- Negative Correlation
- Negotiable
- Negotiated Budgeting
- Net Asset Value
- Net Debt
- Net Profit Margin
- Net Working Capital
- Netback
- Non Cash Expenses
- Non-Operating Assets
- Non-Performing Asset
- Non-Recourse Loan
- Non-Recourse vs. Recourse Loans
- Normalization
- Oil and Gas Company Balance Sheets
- One-Period Dividend Discount Model
- Online Payment Companies
- Operating Asset Turnover Ratio
- Operating Cash Flow Ratio
- Operating Cash to Debt Ratio
- Operating Cash to Total Cash Ratio
- Operating Profit Margin
- Operating Ratio
- Operating Return on Assets (OROA)
- Original Issue Discount
- Output/Input Budgeting
- Outstanding Shares
- Overnight Rate
- P/AFFO
- P/FFO
- P/FFO vs P/AFFO
- Participative Budgeting
- Payment Processing Fees
- Pecking Order Theory
- Peer-to-Peer Lending
- Perpetuity
- Personal Finance
- PIK Loan
- Portfolio Variance
- PRAT Model
- Preferred Shares
- Prepayment
- Prepayment Risk
- Pretax Margin Ratio
- Price Indices
- Price-to-Cash Flow Ratio
- Prime Rate
- Principal Payment
- Private Company
- Private Money Loan
- Private REITs vs Publicly Traded REITs
- Private vs Public Company
- Privately Held Company
- Pro-Rata Right
- Proceeds
- Professional Corporations
- Profit Before Tax (PBT)
- Profit vs Cash
- Profitability Ratios
- Project Budget
- Project Finance - A Primer
- Project Sequencing
- Property and Casualty Insurers
- Provisions
- Proxy Fight
- Proxy Vote
- Public Companies
- Public Finance
- Public Securities
- Put-Call Parity
- Quantitative Analysis
- Quantitative Finance
- Quick Assets
- Quick Ratio
- Rate of Return
- Rating Agency
- Ratio Analysis
- Real Estate
- Real Estate Investment Trust (REIT)
- Real Estate Project Finance
- Recapitalization
- Recourse Loan (Debt)
- Recovery Rate
- Redemption Rights Clause
- Redundant Assets
- Registration Rights
- Regression Analysis
- Regulatory Risk
- Reinsurance Companies
- Reserve Fund
- Reserve Ratio
- Residential Properties REITs
- Residual Dividend Policy
- Restricted Cash
- Restricted Stock
- Retail Bank Types
- Retention Ratio
- Return on Assets & ROA Formula
- Return on Capital Employed (ROCE)
- Return on Common Equity
- Return on Equity (ROE)
- Return on Invested Capital
- Return on Investment (ROI)
- Return on Net Assets (RONA)
- Return on Total Capital
- Revenue Per Employee
- Revenue Run Rate
- Revolver Debt
- Revolving Credit Facility
- Revolving Debt
- Rights Issue
- Risk
- Risk Averse Definition
- Risk Aversion
- Risk-Adjusted Return Ratios
- Risk-Free Rate
- Risk-Weighted Assets
- ROAS (Return on Ad Spend)
- ROI Formula (Return on Investment)
- ROIC
- ROIC vs ROCE
- Rolling Down the Yield Curve
- S&P - Standard and Poor's
- Savings Account
- Schedule A
- Secondary Market
- Security
- Segment Margin
- Seller’s Discretionary Earnings
- Senior and Subordinated Debt
- Senior Debt
- Senior Term Debt
- Shadow Inventory
- Share Repurchase
- Shareholder
- Shareholder Base
- Shareholder Yield
- Sharpe Ratio
- Sherman Antitrust Act
- Short Term Loan
- Simple Capital Structure
- Simple Interest
- Simple Interest vs Compound Interest
- Sinking Fund
- Solvency
- Special Dividend
- Special Drawing Rights (SDR)
- Spin-Off
- Stable Dividend Policy
- Stakeholder
- Stakeholder vs Shareholder
- Statement of Retained Earnings
- Stock
- Stock Dividend
- Stock Exchange
- Stock Option
- Stock Split
- Stock Warrants
- Structured Finance
- Subsidiary
- Supermajority Voting Provision
- Sustainable Growth Rate
- Swap Rate
- Swap Rate Curve
- Swap Spread
- SWORD Financing
- Syndicated Loan
- Systematic Risk
- Systemic Risk
- Targeted Auction
- Tax Deductible
- Tax Shelter
- Taxable Income
- Temporal Method
- The S&P Sectors
- Three Mistakes Companies Make That Can Lead To Ruin
- Throughput
- Time Series Data Analysis
- Times Interest Earned
- Times Interest Earned (Cash Basis)
- Tone at the Top
- Top-Down Budgeting
- Total Return Swap
- Treasury Stock
- Treynor Ratio
- Trust Bank
- Types of Financial Analysis
- Unconventional Cash Flow
- Underwriting
- Unicorn
- Uniform Rules for Collections (URC)
- Unitranche Debt
- Use of Proceeds Statement
- Value Added
- Variance Formula
- Vendor Financing
- Venture Capital
- Venture Debt
- Volcker Rule
- WACC
- Wall Street
- Weighted Average Shares Outstanding
- What is Revolving Debt - Guide and Explanation
- Williams Act
- Yield
- Yield Curve
- Yield Gap
- Yield to Maturity (YTM)
- YoY (Year over Year)