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Important concepts and topics on finance and financial analysis.

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CAPM illustration

CAPM Formula

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

 internal rate of return in finance

Internal Rate of Return

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

 Corporate Finance Ratios (Summary)

Corporate Finance Ratios

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

Finance Resources

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.

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Learn Finance Online

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.

 

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ROI Formula (Return on Investment)

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...

Leverage Ratios

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...

Cost of 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...

Analysis of Financial Statements

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...

WACC

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...

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