1. Time Value of Money (TVM) 💰
Money today is worth more than money in the future!
Future Value: FV = PV × (1 + r)ⁿ
Present Value: PV = FV / (1 + r)ⁿ
Where: r = interest rate, n = number of periods
2. Financial Ratios 📊
Liquidity Ratios
- Current Ratio = CA / CL
- Quick Ratio = (CA - Inv) / CL
Profitability Ratios
- Gross Margin = GP / Sales
- Net Margin = NI / Sales
- ROE = NI / Equity
3. Capital Budgeting 🏗️
NPV (Net Present Value)
Accept if NPV > 0
IRR (Internal Rate of Return)
Accept if IRR > Required return
Payback Period
Time to recover initial investment