Financial Modeling and Valuation

2.

Foundational Concepts

2.1.

Core Accounting Principles

2.1.1.

The Three Financial Statements

2.1.1.1.

Income Statement

2.1.1.1.1.

Revenue Recognition Principles

2.1.1.1.2.

Expense Recognition Principles

2.1.1.1.3.

Operating vs Non-Operating Items

2.1.1.1.4.

Extraordinary Items

2.1.1.2.

2.1.1.2.1.

Asset Classification

2.1.1.2.2.

Liability Classification

2.1.1.2.3.

Shareholders' Equity Components

2.1.1.2.4.

Working Capital Components

2.1.1.3.

Cash Flow Statement

2.1.1.3.1.

2.1.1.3.2.

Indirect Method

2.1.1.3.3.

Classification of Cash Flows

2.1.2.

Relationship Between the Three Statements

2.1.2.1.

Linking Net Income to Equity

2.1.2.2.

Connecting Net Income to Cash Flow

2.1.2.3.

Balance Sheet Balancing

2.1.2.4.

Integrated Statement Analysis

2.1.3.

Accrual vs Cash Accounting

2.1.3.1.

Timing of Revenue Recognition

2.1.3.2.

Timing of Expense Recognition

2.1.3.3.

Impact on Financial Statements

2.1.3.4.

Reconciliation Methods

2.1.4.

Key Financial Statement Line Items

2.1.4.1.

Revenue Components

2.1.4.2.

Cost of Goods Sold

2.1.4.3.

Operating Expenses

2.1.4.3.1.

Selling, General & Administrative

2.1.4.3.2.

Research & Development

2.1.4.3.3.

Depreciation & Amortization

2.1.4.4.

2.1.4.5.

2.1.4.6.

2.1.4.7.

2.1.4.8.

Non-Current Assets

2.1.4.9.

Current Liabilities

2.1.4.10.

Non-Current Liabilities

2.1.4.11.

Shareholders' Equity

2.1.4.12.

Cash Flow from Operations

2.1.4.13.

Cash Flow from Investing

2.1.4.14.

Cash Flow from Financing

2.2.

Essential Finance Theory

2.2.1.

Time Value of Money

2.2.1.1.

Present Value Concepts

2.2.1.2.

Future Value Concepts

2.2.1.3.

Discount Rate Determination

2.2.1.4.

Compounding and Discounting

2.2.1.5.

Annuities and Perpetuities

2.2.2.

Risk and Return

2.2.2.1.

2.2.2.1.1.

Systematic Risk

2.2.2.1.2.

Unsystematic Risk

2.2.2.1.3.

2.2.2.1.4.

2.2.2.2.

Risk-Return Tradeoff

2.2.2.3.

Diversification Benefits

2.2.2.4.

Risk Measurement

2.2.3.

Cost of Capital

2.2.3.1.

Weighted Average Cost of Capital

2.2.3.2.

2.2.3.2.1.

Capital Asset Pricing Model

2.2.3.2.2.

Dividend Growth Model

2.2.3.3.

2.2.3.3.1.

Pre-Tax Cost of Debt

2.2.3.3.2.

After-Tax Cost of Debt

2.2.3.4.

Optimal Capital Structure

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