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BUS202CC BY 3.0

Principles of Finance

A full university course on corporate finance: time value of money, risk and return, capital budgeting, cost of capital and capital structure. The most complete free treatment of the theory behind valuation that we could find under a licence permitting reuse.

319 chapters · 201,709 words · readable here

How it fits here. This is the course to take after our fundamental-analysis chapters if you want the theory underneath them. It does not mention NEPSE, Nepali tax or the rules a Nepali investor trades under — read it for the reasoning and apply it with our chapters alongside.

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Unit 1: Introduction to Finance

  1. Defining Finance469 words
  2. Comparing the Fields of Finance, Economics, and Accounting424 words
  3. Role of Finance in an Organization576 words
  4. Types of Financial Decisions: Investment and Financing613 words
  5. Functions of Corporate Finance533 words
  6. Overview of the Role of Financial Manager572 words
  7. Reasons to Study Finance534 words
  8. Valuation538 words
  9. Maximizing Shareholder and Market Value580 words
  10. Maximizing Value Without Harming Stakeholders616 words
  11. Overview of Organizational Structure989 words
  12. Pros and Cons of Sole Proprietorship392 words
  13. Pros and Cons of a Partnership472 words
  14. Pros and Cons of a Corporation629 words
  15. Defining Corporate Governance1,061 words
  16. The Sarbanes–Oxley Act of 2002966 words
  17. Ethics and Finance212 words
  18. Ethics Foundations874 words
  19. Ethics in Finance412 words
  20. Ethics in Management615 words
  21. International Considerations423 words
  22. The Bigger Picture238 words
  23. End-of-Chapter Exercises355 words
  24. Defining Agency Conflicts706 words
  25. Managers, Shareholders, and Bondholders447 words
  26. Conflicts Between Managers and Shareholders557 words
  27. Conflicts of Interest Between Shareholders and Bondholders498 words
  28. Defining the Financial Statement556 words
  29. Uses of the Financial Statement410 words
  30. Limitations of Financial Statements660 words
  31. Elements of the Income Statement872 words
  32. Limitations of the Income Statement596 words
  33. Effects of GAAP on the Income Statement495 words
  34. Noncash Items501 words
  35. Assets863 words
  36. Liabilities and Equity582 words
  37. Working Capital558 words
  38. Liquidity531 words
  39. Debt to Equity467 words
  40. Market Value vs. Book Value480 words
  41. Limitations of the Balance Sheet563 words

Unit 2: Financial Statements and Financial Analysis

  1. Financial Statements: the "Financial Story"668 words
  2. Budgeting vs. Accounting919 words
  3. The Fundamental Equation of Accounting963 words
  4. The Basic Financial Statements1,437 words
  5. The Statement of Financial Position2,467 words
  6. Statement of Cash Flows2,077 words
  7. Statement of Activities1,751 words
  8. Statement of Functional Expenses543 words
  9. Basic Financial Statements – State and Local Governments164 words
  10. Government-wide Statements142 words
  11. Statement of Net Position2,043 words
  12. Statement of Activities1,201 words
  13. The Fund Statements200 words
  14. Governmental Fund Statements1,776 words
  15. Statement of Revenues, Expenditures, and Changes in Fund Balance713 words
  16. Statement of Net Position483 words
  17. Statement of Revenues, Expenses, and Changes in Net Position195 words
  18. Fiduciary Funds Statements548 words
  19. Corporate Taxes884 words
  20. Tax Deductions728 words
  21. Depreciation806 words
  22. Individual Taxes964 words
  23. Cash Flow from Operations584 words
  24. Cash Flow from Investing424 words
  25. Cash Flow from Financing414 words
  26. Interpreting Overall Cash Flow1,030 words
  27. The Statement of Equity731 words
  28. Depreciation612 words
  29. Free Cash Flow446 words
  30. Market Value Added (MVA) and Economic Value Added (EVA)461 words
  31. Balance Sheets941 words
  32. Income Statements881 words
  33. Evaluating Financial Statements599 words
  34. Industry Comparisons627 words
  35. Benchmarking450 words
  36. Trend Analysis451 words
  37. Limitations of Financial Statement Analysis567 words
  38. Operating Margin387 words
  39. Profit Margin407 words
  40. Return on Total Assets468 words
  41. Basic Earning Power (BEP) Ratio440 words
  42. Return on Common Equity497 words
  43. Inventory Turnover Ratio644 words
  44. Days Sales Outstanding620 words
  45. Fixed Assets Turnover Ratio630 words
  46. Total Assets Turnover Ratio498 words
  47. Current Ratio668 words
  48. Quick Ratio (Acid-Test Ratio)472 words

Unit 3: Time Value of Money

  1. Total Debt to Total Assets431 words
  2. Times-Interest-Earned Ratio451 words
  3. Price/Earnings Ratio982 words
  4. Market/Book Ratio433 words
  5. The DuPont Equation717 words
  6. ROE and Potential Limitations433 words
  7. Assessing Internal Growth and Sustainability669 words
  8. Dividend Payments and Earnings Retention659 words
  9. Relationships between ROA, ROE, and Growth660 words
  10. Sales Forecast Input822 words
  11. Inputs to the Production Schedule865 words
  12. Inputs to COGS644 words
  13. Other Expenses738 words
  14. Pro Forma Income Statement939 words
  15. Pro Forma Balance Sheet752 words
  16. Balance Sheet Analysis938 words
  17. Receipts518 words
  18. Payments500 words
  19. The Forecast Budget623 words
  20. Ratio Analysis and EPS867 words
  21. Impacts of Forecasting on a Business680 words
  22. Regression Analysis for Forecast Improvement869 words
  23. Impact of Modifying Inputs on Business Operations598 words
  24. Defining the Time Value of Money532 words
  25. Importance of the Time Value of Money549 words
  26. Single-Period Investment433 words
  27. Multi-Period Investment555 words
  28. Calculating Future Value481 words
  29. Approaches to Calculating Future Value658 words

Unit 4: Stocks, Bonds, and Financial Markets

  1. Single-Period Investment483 words
  2. Multi-Period Investment488 words
  3. The Discount Rate539 words
  4. Number of Periods390 words
  5. Calculating Present Value442 words
  6. The Relationship Between Present and Future Value485 words
  7. Calculating Perpetuities350 words
  8. Calculating Values for Different Durations of Compounding Periods808 words
  9. Comparing Interest Rates555 words
  10. Calculating Values for Fractional Time Periods602 words
  11. Loans and Loan Amortization604 words
  12. Annuities437 words
  13. Future Value of Annuity468 words
  14. Present Value of Annuity826 words
  15. Calculating Annuities558 words
  16. Calculating the Yield of a Single-Period Investment725 words
  17. Calculating the Yield of an Annuity539 words
  18. Ownership Nature of Stock431 words
  19. Control and Preemption436 words
  20. Common Stock457 words
  21. Preferred Stock428 words
  22. Claim to Income468 words
  23. Voting Rights526 words
  24. Purchasing New Shares429 words
  25. Preferred Stock Rules and Rights418 words
  26. Provisions of Preferred Stock487 words
  27. Comparing Common Stock, Preferred Stock, and Debt507 words
  28. Market Actors1,001 words
  29. New York Stock Exchange (NYSE)629 words
  30. NASDAQ Stock Market500 words
  31. Market Reporting522 words
  32. Expected Dividends, No Growth432 words
  33. Expected Dividends and Constant Growth583 words
  34. Relationship Between Dividend Payments and the Growth Rate418 words
  35. Understanding Future Stock Value979 words
  36. Valuing Nonconstant Growth Dividends566 words

Unit 5: Risk, Return, and the CAPM

  1. Understanding the Cost of Money498 words
  2. Interest Rate Levels490 words
  3. Drivers of Market Interest Rates640 words
  4. The Term Structure748 words
  5. The Yield Curve1,038 words
  6. Using the Yield Curve to Estimate Interest Rates in the Future683 words
  7. Macroeconomic Factors Influencing the Interest Rate730 words
  8. Par Value555 words
  9. Coupon Interest Rate475 words
  10. Maturity Date464 words
  11. Call Provisions737 words
  12. Sinking Funds631 words
  13. Other Features770 words
  14. The Nature of Bonds599 words
  15. Duration870 words
  16. Indenture522 words
  17. Ratings577 words
  18. Advantages of Bonds734 words
  19. Disadvantages of Bonds818 words
  20. Government Bonds624 words
  21. Zero-Coupon Bonds570 words
  22. Floating-Rate Bonds599 words
  23. Other Types of Bonds1,358 words
  24. Purchase Process452 words
  25. Price Transparency512 words
  26. Present Value of Payments413 words
  27. Par Value at Maturity403 words
  28. Yield to Maturity681 words
  29. Inflation Premium494 words
  30. Differences Between Real and Nominal Rates435 words
  31. Time to Maturity627 words
  32. Calculating Yield to Maturity Using the Bond Price508 words
  33. Impact of Payment Frequency on Bond Prices465 words
  34. Deciding to Refund Bonds369 words
  35. Price Risk521 words
  36. Reinvestment Risk371 words
  37. Comparing Price Risk and Reinvestment Risk442 words
  38. Default Risk555 words
  39. Bond Rating System498 words
  40. Bankruptcy and Bond Value442 words

Unit 6: Capital Budgeting Techniques

  1. Types of Stock Market Transactions1,010 words
  2. Types of Market Organizations976 words
  3. Reporting671 words
  4. Dollar Returns414 words
  5. Percentage Returns523 words
  6. Historical Returns: Market Variability and Volatility460 words
  7. Calculating and Understanding Average Returns565 words
  8. Behavior of an Efficient Market575 words
  9. The Efficient Market Hypothesis714 words
  10. Implications and Limitations of the Efficient Market Hypothesis951 words
  11. Securities Act of 19331,054 words
  12. Securities Exchange Act of 1934974 words
  13. Securities Acts Amendments of 1975827 words
  14. Sarbanes–Oxley Act of 2002978 words
  15. Global Research Settlement601 words
  16. Expected Return915 words
  17. Variance980 words
  18. Risks Involved in Capital Budgeting602 words
  19. Risk Aversion579 words
  20. Approaches to Assessing Risk740 words
  21. Types of Risk672 words
  22. Measuring Risk708 words
  23. Portfolio Diversification and Weighting491 words
  24. Implications for Expected Returns590 words
  25. Implications for Variance550 words
  26. Impact of Diversification on Risk and Return: Unsystematic Risk607 words
  27. Impact of Diversification on Risk and Return: Systematic Risk486 words

Unit 7: Corporate Capital Structure

  1. Surprises and Returns531 words
  2. Announcements, News, and Returns677 words
  3. Calculating Expected Portfolio Returns403 words
  4. Portfolio Risk890 words
  5. Beta Coefficient for Portfolios574 words
  6. Expected Risk and Risk Premium704 words
  7. Defining the Security Market Line655 words
  8. Impact of the SML on the Cost of Capital438 words
  9. The Capital Asset Pricing Model575 words
  10. The SML Approach382 words
  11. Discounted Cash Flow Approach641 words
  12. The Bond Yield Plus Risk Premium Approach511 words
  13. Defining Capital Budgeting961 words
  14. The Goals of Capital Budgeting629 words
  15. Accounting Flows and Cash Flows599 words
  16. Ranking Investment Proposals846 words
  17. Reinvestment Assumptions729 words
  18. Long-Term vs. Short-Term Financing934 words
  19. Defining NPV467 words
  20. Calculating the NPV524 words
  21. Interpreting the NPV399 words
  22. Advantages of the NPV method370 words
  23. Disadvantages of the NPV method374 words
  24. NPV Profiles410 words
  25. Defining the Internal Rate of Return (IRR)403 words
  26. Calculating the IRR414 words
  27. Advantages of the IRR Method416 words
  28. Disadvantages of the IRR Method501 words
  29. Multiple IRRs545 words
  30. Modified IRR555 words
  31. Defining the Payback Method473 words
  32. Calculating the Payback Period532 words
  33. Discounted Payback528 words
  34. Advantages of the Payback Method510 words
  35. Disadvantages of the Payback Method447 words
  36. Cash Flow Factors541 words
  37. Replacement Projects538 words
  38. Sunk Costs355 words
  39. Opportunity Costs535 words
  40. Externalities561 words
  41. Tax Rate572 words
  42. Depreciation509 words
  43. Elective Expensing450 words

Unit 8: Working Capital Management

  1. Optimal Capital Structure Considerations725 words
  2. Tax Considerations552 words
  3. Cost of Capital Considerations501 words
  4. The Marginal Cost of Capital446 words
  5. Trade-Off Consideration526 words
  6. Signaling Consideration537 words
  7. Constraint on Managers383 words
  8. Pecking Order424 words
  9. Window of Opportunity379 words
  10. Bankruptcy Considerations502 words
  11. What Is the Cost of Capital?334 words
  12. Cost of Debt478 words
  13. Cost of Preferred Stock239 words
  14. Cost of Common Stock883 words
  15. Weighted Average Cost of Capital (WACC)382 words
  16. WACC and Investment Decisions724 words
  17. Bigger Picture374 words
  18. Reasons for Maintaining Cash on Hand495 words
  19. Defining the Cash Flow Cycle571 words
  20. Calculating the Cash Flow Cycle567 words
  21. Components of the Cash Budget480 words
  22. Managing Float562 words
  23. Managing Collections482 words
  24. Managing Disbursements414 words
  25. Defining Accounts Receivable532 words
  26. Setting a Credit Policy603 words
  27. Terms of Trade617 words
  28. Collecting Receivables573 words
  29. Inventory Types370 words
  30. Inventory Techniques527 words
  31. ABC Technique459 words
  32. Seasonal Production736 words
  33. Impact of Inflation on Inventory Management417 words
  34. Inventory Costs897 words
  35. Economic Order Quantity Technique515 words
  36. Just-in-Time Technique443 words
  37. Benefits of Inventory Management435 words
  38. Dangers Involved in Inventory Management376 words
  39. Short-Term Loans993 words
  40. Credit Cards845 words
  41. Factoring Accounts Receivable896 words
  42. Commercial Paper769 words
  43. Secured vs. Unsecured Funding890 words
  44. Family and Friends801 words
  45. Commercial Banks373 words
  46. Trade Credit or Accounts Payable556 words
  47. Navigating this Study Guide169 words
  48. Unit 1: Introduction to Finance1,061 words
  49. Unit 2: Financial Statements and Financial Analysis1,461 words
  50. Unit 3: Time Value of Money1,571 words
  51. Unit 4: Stocks, Bonds, and Financial Markets1,248 words
  52. Unit 5: Risk, Return, and the CAPM1,732 words
  53. Unit 6: Capital Budgeting Techniques1,204 words
  54. Unit 7: Corporate Capital Structure1,328 words
  55. Unit 8: Working Capital Management1,045 words

Principles of Finance by Saylor Academy, used under the CC BY 3.0 licence. The original course includes videos, quizzes and a final exam that are not reproduced here.