10 Pages)
📖 Page 1: Introduction to Finance
What is Finance?
Finance is the study and management of money, investments, and other financial instruments.
Categories of Finance:
1. Personal Finance
○ Budgeting, saving, investing, debt, insurance, retirement planning.
2. Corporate Finance
○ Managing business capital, risk, and returns.
3. Public Finance
○ Government income and expenditures.
Why Finance Matters:
● Helps in decision-making
● Supports economic growth
● Manages risks
💰 Page 2: Time Value of Money (TVM)
Key Concept:
, ● Money now is worth more than money later due to earning potential.
Formulas:
1. Future Value (FV):
FV=PV×(1+r)nFV = PV \times (1 + r)^nFV=PV×(1+r)n
2. Present Value (PV):
PV=FV(1+r)nPV = \frac{FV}{(1 + r)^n}PV=(1+r)nFV
Examples:
● Investing $1,000 at 5% for 3 years →
FV=1000×(1.05)3=1157.63FV = 1000 \times (1.05)^3 =
1157.63FV=1000×(1.05)3=1157.63
📊 Page 3: Financial Ratios and Analysis
Categories:
1. Liquidity Ratios
○ Current Ratio: Current Assets / Current Liabilities
○ Quick Ratio: (Current Assets - Inventory) / Current Liabilities
2. Profitability Ratios
○ Net Profit Margin: Net Income / Revenue
○ Return on Equity (ROE): Net Income / Shareholder's Equity
3. Leverage Ratios
○ Debt-to-Equity: Total Debt / Equity
○ Interest Coverage: EBIT / Interest Expense