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Summary - introducation to finance (FI118)

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This study guide is designed to help students prepare for the **FI 118 Intro to Finance Midterm Exam**. It summarizes the most important concepts from the course, including the **five principles of finance, agency conflicts, business organization structures, financial statements, and key financial formulas**. The guide includes clear explanations of **income statements, balance sheets, net working capital, and debt ratios**, along with important topics such as **time value of money, present value, future value, annuities, credit card interest calculations, and loan and mortgage payments**. In addition to definitions and formulas, the study guide provides **practice questions similar to those found on the exam** to help reinforce understanding and improve problem-solving skills. The content is organized in a simple and easy-to-review format, making it ideal for **quick exam preparation and last-minute studying**. This resource is perfect for students taking **FI 118 or introductory finance courses** who want a clear and structured overview of the key concepts needed to succeed on their midterm exam.

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INTRO TO FIANCE STUDY
Midterm study guide

Why this Topic Matters
2026
GUIDE
Finance helps you understand how money moves in businesses and
investments.
Companies must decide how to raise money "One step at a
How to invest money time. You'll get
How to measure profit and risk there."
How time and interest affect money
– @reallygreatsite
Understanding finance helps businesses make better financial decisions.



Main Points
5 Principles of Finance
Cash flow matters • Time value of money • Risk requires reward • Markets usually correct • Agency
problems exist
• Agency Conflict
Managers vs shareholders goals
• Business Structures
Sole prop • Partnership • Corporation • LLC
• Income Statement Order
Sales → COGS → Gross Profit → Expenses → EBIT → EBT → Net Income
• Balance Sheet
Assets = Liabilities + Equity
• Net Working Capital
Current Assets − Current Liabilities
• Debt Ratio
Total Liabilities / Total Assets
• Time Value of Money
Money today > money later
• Present Value
PV = FV / (1+r)ⁿ
• Future Value
FV = PV(1+r)ⁿ
• Annuity
Equal payments over time
• Loans / Mortgages
PMT based on loan, rate, time

Document information

Uploaded on
March 4, 2026
Number of pages
2
Written in
2025/2026
Type
Summary
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