FMVA study guide
FMVA · Work through your exam, one topic at a time.
The Financial Modeling & Valuation Analyst (FMVA®) is a professional certification offered by the Corporate Finance Institute (CFI). CFI describes it as a program to "Learn advanced financial modeling, earn industry-standard credentials, and stand out as a top valuation expert," positioning it as a pathway into corporate finance, investment banking and financial planning & analysis work. The FMVA study guide has 8 sections and about 2,431 words.
01Corporate Finance: Time Value, NPV and the Cost of Capital
Corporate finance questions test whether you can convert a stream of future cash flows into a single decision metric. Start with the time value of money: FV = PV(1+r)^n, and remember that NPV discounts at the opportunity cost of capital, not at the IRR.
303 words, about 2 min02Three-Statement Modeling Mechanics and Integrity Checks
A three-statement model forecasts the income statement, balance sheet and cash flow statement so that they tie together through retained earnings, debt and working capital. Build in this order: (1) operating assumptions and drivers, (2) income statement, (3) balance sheet schedules (PP&E roll-forward, debt schedule, working capital, equity), (4) cash flow statement, (5) checks.
315 words, about 2 min03Excel: Lookups, References and Auditable Model Design
Excel competence is judged by whether your formulas survive being copied, inserted into and audited by someone else. Master the lookup family: INDEX/MATCH is more robust than VLOOKUP because it does not break when a column is inserted and can look to the left; XLOOKUP removes the column-count argument entirely and supports a not-found value.
292 words, about 1 min04Valuation: DCF, Terminal Value and Multiple Consistency
The two families are intrinsic (DCF) and relative (trading comparables, precedent transactions). A DCF discounts unlevered free cash flow at WACC to an enterprise value, adds a terminal value, then bridges to equity value: EV minus net debt minus preferred and minority interest plus associates equals equity value; divide by diluted shares (treasury stock method for options) to get value per share.
288 words, about 1 min05Presentation and Visuals: Chart Choice and Data-Ink Discipline
Output quality decides whether the analysis is used. Two rules generate most questions: choose the chart type from the message, and remove everything that is not carrying information (a high data-ink ratio).
328 words, about 2 min06Budgeting and Forecasting: Drivers, Seasonality and Variance Analysis
A budget is a financial plan for a defined period, usually annual and fixed; a forecast is a rolling estimate updated as actuals arrive; a long-range plan covers three to five years. Questions often turn on process: top-down (management targets, fast, low buy-in) versus bottom-up (departments build it, higher ownership, risk of sandbagging), and zero-based budgeting (every cost justified from zero, strong overhead discipline) versus incremental (last year plus a percentage).
302 words, about 2 min07Accounting: Statement Linkages and Recognition Rules
The three statements are one system: net income flows to retained earnings and is the starting point of the cash flow statement; the cash flow statement explains the change in cash; the balance sheet must balance. Every balance sheet change therefore has two effects, and exam questions exploit this relentlessly.
299 words, about 1 min08Strategy: Industry Structure, Moats and Returns Above WACC
Strategy questions test whether you can connect an industry's structure to a company's economics. The core frameworks: Porter's five forces (supplier power, buyer power, threat of new entrants, threat of substitutes, rivalry) explain industry profitability; the value chain shows where in the activity set a firm creates or loses margin; SWOT summarises internal strengths and weaknesses against external opportunities and threats, but is a summary tool rather than an analytical framework - confusing it with Porter is a classic distractor.
304 words, about 2 min