IFMP Financial Analysts Certification Level 1, Pakistan cheat sheet
IFMP Financial Analysts Certification Level 1, Pakistan · Keep the key ideas within reach.
Financial Analysts Level 1
Time value of money: FV = PV × (1 + r)^n; PV = FV / (1 + r)^n; for annuities use PMT × [(1 − (1 + r)^−n) / r] for present value.
Net present value (NPV) = Σ [CF_t / (1 + r)^t] − initial outlay; accept project if NPV > 0; IRR is the discount rate that makes NPV = 0.
Capital asset pricing model (CAPM): E(R_i) = R_f + β_i × [E(R_m) − R_f]; beta measures systematic risk; unsystematic risk is diversifiable.
WACC = (E/V) × R_e + (D/V) × R_d × (1 − t); use market values for weights; R_e from CAPM or dividend growth model.
Dividend growth model: P_0 = D_1 / (r − g); sustainable growth g = ROE × (1 − payout ratio); required return r = D_1/P_0 + g.
DuPont analysis: ROE = net profit margin × asset turnover × equity multiplier = (NI/Sales) × (Sales/Assets) × (Assets/Equity).
Bond valuation: price = Σ [C / (1 + y)^t] + F / (1 + y)^n; relationship: price and yield move inversely; duration measures price sensitivity to yield changes.
Financial statement analysis: current ratio = current assets / current liabilities; quick ratio excludes inventory; interest coverage = EBIT / interest expense.
Efficient market hypothesis (EMH) forms: weak (past prices reflected), semi-strong (public info reflected), strong (all info including private reflected).