Financial numeracy and business economics: a free course
Learn financial percentages, growth, time value, unit economics and decisions under uncertainty through nine lessons, original diagrams and a worked business case.
THE FINX JOURNAL LEARN BY DOING
Financial modeling
Understand how a model fits together, follow its connections and practice finding the mistakes behind the numbers.
In this topic
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Budget vs forecast: update expectations without rewriting the plan
Learn the difference between a budget and a forecast with a dated monthly case: a variance bridge, two forecast versions and the annualizing trap.
Fixed charge coverage ratio: define the obligations before calculating
Calculate fixed-charge coverage under two stated conventions, reconcile debt service, and test a fictional covenant without double-counting lease payments.
ROIC formula: calculate returns on invested capital consistently
Build and audit a return on invested capital: reconcile NOPAT and invested capital two ways each, choose a denominator convention, and catch three inconsistencies.
Sources and uses: balance acquisition funding in a worked example
Build a sources and uses table for a fictional buyout: offer basis, refinancing, fees and the sponsor equity plug — then run the checks that catch what the plug hides.
Cost of equity formula: build a CAPM estimate and explain its limits
Assemble Northgate's cost of equity from a dated risk-free rate, beta and equity risk premium, catch a 604% units error and two silent wiring errors, and price the range.