1. FIN220 1st Midterm Review

2. Ch 1 An Overview of Financial Management
What is Finance?
Finance within an Organization
Corporate Finance, Capital Markets & Investments
Forms of Business Organization
Corporation (Advantages vs Disadvantages)
Limited Liability

3. Ch 1 An Overview of Financial Management
Stock Price & Shareholder Value
Shareholder Wealth Maximization
Intrinsic Value, Stock Price, & Executive Compensation
Intrinsic Value Vs. Stock Price
Equilibrium
Conflicts Between Managers, Stockholders & Bondholders
Managers vs Shareholders
Stockholder vs Bondholder

4. Ch 2 Financial Markets & Institutions
The Capital Allocation Process
Financial Markets (Types of Market &Derivatives)
Financial Institutions
The Stock Market (The Market for Common Stock)
Types of Stock Market Transactions
IPOs
Stock Market Returns
Stock Market Efficiency

5. Ch 4 Analysis of Financial Statements
Trend Analysis, Industry Analysis & Benchmarking
The DuPont Equation
Uses & Limitations of Ratios
Looking Beyond the Numbers
Potential Misuses of ROE

6. Ch 4 Ratio Analysis Liquidity Ratios (Current Ratio & Quick Ratio)
Asset Management (Inventory TO, DSO, FATO & TATO)
Debt Management Ratio
TIE & Debt Ratios (Total Debt to Total Assets)
Effect of Debt (Leverage) on ROE
4. Profitability Ratios
Operating Margin, Profit Margin, BEP
ROA &ROE
Market Value Ratios
Price/Earnings (P/E) & Market/Book Ratio (M/B)

7. Chapter 5 Time Value of Money
Time lines
Future values (FV)
Simple vs. compound interest
Compounding
Present values (PV)
Discounting
Finding annuity payments, periods, and interest rates
Ordinary annuity
Annuity due

8. Chapter 5 Time Value of Money
Perpetuities
Uneven cash flow
Future value of an uneven cash flow stream
Compounding periods
Semiannual and other
Comparing interest rates
Nominal interest rate (APR)
Effective Annual Rate (EAR or EFF)
Fractional time periods
Amortized loans