Capital structure: Refers to the mix of debt and equity used to finance a company's operations

and investments.
Cost of capital: Refers to the expected return required by investors to compensate them for the
risk they take in providing capital to the company.
Financial statements: Documents that provide a summary of a company's financial
performance, including income statements, balance sheets, and cash flow statements.
Valuation: The process of determining the value of a company, asset, or investment.
Cash flow: The movement of cash into or out of a business, including revenue, expenses, and
investment activities.
Risk management: The process of identifying, assessing, and managing risks that could
negatively impact a company's financial performance.
Working capital: The difference between a company's current assets and current liabilities, used
to measure its short-term liquidity.
Mergers and acquisitions: The process of combining two or more companies or assets through a
purchase, merger, or other transaction.
Corporate governance: The system of rules, practices, and processes by which a company is
directed and controlled.
Financial modeling: The process of creating a mathematical representation of a company's
financial situation to inform decision-making.

Projected Income Statement:

Formula for Revenue: Quantity x Price
Formula for Cost of Goods Sold (COGS): Beginning Inventory + Purchases - Ending Inventory
Formula for Gross Profit: Revenue - COGS
Formula for Operating Expenses: Fixed Operating Expenses + Variable Operating Expenses
Formula for Earnings Before Interest and Taxes (EBIT): Gross Profit - Operating Expenses
Formula for Net Income: EBIT - Interest Expense - Taxes
Projected Balance Sheet:
Formula for Total Assets: Total Liabilities and Equity
Formula for Accounts Receivable: Beginning AR + Sales - Collections - Write-offs
Formula for Inventory: Beginning Inventory + Purchases - COGS - Ending Inventory
Formula for Accounts Payable: Beginning AP + Purchases - Payments
Formula for Working Capital: Current Assets - Current Liabilities
Projected Cash Flow Statement:
Formula for Cash Flow from Operations (CFO): Net Income + Depreciation and Amortization -
Changes in Working Capital
Formula for Cash Flow from Investing Activities (CFI): Change in Fixed Assets + Proceeds from
Sale of Assets - Purchase of Investments
Formula for Cash Flow from Financing Activities (CFF): Change in Debt + Change in Equity
Formula for Net Change in Cash: CFO + CFI + CFF
Valuation:
Formula for Discounted Cash Flow (DCF): PV = FV / (1+r)^n, where PV is present value, FV is
future value, r is discount rate, and n is number of periods
Formula for Price to Earnings (P/E) Ratio: Stock Price / Earnings per Share
Formula for Enterprise Value (EV): Market Capitalization + Debt - Cash and Cash Equivalents

Financial analysis: This analysis should include the company's financial statements, including
the balance sheet, income statement, and cash flow statement. The financial analysis should
also include key financial ratios, such as the debt-to-equity ratio, current ratio, and return on
equity.
Industry analysis: This analysis should provide an overview of the industry in which the
company operates, including trends, competition, and key drivers of growth. The analysis
should also identify any potential risks or challenges that the industry faces.
Market analysis: This analysis should provide an overview of the company's target market,
including size, growth potential, and competition. The analysis should also identify any potential
risks or challenges that the company faces in its market.
Management analysis: This analysis should provide an overview of the company's management
team, including their experience, qualifications, and track record. The analysis should also
include an assessment of the management team's ability to execute the company's business
plan.
Risk assessment: This report should identify the key risks associated with the loan, including
credit risk, market risk, and operational risk. The report should also include a plan for mitigating
these risks.
Cash flow analysis: This analysis should provide an overview of the company's cash flow,
including projections for the future. The analysis should also identify any potential cash flow
challenges that the company may face.
Collateral analysis: This analysis should provide an assessment of the collateral that the
company is offering to secure the loan, including its value and the risks associated with it.

Debt-to-equity ratio: This ratio measures a company's leverage by comparing its total debt to its
total shareholder equity. The formula for debt-to-equity ratio is:
Debt-to-equity ratio = Total debt / Total shareholder equity

A high debt-to-equity ratio can indicate that a company is heavily reliant on debt to finance its
operations, which can be a sign of financial risk.

Current ratio: This ratio measures a company's ability to meet its short-term obligations by
comparing its current assets to its current liabilities. The formula for current ratio is:
Current ratio = Current assets / Current liabilities

A high current ratio (greater than 1) indicates that a company has sufficient short-term assets
to cover its short-term liabilities. Conversely, a low current ratio (less than 1) can indicate that a
company may have difficulty meeting its short-term obligations.
Return on equity (ROE): This ratio measures a company's profitability by comparing its net
income to its shareholder equity. The formula for ROE is:
ROE = Net income / Shareholder equity

A high ROE indicates that a company is generating a high return on the equity invested by its
shareholders. However, a high ROE may also indicate that a company is taking on excessive risk
to achieve its profitability.

Earnings before interest, taxes, depreciation, and amortization (EBITDA) margin: This ratio
measures a company's operating profitability by comparing its EBITDA to its total revenue. The
formula for EBITDA margin is:
EBITDA margin = EBITDA / Total revenue

A high EBITDA margin indicates that a company is generating a high level of operating
profitability relative to its total revenue. However, it's important to note that EBITDA does not
include interest, taxes, depreciation, or amortization, which are all important factors that can
affect a company's profitability.

Interest coverage ratio: This ratio measures a company's ability to meet its interest payments
by comparing its EBITDA to its interest expense. The formula for interest coverage ratio is:
Interest coverage ratio = EBITDA / Interest expense

A high interest coverage ratio indicates that a company is generating sufficient cash flow to
cover its interest payments. Conversely, a low interest coverage ratio can indicate that a
company may have difficulty meeting its interest obligations.

ndustry analysis: The U.S. Bureau of Labor Statistics provides data and analysis on a wide range
of industries, including employment trends, wage and salary information, and projections for
future growth. The U.S. Census Bureau also provides data on industries, including statistics on
shipments, revenue, and other key metrics.
Market analysis: One resource for market analysis is the market research firm IBISWorld, which
provides reports on a wide range of industries and markets. Another resource is the website
Statista, which provides statistics and data on a wide range of topics, including consumer
behavior and market trends.
Collateral analysis: The website Zillow can be a useful resource for assessing the value of real
estate collateral, as it provides estimated property values and other information for a wide
range of properties. The website Kelley Blue Book can be useful for assessing the value of
vehicles, while websites such as Sotheby's and Christie's can be useful for assessing the value of
artwork and other collectibles.