PART ONE: LEARN BASIC FINANCE
Chapter 1 Finance Basics
A. Exchange between Now and Future
Chapter 2 Financial Markets
A. Different Types of Financial Markets
B. Market Players and the Economy
C. The Cs: Credit Crisis and Credit Crunch
Chapter 3 Cost of Exchange
A. Introduction to Charges and Borrowing Rates
B. Different Types of Interest Rates
i. Simple
ii. Compound
iii. Fixed and Floating
iv. Penalty
v. Spot, Forward and Yield
vi. Discounting and Net Present Value
vii. Annuity and Discounted Cash Flow
viii. Typical Questions on Fixed Income Return
Chapter 4 Income Statement and Ratio Analysis
A. Introduction to Income Statement
B. Profitability Ratio
C. Constituents of Profit and Loss Statement
i. Sales Revenue
ii. Variable Cost
iii. Fixed Production Cost
iv. Change in Inventory
v. Cost of Goods Sold
vi. Contribution Margin
vii. Gross Profi t
viii. Selling and Distribution Expenses
ix. General Administration Cost
D. Typical Income Statement and Ratios
E. Fluctuation in Profit: Revenue and Cost Drivers
F. Profit beyond Breakeven Point
G. Deciding the Right Pricing Strategy
H. Exercise
Chapter 5 Balance Sheet and Ratio Analysis
A. Definition of Balance Sheet
B. Shareholders’ Expectation: Return on Capital Employed
i. Drivers of ROCE: Profit and Asset Turnover
ii. Sub-sub Ratio of ROCE: Fixed Asset Turnover
iii. Sub-sub Ratio of ROCE: Working Capital
C. Solvency Ratios
i. Gearing
ii. Liquidity
D. Exercise: Income Statement, Balance Sheet and Ratio Analysis
Chapter 6 Stock Market Ratios for Listed Companies
A. Introduction to Published Accounts
B. Price Earnings Ratio
C. Price Earnings Growth Ratio
D. Introduction to Dividend Payout
i. Dividend Payout Ratio
ii. Dividend Yield
iii. Dividend Cover
E. Net Worth per Share
F. Intrinsic Value
G. Conclusive Notes: Apply Sensible Judgment
Chapter 7 Basic Investment Decision Techniques
A. Introduction to Investment Evaluation Process and Techniques
B. Discounted Cash Flow Approach
i. Net Present Value
ii. Internal Rate of Return
iii. NPV & IRR: Assumptions and Further Considerations
iv. Mutually Exclusive Projects
v. Unconventional Cash Flows and Multiple IRRs
vi. Investments with Different Life Periods
vii. Capital Rationing
viii. NPV vs. IRR
C. Simple Non-Discounti ng Techniques
i. Payback Period
ii. Accounting Rate of Return
D. General Views on Investment Techniques in the Practical World
E. Exercise
PART TWO: INVEST FOR PROFIT
Chapter 8 Different Types of Investments
A. Introduction
B. Savings Account
C. Fixed Income Securities
i. Fixed Deposits
ii. Bonds
D. Property
E. Life Insurance
F. Unit Trusts
G. Direct Share Investment
H. Financial Derivatives
i. Complexity of Derivatives
ii. Options and Warrants
iii. Sell / Buy Currency Forward: Hedging
I. International Investments
Chapter 9 Road to Richness
A. Obvious Gap between Rich and Poor
B. Fulfill a Golden Dream is Possible in any Trade or Profession
C. The Wonders of Compounding
D. Example: Conservative vs. Aggressive Investor
Chapter 10 Risk and Investment Return
A. Introduction to Risk and Return
B. Take Extra Care and Due Diligence on Investments Offering High Return
C. Chasing the Bubble
D. Hoping for Rebound
E. Golden Rules of the Game
i. Never Borrow to Invest in High Risk Products
ii. Make a few Good Selections and Buy with Cash You can Afford
iii. Have Patience and Strong Self Control
iv. Be Strong in Face of Potential Loss
v. Do not Put all Your Money in Stocks, Keep Surplus for Leveraging
vi. Buy Stocks with a Strong Foundation at a Reasonable Price
vii. Diversify Your Portfolio but not Excessively with Limited Funds
viii. Set a Target Price to Sell for Profit or to Cut Losses
ix. Do not Gamble on Pure Tips and Ratings from “Investment Wizards”
F. Concluding Notes: You are Aware of the Volatile Share Market and Want to Win
G. Investor Attitudes in Share Investment
Chapter 11 Lesson to Learn: Financial Tsunami
A. Time Bomb: the Pre-Tsunami Symptoms
B. Bursting of the Time Bomb
C. Confidence will Return Sooner or Later
Chapter 12 Convert Crisis into Opportunity
A. Abnormal Gain Stems from a Low Price Market
B. Stay Focus and Do not Let Fear Chase You from a Panicky Market
C. Shorten Saving Period for Old Age with More Shares Less Money
D. Next Step: Time to Pick up Some Good Stocks
E. Play the Game Right in a Downhill Market
Chapter 13 When to Buy and Sell for Profit
A. Fair Price and Margin of Safety
B. When and What Stocks to Buy
C. When to Sell Your Stocks |
