Financial modeling and valuation, one-page reference · academy.colossusfirm.com
Cheat Sheet
Every formula and ratio the course relies on, gathered on a single page. Use it as a desk reference while you model. Each card notes the module where the idea is taught, so you can jump back when a definition is fuzzy.
Core identities · M1 to M3
Net income ends the income statement, starts operating cash flow, and adds to retained earnings. Profit is an opinion, cash is a fact.
Income statement · M2, M5
Profitability · M7
A good ratio is always relative to the industry and the company's own history.
Liquidity & leverage · M7
Working capital · M8
Rising working capital uses cash; a negative cycle is free funding from suppliers.
Cost of capital · M11
Weights use market values, not book. A higher beta means a higher required return.
Discounted cash flow · M12
The terminal value usually dominates, so guard and WACC closely; keep .
Market multiples · M7, M13
A multiple only transfers between genuinely similar businesses. Use the median peer.
Quality & judgment · M6, M14, M15, M16
Want cash conversion at or above one; profit rising while cash falls is a red flag. EBITDA ignores reinvestment, so it is never free cash flow. A DCF gives a range, not a point; stress WACC and terminal growth. Health and price are separate questions. State every assumption out loud.