corporate-finance-basics

# Corporate Finance Basics Finance is the discipline of allocating capital over time under uncertainty. Every business decision that commits resources has a financial structure: a cost, a benefit, a timing, and a risk. This skill catalogs the core techniques a manager or founder uses to evaluate investments, raise capital, and read financial statements — enough to make sound decisions without pretending to be a CFO. **Agent affinity:** drucker (capital allocation and effectiveness), mintzberg (reading financials in context) **Concept IDs:** bus-debt-vs-equity, bus-cost-benefit-analysis, bus-break-even-analysis, bus-investment-appraisal ## The Finance Toolbox at a Glance | # | Technique | Best for | Key signal | |---|---|---|---| | 1 | Time value of money | Comparing cash flows across time | Decision involves money now vs later | | 2 | Net present value (NPV) | Evaluating investments | Must pick among projects with different timing | | 3 | Internal rate of return (IRR) | Ranking projects | Need a single summary number | | 4 | Payback period | Quick screening | Liquidity matters more than total return | | 5 | Break-even analysis | Sizing a new product | Need to know the volume required to not lose money | | 6 | Cost-benefit analysis | Structured decision | Costs and benefits span categories and time | | 7 | Debt vs equity | Structuring capital | Must decide whether to borrow or sell ownership | | 8 | Working capital | Managing the operating cycle | Cash is tight despite pr...