CFA Level 1 · Formula Sheet

CFA Level 1 formula sheet — every essential formula by topic

No formula sheet is provided in the exam. This reference covers the highest-priority formulas across all 10 topic areas. Prioritise TVM, CAPM, bond pricing, and DuPont — they appear directly or underpin multi-step calculations across the paper.

Time Value of Money

Future Value

FV = PV × (1 + r)ⁿ

Present Value

PV = FV / (1 + r)ⁿ

Annuity PV

PV = PMT × [1 − (1+r)⁻ⁿ] / r

Perpetuity PV

PV = PMT / r

Effective Annual Rate

EAR = (1 + r/m)ᵐ − 1

Continuous Compounding

EAR = eʳ − 1

Statistics & Probability

Population Variance

σ² = Σ(Xᵢ − μ)² / N

Sample Variance

s² = Σ(Xᵢ − X̄)² / (n−1)

Covariance

Cov(X,Y) = Σ[(Xᵢ−X̄)(Yᵢ−Ȳ)] / (n−1)

Correlation

ρ = Cov(X,Y) / (σx × σy)

Sharpe Ratio

SR = (Rp − Rf) / σp

Coefficient of Variation

CV = σ / μ

Portfolio Management & CAPM

Portfolio Return

E(Rp) = Σwᵢ × E(Rᵢ)

Portfolio Variance (2 assets)

σp² = w₁²σ₁² + w₂²σ₂² + 2w₁w₂Cov(1,2)

CAPM

E(Ri) = Rf + βi × [E(Rm) − Rf]

Beta

β = Cov(Ri, Rm) / σm²

Jensen's Alpha

α = Rp − [Rf + β(Rm − Rf)]

Treynor Ratio

T = (Rp − Rf) / βp

Fixed Income

Bond Price

P = Σ C/(1+y)ᵗ + FV/(1+y)ⁿ

Macaulay Duration

D = Σ [t × PV(CFt)] / Price

Modified Duration

ModD = MacD / (1 + y/m)

Price Change (Duration)

ΔP/P ≈ −ModD × Δy

Convexity Adjustment

ΔP/P ≈ −ModD×Δy + ½×Cvx×(Δy)²

Current Yield

CY = Annual coupon / Bond price

Equity Valuation

Gordon Growth Model (DDM)

P₀ = D₁ / (r − g)

Dividend Payout

D₁ = EPS × payout ratio

Sustainable Growth Rate

g = ROE × retention ratio

P/E Ratio

P/E = P₀ / EPS

EV/EBITDA

EV = Market cap + Debt − Cash

Free Cash Flow to Firm

FCFF = NI + NCC + Int(1−t) − ΔWC − CapEx

Financial Statement Analysis

DuPont ROE (3-factor)

ROE = Net margin × Asset turnover × Leverage

DuPont ROE (5-factor)

ROE = Tax burden × Interest burden × EBIT margin × Asset T/O × Leverage

Current Ratio

Current ratio = CA / CL

Quick Ratio

Quick = (Cash + STI + AR) / CL

Debt-to-Equity

D/E = Total debt / Shareholders equity

Interest Coverage

ICR = EBIT / Interest expense

Calculator mastery = free marks

The TI BA II+ handles TVM and cash flow calculations far faster than pen-and-paper. Practice setting P/Y, C/Y, CF0, C01, and the IRR/NPV worksheet until they are automatic. Time saved on mechanical calculations means time spent on multi-step problems. Test your formula recall with practice questions →

How many formulas do I need for CFA Level 1?

Estimates range from 150–300 formulas depending on how granular you count. High-priority areas are Quantitative Methods (TVM, statistics), Fixed Income (bond pricing, duration), Equity (valuation models), and Portfolio Management (CAPM, variance).

Do I get a formula sheet on the CFA Level 1 exam?

No. CFA Institute does not provide a formula sheet. You must memorise all required formulas. The TI BA II+ or HP 12C calculators are permitted for computation.

What are the most important CFA Level 1 formulas?

TVM (PV, FV, PMT), CAPM, DDM, P/E and EV multiples, bond pricing and duration (Macaulay and Modified), ROE DuPont decomposition, and the basic statistics (mean, variance, covariance, correlation).

Is quantitative methods heavily tested on CFA Level 1?

Quantitative Methods carries 6–9% weight (roughly 11–16 questions). Prioritise TVM, statistical inference, hypothesis testing, and basic regression. It underpins many calculations in other topics.

Apply every formula above in exam-realistic CFA Level 1 practice.

Start CFA Level 1 →