Is this CFA Level 1 formula sheet updated for 2026?

Yes. This formula sheet is aligned with the 2026 CFA Level I curriculum and is updated whenever CFA Institute publishes curriculum changes.

Can I use this formula sheet during the actual CFA exam?

No. The CFA exam is closed-book. You may not bring formula sheets, notes, or printed materials into the testing centre. Use this sheet for study and revision only.

How many formulas do I need to know for CFA Level 1?

Most candidates need to memorise roughly 50–70 core formulas across all 10 topic areas. This sheet covers every key formula from the curriculum so you can review them in one place.

What topics are covered in this formula sheet?

All 10 CFA Level I topic areas: Quantitative Methods, Economics, Financial Statement Analysis, Corporate Issuers, Equity Investments, Fixed Income, Derivatives, Alternative Investments, Portfolio Management, and Ethical & Professional Standards.

How should I use this formula sheet in my study plan?

Keep the relevant topic section open while you study, use it as a quick reference during practice questions, and run fast formula-review passes in your final weeks before the exam.

CFA Level 1 Formula Sheet (2026)

OneQuest

CFA Level 1 Formula Sheet (2026) | OneQuest

Alternative Investments

Alternative Investments formulas cover real estate valuation (cap rate, NOI), private equity (DPI, RVPI, TVPI), hedge fund fee structures, and commodity index returns.

Multiple of Invested Capital
$M O I C = \frac{Realized value + Unrealized value}{Total investment}$ MOIC = (Realized + Unrealized) / Total investment
Performance Fee (Hard Hurdle)
$Fee = max [0, p \times (r - r_{0})]$ Fee = max(0, p*(r - r0)) for hard hurdle

Corporate Issuers

Corporate Issuers formulas include WACC, cost of equity (CAPM and DDM approaches), operating and financial leverage, and breakeven analysis.

Cash Conversion Cycle
$CCC = DOH + DSO - DPO$ Cash conversion cycle = DOH + DSO - DPO
Current Ratio
$Current ratio = \frac{Current assets}{Current liabilities}$ Current ratio = Current assets / Current liabilities
Quick Ratio
$Quick ratio = \frac{Cash + Marketable securities + Receivables}{Current liabilities}$ Quick ratio = (Cash + Marketable securities + Receivables) / Current liabilities
Net Present Value
$N P V = t = 1 \sum n \frac{C F _{t}}{( 1 + r ) ^{t}} - Outlay$ NPV = Sum CF_t/(1+r)^t - Outlay; accept if NPV > 0
Return on Invested Capital
$R O I C = \frac{After-tax net profit}{Avg. BV of invested capital} = \frac{( 1 - t ) \times Operating profit}{Avg. (LT liabilities + Equity)}$ ROIC = After-tax profit / Avg invested capital
Weighted Average Cost of Capital
$W A C C = w_{d} r_{d} (1 - t) + w_{p} r_{p} + w_{e} r_{e}$ WACC = wd*rd*(1-t) + wp*rp + we*re
Cost of Equity (Modigliani-Miller)
$r_{e} = r_{0} + (r_{0} - r_{d}) (1 - t) \frac{D}{E}$ re = r0 + (r0 - rd)(1-t)(D/E) with taxes
Firm Value with Taxes
$V_{L} = V_{U} + t D$ V_L = V_U + t*D

Derivatives

Derivatives formulas include put-call parity, binomial option pricing, Black-Scholes-Merton inputs, and forward/futures pricing relationships.

Forward Price (Benefits/Income and Costs)
$F_{0} (T) = [S_{0} + P V_{0} (C) - P V_{0} (I)] (1 + r)^{T} or F_{0} (T) = S_{0} e^{(r - c) T}$ F0(T) = [S0 + PV(C) - PV(I)](1+r)^T or continuous: S0*e^((r-c)T)
Currency Forward Price
$F_{0, A / B} (T) = S_{0, A / B} e^{(r_{A} - r_{B}) T}$ F_A/B(T) = S_A/B * e^((rA - rB)*T)
Forward Valuation
$V_{0} (T) = S_{0} - \frac{F _{0} ( T )}{( 1 + r ) ^{T}}, V_{t} (T) = S_{t} - \frac{F _{0} ( T )}{( 1 + r ) ^{T - t}}$ V0 = S0 - F0/(1+r)^T; Vt = St - F0/(1+r)^(T-t)
Implied Forward Rate
$I F R_{A, B - A} = (\frac{( 1 + z _{B} ) ^{B}}{( 1 + z _{A} ) ^{A}})^{1/ (B - A)} - 1$

Economics

Economics formulas span micro and macroeconomics, including supply-demand analysis, GDP calculations, exchange rate parity conditions, and monetary/fiscal policy models.

Profit Maximization
$M R = M C$ Marginal Revenue = Marginal Cost
Fiscal Multiplier
$Multiplier = \frac{1}{1 - M P C ( 1 - t )}$ Fiscal multiplier = 1 / (1 - MPC(1-t))
Real Exchange Rate
$Real ex. rate_{A / B} = Nominal ex. rate_{A / B} \times \frac{C P I _{B}}{C P I _{A}}$ Real exchange rate = Nominal rate * (CPI_B/CPI_A)
Trade Balance
$X - M = (S - I) + (T - G)$ Trade balance: X - M = (S - I) + (T - G)

Equity Investments

Equity valuation formulas cover the Dividend Discount Model (DDM), Free Cash Flow models, and relative valuation multiples like P/E, P/B, and EV/EBITDA.

Dividend Discount Model
$V_{0} = t = 1 \sum \infty \frac{D _{t}}{( 1 + r ) ^{t}} = t = 1 \sum n \frac{D _{t}}{( 1 + r ) ^{t}} + \frac{P _{n}}{( 1 + r ) ^{n}}$ V0 = Sum Dt/(1+r)^t; or finite + terminal Pn/(1+r)^n
Perpetual Preferred Stock
$V_{0} = \frac{D _{0}}{r}$ V0 = D0 / r
Gordon Growth Model
$V_{0} = \frac{D _{0} ( 1 + g )}{r - g} = \frac{D _{1}}{r - g}, g = (1 - D / E) \times R O E$ V0 = D1/(r-g); g = (1 - D/E)*ROE
Forward P/E (Gordon)
$\frac{P _{0}}{E _{1}} = \frac{D _{1} / E _{1}}{r - g}$ P0/E1 = (D1/E1)/(r-g)

Financial Statement Analysis

Financial Statement Analysis (FSA) carries one of the highest topic weights. Key formulas include profitability, liquidity, solvency, and activity ratios, plus LIFO-FIFO adjustments and DuPont decomposition.

Basic EPS
$Basic EPS = \frac{Net income - Preferred dividends}{Weighted avg. shares outstanding}$ Basic EPS = (NI - Preferred dividends) / Weighted avg shares
Free Cash Flow to Firm
$F C F F = N I + N C C + I (1 - t) - F C I - W C I or F C F F = C F O + I (1 - t) - F C I$ FCFF = NI + NCC + I(1-t) - FCI - WCI
Free Cash Flow to Equity
$F C F E = C F O - F C I + Net borrowing$ FCFE = CFO - FCI + Net borrowing
Straight-Line Depreciation
$Depreciation = \frac{Cost - Salvage}{Useful life}$

Fixed Income

Fixed Income formulas address bond pricing, yield measures (YTM, current yield, spread), duration, convexity, and term-structure models essential for the CFA exam.

Bond PV (Market Discount Rate)
$P V = \frac{P M T}{( 1 + r ) ^{1}} + \dots + \frac{P M T + F V}{( 1 + r ) ^{n}}$ PV = Sum PMT/(1+r)^t + FV/(1+r)^n
Full Price and Accrued Interest
$P V_{f u l l} = P V_{f l a t} + A I = P V (1 + r)^{t / T}, A I = (t / T) \times P M T$ Full price = Flat + AI; AI = (t/T)*PMT
Current Yield
$\frac{Annual coupon}{Flat price}$ Current yield = Annual coupon / Flat price
Yield to Worst
$Y T W = min [Y T C, Y T M]$ Yield to worst = min(YTC, YTM)

Portfolio Management

Portfolio Management formulas encompass the Capital Asset Pricing Model (CAPM), Sharpe ratio, Treynor ratio, Jensen's alpha, and mean-variance optimisation.

Utility Function
$U = E (r) - \frac{1}{2} A σ^{2}$ U = E(r) - (1/2)*A*sigma^2; A > 0 risk averse
Capital Allocation Line
$E (R_{p}) = R_{f} + \frac{E [ R _{i} ] - R _{f}}{σ _{i}} σ_{p}$ E(Rp) = Rf + ((E[Ri]-Rf)/sigma_i)*sigma_p
Capital Market Line
$E (R_{p}) = R_{f} + \frac{E [ R _{M} ] - R _{f}}{σ _{M}} σ_{p}$ CML: E(Rp) = Rf + ((E[RM]-Rf)/sigma_M)*sigma_p
Beta
$β_{i} = \frac{Cov ( R _{i} , R _{M} )}{σ _{M}^{2}} = ρ_{i, M} \frac{σ _{i}}{σ _{M}}$ Beta = Cov(Ri,RM)/sigma_M^2 = rho*sigma_i/sigma_M

Quantitative Methods

Quantitative Methods covers time value of money (TVM), descriptive statistics, probability distributions, hypothesis testing, and linear regression — foundational formulas used throughout the CFA curriculum.

Required Rate of Return
$Interest rate = Real risk-free rate + Inflation premium + Default risk premium + Liquidity premium + Maturity premium$ Interest rate = Real risk-free rate + Inflation premium + Default risk premium + Liquidity premium + Maturity premium
Nominal Risk-free Rate
$(1 + r_{n o m}) = (1 + r_{r e a l}) (1 + π) \Rightarrow r_{n o m} \approx r_{r e a l} + π$ (1 + Nominal risk-free rate) = (1 + Real risk-free rate)(1 + Inflation premium); Nominal risk-free rate ≈ Real risk-free rate + Inflation premium
Holding Period Return
$R = \frac{P _{1} - P _{0}}{P _{0}} + \frac{I}{P _{0}} or R = [(1 + R_{1}) (1 + R_{2}) \dots (1 + R_{n})] - 1$ R = (P1 - P0)/P0 + I/P0; or multi-period: R = [(1+R1)(1+R2)...(1+Rn)] - 1