By Topic:

Introduction to Financial Statements

Review the complete financial statements of a company for multiple years.

  • Execute web queries to download financial statements
  • Validate elements of the balance sheet, income statement, and statement of cash flows

Type: Data Query
Duration: Less Than 1 Hour

Income Statement

Understand the structure of a company's profit and loss accounting using the income statement. Students will become acquainted with the following income statement components:

  • Sales
  • Operating Income
  • Net Income
  • Earnings Per Share

Type: Data Query
Duration: Less Than 1 Hour

Balance Sheet

Students learn the balance of assets and liabilities/equity. On-screen output includes such items as:

  • Cash and Short-Term Investments
  • Depreciation and Amortization
  • Accounts Payable
  • Total Shareholders' Equity

Type: Data Query
Duration: Less Than 1 Hour

Statement of Cash Flows

Students learn the components of a company's Statement of Cash Flows. Includes data such as:

  • Cash from Operating Activities
  • Cash from Investing Activities
  • Cash from Financing Activities
  • Net Change in Cash

Type: Data Query
Duration: Less Than 1 Hour

Linking Financial Statements

Students will learn how the balance sheet, income statement, and cash flow statement are interrelated.

  • Visualize links with simple illustrations
  • Work with a real-world company

Type: Data Query
Duration: Less Than 1 Hour

Financial Ratios Visualization

Students become acquainted with a broad range of financial ratios using this sophisticated and intuitive visualization tool.

  • Over 70 different ratios organized by category
  • Compare to industry averages
  • Fully interactive visualizations

Type: Interactive App
Duration: Less Than 1 Hour

Firm Liquidity Ratios

How to do managers and investors determine a company's liquidity? The Firm Liquidity Ratios tool teaches students about different ratios commonly used to determine a company's ability to meet its financial obligations.

  • Visually engaging format
  • Firm and industry-level comparisons

Type: Interactive App
Duration: Less Than 1 Hour

Three Levers of Performance

Students learn the methods that financial managers use to increase ROE.

  • Understand how managers deliver financial value to shareholders
  • Learn about the return on equity (ROE) performance metric
  • How Profit Margin, Asset Turnover, and Financial Leverage affect ROE

Type: Data Query
Duration: Less Than 1 Hour

Portfolio Diversification

Using a series of visualizations, students will see the progressive impact of diversification on portfolio return and volatility.

  • Understand the effects of diversification
  • Generate and interpret graphs of the efficient frontier
  • Understand concepts of returns, standard deviations and correlations

Type: Data Query
Duration: Less Than 1 Hour

Beta Visualization

WRDS' proprietary Beta Visualization application teaches students about beta, R2, and how the two metrics represent stock risk.

  • Select stocks individually or by industry
  • Compare to industry averages
  • Fully interactive and integrated charting of risk measures

Type: Interactive App
Duration: Less Than 1 Hour

Market and Firm-Specific Risk

Use the Beta Visualization application to learn about alpha and beta, and how they relate to firm-specific and market risk. Gain exposure to:

  • Alpha, beta, and measures of risk
  • R2 and beta reliability
  • Sophisticated visualization of metrics

Type: Interactive App
Duration: Less Than 1 Hour

Portfolio Risk Over Time

Looking at descriptive statistics of stock returns, students evaluate the impact of diversification.

  • Download and graph time series of stock returns
  • Estimate and understand portfolio risk by calculating return variances

Type: Data Query
Duration: Less Than 1 Hour

Mechanics of Diversification

How does diversification work? Developed in conjunction with Wharton Professor, Donald Keim, this application introduces students to to the mechanics of diversification in an engaging format using three interactive tools:

  • Variance-covariance matrix
  • Two-asset opportunity set
  • Limits of diversification graph

Type: Interactive App
Duration: Less Than 1 Hour

CAPM Equity Valuation

Students will learn to calculate cost of equity and evaluate the relationship between risk and expected return.

  • Understand the capital asset pricing model
  • Download and evaluate company returns
  • Compute the cost of equity

Type: Data Query
Duration: Less Than 1 Hour

Fama-French Three-Factor Analysis

In this teaching tool, students are introduced to the Fama-French three-factor model. Extending the CAPM, Fama-French adds both size and value factors in this sophisticated asset pricing model.

• Fama-French factors explained
• Step-by-step multiple regression
• Practical Excel skills

Type: Data Query
Duration: Less Than 1 Hour

Estimating Volatility

Using MATLAB, students will learn about volatility clustering in stock prices and test the predictive power of the GARCH model. 

  • Identify volatility clustering
  • Apply econometric methods (GARCH)
  • Interpret statistical output and test model fit

Type: Data Query
Duration: 1 to 2 Hours

Mutual Fund Turnover

Duplicate market returns or try to exceed them? Students evaluate the impact of management styles on mutual funds.

  • Understand effects of trading activity in mutual funds
  • Buy-and-hold vs. actively managed funds

Type: Data Query
Duration: Less Than 1 Hour

Efficient Frontier

Students will learn important concepts in diversification and portfolio optimization using a rich, interactive application.

  • Visualize the efficient frontier
  • Adjustable parameters
  • Stocks from the Dow 30

Type: Interactive App
Duration: Less Than 1 Hour

Internal Rate of Return

Measure and compare the profitability of different investments using a capital budgeting analysis.

  • Calculate and understand cash flows, IRR, and NPV
  • Examine multiple investment scenarios

Type: Data Query
Duration: Less Than 1 Hour

Time Value of Money: Compound Interest

Students learn basic time value of money concepts and visualize growth of investments using an interactive compound interest graph.

  • Change key parameters such as interest rate and compounding frequency
  • Plot results on an interactive graph

Type: Interactive App
Duration: Less Than 1 Hour

Time Value of Money: Present and Future Value

Use the interactive computational tool to familiarize students with the variables found in basic time value of money problems. Students learn techniques of:

  • Compounding
  • Discounting

Type: Interactive App
Duration: Less Than 1 Hour

Aggregate Demand and Aggregate Supply

Using this introductory aggregate demand and aggregate supply model, students learn how macroeconomic events impact economic output and price levels.

  • Interactive AD/AS graph
  • Visualize impact of economic fluctuations

Type: Interactive App
Duration: Less Than 1 Hour

Purchasing Power Parity (PPP) GDP

How do we compare economies across countries? Students are introduced to the concept of purchasing power parity (PPP) and will complete a graphing activity using Penn World Table (7.1) data.

  • GDP per capita for 189 countries
  • 60 years of data

Type: Interactive App
Duration: Less Than 1 Hour

Fiscal Policy: Multiplier Effect

Using this multiplier calculation tool, students learn how fiscal policy – both government spending and tax policies – can impact aggregate demand.

  • Visual representation of multiple rounds of spending
  • Allows users to input custom values for initial demand and MPC

Type: Interactive App
Duration: Less Than 1 Hour

Treasury Yield Curve

Students learn what the U.S. Treasury curve is, how it is plotted, and how it can be viewed as an indicator of economic health.

  • 3-D model of U.S. Treasury yield curve, 1975-2015
  • Introduction to federal funds rate as a tool of monetary policy

Type: Interactive App
Duration: Less Than 1 Hour

Introduction to Text Analysis

This teaching tool presents an overview of natural language processing (NLP), concentrating on techniques used to prepare text data for analysis, including:

  • Tokenization
  • Lemmatization
  • Stop words
  • Word frequency

Type: Interactive App
Duration: Less Than 1 Hour

Introduction to Sentiment Analysis

Students learn some basics of sentiment analysis, including:

  • How text can be classified as positive, negative, or neutral
  • Sentiment lexicon vs. machine learning approaches

Type: Interactive App
Duration: Less Than 1 Hour

Sentiment Analysis Lexicons

Many sentiment analysis tools rely on sentiment lexicons—lists of words scored for positive and negative connotations. Students learn different approaches to creating these lexicons.

  • Demonstrates six sample sentiment lexicons
  • Introduces domain-specific sentiment analyses of financial statements

Type: Interactive App
Duration: Less Than 1 Hour

Named-Entity Recognition

Named-entity recognition (NER)—the process of finding and classifying named entities such as people, locations, and organizations in text—is central to many other natural language processing tasks. Students learn basic concepts and evaluate three approaches to NER:

  • Rule-based
  • Machine learning
  • Neural network

Type: Interactive App
Duration: Less Than 1 Hour

Machine Learning: Text Classification

In this supervised machine learning assignment, students are asked to adjust the training/testing parameters on a text classification tool and review results. Students will learn:

  • Basic theory underlying machine learning
  • Naive Bayes text classification

Type: Interactive App
Duration: Less Than 1 Hour

Introduction to Financial Statements

Students will become conversant in executing web queries to download financial data. They will also validate important components of the balance sheet, income statement, and statement of cash flows for a company of their choosing. 

Income Statement

Students will become conversant in executing web queries to download financial data. They will also become familiar with the basic components of a company's income statement.

Balance Sheet

Students will become conversant in executing Classroom by WRDS web queries to download financial data. They will also validate the balance of assets and liabilities/equity in a company's balance sheet.

Statement of Cash Flows

Students will become conversant in executing web queries to download financial data. They will also become familiar with key components of a company's statement of cash flows. 

Linking Financial Statements

Publicly traded companies disclose their financial information in the form of a balance sheet, income statement, and statement of cash flows. How exactly are these financial statements related to each other? This teaching tool guides students through a basic exercise with a real company to discover just how the statements are interrelated.

Financial Ratios Visualization

Using the interactive application, students will learn how to generate and compare financial ratios to one another and to baseline industry measures. They will be introduced to ratios in the following categories: valuation, profitability, capitalization, financial soundness, solvency, liquidity, and efficiency. Students can select individual companies or entire industries from the S&P 500 universe.

Firm Liquidity Ratios

Students will learn about four financial ratios used to determine liquidity: (1) the cash conversion cycle; (2) cash ratio; (3) current ratio; and (4) quick ratio (acid-test). While comparing ratios between companies from different industry sectors, students consider how different factors influence the analysis. The tool makes visual comparisons easy, as students use detailed graphs to consider ratios in the context of relevant industry sectors.

Three Levers of Performance

This exercise will acquaint students with the different methods that companies use to deliver financial performance to their shareholders. One of the most popular metrics for performance is ROE, which is a measure of how much the company earns per share invested.

Portfolio Diversification

Students will understand how diversification works and the necessary steps required for achieving a diversified portfolio. They will learn concepts such as return, variance, standard deviation, and correlation. Students will also develop knowledge of the portfolio efficient frontier. Finally, they will develop skills in handling data, writing basic functions, and producing graphs in Excel.

Beta Visualization

Two important and related measures that arise from the Capital Asset Pricing Model are beta and R2. In this teaching tool, students conduct an exercise using the Beta Visualization application to examine, compare, and interpret these important measures of equity risk.

Market and Firm-Specific Risk

This teaching tool extends the Beta Visualization tool by focusing on alpha as defined in the Capital Asset Pricing Model. Students will learn how to interpret alpha and beta in the context of firm-specific and market risk. They will also become acquainted with R2 and the importance of model fit. The assignment guides students through the process of locating stocks with high/low alphas, and then interpreting the results.

Portfolio Risk Over Time

Students will learn how to use returns and a measure of risk such as standard deviation to execute a stock-selection strategy. They will become conversant in building and executing web queries, and validating the output. Excel skills are also developed, as students are challenged to manage their data from a raw format to a more structured and presentable one.

Mechanics of Diversification

This teaching tool includes three different activities designed to teach students about asset variance, covariance and the significance of positive and negative correlation. For example, students visualize a stock portfolio's total risk as they increase the number of stocks.

CAPM Equity Valuation

Students will gain a working knowledge and understanding of the Capital Asset Pricing Model (CAPM). They will also develop intermediate Excel skills by building a regression model in the software. Students can select to use either stock or Exchange-Traded Fund (ETF) returns. Both slide decks provide step-by-step instructions for running the regression using Excel.

Fama-French Three-Factor Analysis

Students learn how to perform a multiple linear regression using exchange-traded fund (ETF) returns and the Fama-French market, size, and value factors. Detailed instructions are provided to guide students through the process in Excel. Examining the data, students analyze how well fund excess returns are explained by the Fama-French factors.

Estimating Volatility

In this exercise, students will learn to do the following:

  • Identify volatility clustering using appropriate measures and graphs.
  • Estimate the econometric model using MATLAB.
  • Interpret model coefficients and graphs.
  • Run statistical tests on the return series to investigate how well the model fits the data.

Mutual Fund Turnover

The objective of this exercise is to understand mutual fund turnover and its tax implications by conducting an Excel-based assignment.

Efficient Frontier

Using the interactive platform, students will learn how risk and return characteristics change as stocks are added and removed from a hypothetical portfolio. They will be introduced to such concepts as the efficient frontier, capital market line, and indifference curve.

Internal Rate of Return

Learn how the internal rate of return (IRR) is defined and calculated, how to use it in comparison with cost of capital, and how to understand its shortcomings when comparing among different investment decisions. Only basic knowledge of corporate finance and budgeting tools is required. Students will also gain experience using Excel.

Time Value of Money: Compound Interest

Students will understand the distinction between simple and compound interest, as well as how time, rates, and compounding frequency affect the future value of an investment.

Time Value of Money: Present and Future Value

Students will understand the relationship between present value and future value and learn to compare cash flows at different points in time.

Aggregate Demand and Aggregate Supply

Given a list of possible scenarios, students learn how each macroeconomic event shifts the aggregate-demand and aggregate-supply curves. Students are also asked to consider the effects of the changing equilibrium.

Purchasing Power Parity (PPP) GDP

Students will learn the theory of purchasing power parity (PPP) and why economists use PPP GDP to compare GDP across countries. After completion of an assignment, they will also become familiar with some of the macroeconomic data available in the Penn World Table.

Fiscal Policy: Multiplier Effect

The Multiplier Effect tool depicts how the government-induced chain of spending accumulates and results in an amplified change in GDP. Students will learn how the multiplier is calculated and how it works over time. They will also understand how the marginal propensity to consume (MPC) relates to the multiplier, and how the government spending multiplier differs from the tax multiplier.

Treasury Yield Curve

How is the U.S. Treasury yield curve used as a benchmarking and forecasting tool? Through the course of this assignment, students will learn to recognize different yield curve shapes and how these shapes may be viewed as indicators of macroeconomic conditions.

Introduction to Text Analysis

Designed to introduce basic concepts of text analysis, this teaching tool generates a word cloud as a visualization of word frequency distribution. Students learn about commonly used methods for preparing digital text for analysis by selecting different options on the interactive tool and seeing what happens to the word cloud as different text processing methods are applied.

Introduction to Sentiment Analysis

How does sentiment analysis work? What criteria is used to determine text polarity? In an engaging exercise using song lyrics, students participate in a demonstration of how text can be classified as positive, negative or neutral.

Sentiment Analysis Lexicons

While there are many advanced approaches to sentiment analysis, a basic understanding of the creation and use of sentiment lexicons is important foundational knowledge in the field. Students are asked to use an interactive application to investigate how selecting different sentiment lexicons changes the sentiment analysis of the sample text.

Named-Entity Recognition

In this teaching tool, students learn what NER is, as well as some of its applications. Students will be introduced to some of the features that NER systems use in the decision making process, such as wordshape, part-of-speech (POS) tagging, and the use of neighboring words. Students will also be asked to consider some of the challenges faced in the NER process.

Machine Learning: Text Classification

An overview of supervised machine learning is presented, followed by a step-by-step explanation of how a naïve Bayes classifier works for text classification. Topics covered include some of the parameters used for evaluating classifiers, as well as the tf-idf weighting strategy commonly used in text analysis.