CFA Level 2 vignette fact isolation drill
Fact isolation means extracting the evidence needed for the specific question from a vignette. Read the requested output, tag the relevant date and units, choose the method, and leave unrelated case facts out of the calculation.
The key ideas, at a glance
Requested output
Read the visual, then follow the worked example below. Use the stated case assumptions.
Illustrative worked case
Does this fact enter the stated EPS calculation?
Net income 12m and shares 4m
Use 12m / 4m = 3 per share
Revenue 80m and debt 30m
Exclude from the direct EPS numerator / denominator
The case supplies the net income and share-count assumptions. A larger exhibit does not require more inputs.
| Concept | Rule or decision | Common mistake |
|---|---|---|
| Requested output | Write down whether the question asks for value, return, a ratio or a conclusion. | A correct calculation for a different output still answers the wrong question. |
| Relevant exhibit | Find the inputs at the date and for the entity the question specifies. | Do not mix forecast and historical inputs without a justified adjustment. |
| Units and ownership | Distinguish total from per-share amounts and firm from equity measures. | A million-unit exhibit and a per-share answer require an explicit conversion. |
| Evidence check | Tie the result back to the cited inputs and assumptions. | Extra facts in a vignette need not enter every answer. |
01Requested output
Write down whether the question asks for value, return, a ratio or a conclusion.
Watch for: A correct calculation for a different output still answers the wrong question.
02Relevant exhibit
Find the inputs at the date and for the entity the question specifies.
Watch for: Do not mix forecast and historical inputs without a justified adjustment.
03Units and ownership
Distinguish total from per-share amounts and firm from equity measures.
Watch for: A million-unit exhibit and a per-share answer require an explicit conversion.
04Evidence check
Tie the result back to the cited inputs and assumptions.
Watch for: Extra facts in a vignette need not enter every answer.
Selected 2026 study concepts. Match your preparation to your registered exam-year curriculum. These notes are not complete curriculum coverage.
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Put the method to work
One worked example, from facts to answer
Given
A case reports forecast net income of 12 million, revenue of 80 million, debt of 30 million and 4 million shares. The ask is forecast EPS.
Method
Use forecast net income and share count: 12 million / 4 million shares.
Answer and interpretation
Forecast EPS is 3 per share under the stated share-count assumption. Revenue and debt are not direct inputs to this EPS calculation.
Original independent teaching example. Assumptions are stated above; this is not an official exam question or scoring key.
Apply the framework, step by step
Solve one requested output from a larger case by selecting evidence, dates and units. This is a reading-and-calculation drill; broader valuation methods remain with their topic lessons.
Before you start: The relevant topic’s model, exhibit reading and the distinction between total, per-share, historical and forecast amounts.
METHOD 01
Requested output
Write down whether the question asks for value, return, a ratio or a conclusion.
Read the question’s requested output and qualifiers before collecting numbers. An equity price, operating enterprise value, forecast EPS and credit loss are different tasks even when they appear in the same case. Mark the entity, date and unit the output requires. This creates a short evidence checklist and reduces the temptation to use every prominent number in the vignette.
Avoid this mistake: A correct calculation for a different output still answers the wrong question.
METHOD 02
Relevant exhibit
Find the inputs at the date and for the entity the question specifies.
Find the exhibit that supplies the necessary inputs and check its date and basis. A table may contain both historical and forecast values or report amounts in thousands while the question asks for millions. Identify what is already adjusted and what still needs conversion. If the case states a model assumption, carry it through the calculation rather than replacing it with a familiar outside convention.
Avoid this mistake: Do not mix forecast and historical inputs without a justified adjustment.
METHOD 03
Units and ownership
Distinguish total from per-share amounts and firm from equity measures.
Write the model before substituting inputs. Firm cash flow cannot be turned directly into an equity price without the claim adjustments, and total income cannot become EPS without an appropriate share count. Cancel the units in intermediate steps and keep signs visible. Exclude irrelevant facts only after determining that they are not direct inputs or necessary adjustments for the requested output.
Avoid this mistake: A million-unit exhibit and a per-share answer require an explicit conversion.
METHOD 04
Evidence check
Tie the result back to the cited inputs and assumptions.
After calculating, reread the question and check whether the answer fits the requested claim, date and units. A plausible magnitude can still conceal a wrong model. When reviewing an error, label the cause: selecting the wrong fact, missing an adjustment, using a wrong period, mixing units or making an arithmetic error. That diagnosis tells you whether the next practice task should focus on reading or on the underlying method.
Avoid this mistake: Extra facts in a vignette need not enter every answer.
Apply it to a different case
- New facts
- A case gives operating enterprise value of 500 million, excess cash of 20 million, debt of 150 million, revenue of 900 million and 10 million shares. It asks for equity value per share; there are no other claims.
- Working
- Equity value = 500 + 20 - 150 = 370 million. Divide by 10 million shares.
- Conclusion
- Equity value is 37 per share. Revenue is not a direct input to this stated enterprise-to-equity bridge.
Original teaching case under the stated assumptions, rather than an official exam question.
Questions about this method
- Should I use every number in a CFA vignette?
- No. Use the facts required by the specific question and model, including any necessary adjustments. A vignette can support several different questions, so some facts are irrelevant to a particular output.
- Is reading the question first an official requirement?
- No. It is an editorial practice method for focusing the evidence search. Use the sequence that helps you answer accurately, while following the official exam instructions.
- What should my error log record?
- Record the requested output, the fact or assumption you missed, the corrected model and the reason for the miss. Distinguish interpretation errors from calculation errors so the retest targets the actual weakness.
Sources and curriculum scope
Official outlines establish curriculum scope. The explanations and worked examples are independent teaching material; the sources do not verify or endorse them.
- 2026 CFA Level 2 curriculum outline
- Official Level 2 format and curriculum
- 2027 CFA Level 2 curriculum outline
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