Page 1 of 17
2026 FINANCIAL STATEMENT MODELING
FROM WALL STREET PREP FINAL EXAM
COMPLETE CURRENT TESTING QUESTIONS
AND DETAILED CORRECT ANSWERS
(VERIFIED) GUARANTEED PASS/TOP-RATED
A+.
FSM
Maximize your success on the Financial Statement Modeling
Final Exam from Wall Street Prep with focused preparation that
strengthens your ability to construct fully integrated, three-
statement financial models, project future performance, and
analyze valuation outputs from scratch. It is specifically
designed for finance professionals and analysts to validate their
expertise in building dynamic, driver-based models used in
corporate finance and equity research.
Which are the two points that identify the break even unit
sales? ✓ ✓...... ANSWER ....... 1. Where the Sales
revenue line crosses the Total costs line
2. Where accounting profit hits zero and changes from
negative to positive
, Page 2 of 17
What is the formula for accounting profit? ✓ ✓......
ANSWER ....... Revenue - Total Costs, because
Describe and Explain the relationship between NPV and Year
1 Unit Sales ✓ ✓...... ANSWER ....... They have a direct
relationship because PV of Net cash flows rises as year 1
unit sales rises
Is NPV more sensitive to Year 1 Unit sales or year 2 sales
growth rate? ✓ ✓...... ANSWER ....... NPV is more
sensitive to growth rate because growth rate is compounded
List the general steps used to forecast the financial
statements ✓ ✓...... ANSWER ....... 1. Use financial
statements to find which income statement items and
balance sheet items are close to being a constant
percentage of sales and which aren't
2 Forecast sales
3. Apply average historic percentage of sales to generate
most of the income statement and balance sheet
4. Use forecasting to generate the rest of teh statements
, Page 3 of 17
5. Make balance sheet balance by calculating longer term
debt
6. Raise or lower the portion of equity relatiev to the portion
of debt by raising/lowering paid in capital
List 6 major individual income statement and balance sheet
items that are not constant percentages of sales ✓ ✓......
ANSWER ....... 1. Depreciation
2. Interest Expense
3. Taxes
4. Property Plant and Equipment
5. Short Term Debt
6. Long term debt
Fully describe and explain the relationship between external
funds needed and sales growth rate ✓ ✓...... ANSWER .......
External funds needed is very sensitive to sales growth rate,
they have a positive linear relationship because most items
are a percentage of sales
2026 FINANCIAL STATEMENT MODELING
FROM WALL STREET PREP FINAL EXAM
COMPLETE CURRENT TESTING QUESTIONS
AND DETAILED CORRECT ANSWERS
(VERIFIED) GUARANTEED PASS/TOP-RATED
A+.
FSM
Maximize your success on the Financial Statement Modeling
Final Exam from Wall Street Prep with focused preparation that
strengthens your ability to construct fully integrated, three-
statement financial models, project future performance, and
analyze valuation outputs from scratch. It is specifically
designed for finance professionals and analysts to validate their
expertise in building dynamic, driver-based models used in
corporate finance and equity research.
Which are the two points that identify the break even unit
sales? ✓ ✓...... ANSWER ....... 1. Where the Sales
revenue line crosses the Total costs line
2. Where accounting profit hits zero and changes from
negative to positive
, Page 2 of 17
What is the formula for accounting profit? ✓ ✓......
ANSWER ....... Revenue - Total Costs, because
Describe and Explain the relationship between NPV and Year
1 Unit Sales ✓ ✓...... ANSWER ....... They have a direct
relationship because PV of Net cash flows rises as year 1
unit sales rises
Is NPV more sensitive to Year 1 Unit sales or year 2 sales
growth rate? ✓ ✓...... ANSWER ....... NPV is more
sensitive to growth rate because growth rate is compounded
List the general steps used to forecast the financial
statements ✓ ✓...... ANSWER ....... 1. Use financial
statements to find which income statement items and
balance sheet items are close to being a constant
percentage of sales and which aren't
2 Forecast sales
3. Apply average historic percentage of sales to generate
most of the income statement and balance sheet
4. Use forecasting to generate the rest of teh statements
, Page 3 of 17
5. Make balance sheet balance by calculating longer term
debt
6. Raise or lower the portion of equity relatiev to the portion
of debt by raising/lowering paid in capital
List 6 major individual income statement and balance sheet
items that are not constant percentages of sales ✓ ✓......
ANSWER ....... 1. Depreciation
2. Interest Expense
3. Taxes
4. Property Plant and Equipment
5. Short Term Debt
6. Long term debt
Fully describe and explain the relationship between external
funds needed and sales growth rate ✓ ✓...... ANSWER .......
External funds needed is very sensitive to sales growth rate,
they have a positive linear relationship because most items
are a percentage of sales
