CFI FMVA EXAM Questions AND Answers
CFI FMVA certification questions and answers (University of Nigeria, Nsukka)
,CFI FMVA EXAM QUESTIONS AND ANSWERS(ANSWERS IN RED)
You areconsidering an investment into Company XYZandneed to determinethe company's value and the
appropriate investment amount. You have been provided with historical financial statements for the past
three years in order to build a forecast model. Key assumptions to use include:
1.Future sales revenue is assumed to increase at 2.5% annually.
2.Gross margin for 2021E is assumed to be equal to the average gross margin % for 2019 and 2020,
but will decrease by 2.5% (i.e. 250 bps) each year thereafter.
3.SG&A expense is assumed to be a percentage of revenue for the forecast period. That percentage is
equal to the 2018-2020 average. SG&A Ratio = SG&A / Total Revenue
4.Depreciation expense is assumed to be a percentage of revenue for the forecast period. That
percentage is equal to the 2018-2020 average
5.The tax rate for the forecast period is assumed to be equal to the effective tax rate for 2018
6.Capital expenditures for any given year in the forecast period is assumed to be 3x the prior year's
depreciation expense. For example, 2021 capital expenditures is equal to 3x 2020 depreciation
expense.
7.No new debt or equity is assumed to be issued
8.For an individual: ETR = Total Tax ÷ Taxable Income. For a corporation: ETR = Total Tax ÷ Earnings
Before Taxes.
1
1.Whatis Gross Profit in 2028E using the assumptions listed above and on the Control Panel?
ReviewLater
$17,545 $27,780
,$30,704
$40,938
2
2.WhatisEBITDA in 2022E using the assumptions listed above and on the Control Panel?
ReviewLater
$14,625
$20,172
$18,911
$17,404
3
3.WhatisCash Generated From Operating Activities in 2025E using the assumptions listed above and
ontheControl Panel?
ReviewLater
$12,074
$12,379
$12,640
$13,523
4
4.Whatisthe PP&E balance in 2030E using the assumptions listed above and on the Control Panel?
ReviewLater
$122,220
$158,604
$136,122
, $148,922
5
5.Whatis the cash ratio in 2025E using the assumptions listed above and on the Control Panel?
ReviewLater
4.8x
4.9x
5.5x
5.4x
6
6.Whatisthe margin impact ratio in 2026E using the assumptions listed above and on the Control
Panel?
ReviewLater
0.35x
0.28x
0.19x
0.14x
7
7.Whatisthecash turnover ratio in 2029E using the assumptions listed above and on the Control Panel? Is
it higherorlower than the same ratio in 2020?
ReviewLater
0.30x; lower
1.79x; lower
0.56x; lower
CFI FMVA certification questions and answers (University of Nigeria, Nsukka)
,CFI FMVA EXAM QUESTIONS AND ANSWERS(ANSWERS IN RED)
You areconsidering an investment into Company XYZandneed to determinethe company's value and the
appropriate investment amount. You have been provided with historical financial statements for the past
three years in order to build a forecast model. Key assumptions to use include:
1.Future sales revenue is assumed to increase at 2.5% annually.
2.Gross margin for 2021E is assumed to be equal to the average gross margin % for 2019 and 2020,
but will decrease by 2.5% (i.e. 250 bps) each year thereafter.
3.SG&A expense is assumed to be a percentage of revenue for the forecast period. That percentage is
equal to the 2018-2020 average. SG&A Ratio = SG&A / Total Revenue
4.Depreciation expense is assumed to be a percentage of revenue for the forecast period. That
percentage is equal to the 2018-2020 average
5.The tax rate for the forecast period is assumed to be equal to the effective tax rate for 2018
6.Capital expenditures for any given year in the forecast period is assumed to be 3x the prior year's
depreciation expense. For example, 2021 capital expenditures is equal to 3x 2020 depreciation
expense.
7.No new debt or equity is assumed to be issued
8.For an individual: ETR = Total Tax ÷ Taxable Income. For a corporation: ETR = Total Tax ÷ Earnings
Before Taxes.
1
1.Whatis Gross Profit in 2028E using the assumptions listed above and on the Control Panel?
ReviewLater
$17,545 $27,780
,$30,704
$40,938
2
2.WhatisEBITDA in 2022E using the assumptions listed above and on the Control Panel?
ReviewLater
$14,625
$20,172
$18,911
$17,404
3
3.WhatisCash Generated From Operating Activities in 2025E using the assumptions listed above and
ontheControl Panel?
ReviewLater
$12,074
$12,379
$12,640
$13,523
4
4.Whatisthe PP&E balance in 2030E using the assumptions listed above and on the Control Panel?
ReviewLater
$122,220
$158,604
$136,122
, $148,922
5
5.Whatis the cash ratio in 2025E using the assumptions listed above and on the Control Panel?
ReviewLater
4.8x
4.9x
5.5x
5.4x
6
6.Whatisthe margin impact ratio in 2026E using the assumptions listed above and on the Control
Panel?
ReviewLater
0.35x
0.28x
0.19x
0.14x
7
7.Whatisthecash turnover ratio in 2029E using the assumptions listed above and on the Control Panel? Is
it higherorlower than the same ratio in 2020?
ReviewLater
0.30x; lower
1.79x; lower
0.56x; lower
