WALL STREET PREP FINANCIAL
MODELING EXAMPREP REVIEW SHEET
TESTED QUESTIONS AND ACCURATE
ANSWERS
●● what is false about depreciation and amortization
Answer: D&A may be classified within interest expense
●● Company X's current assets increased by $40 million from 2007-
2008 while the companies current liabilities increased by $25 million
over the same period. the cash impact of the change in working capital
was
Answer: a decrease of 15 million
●● the final component of an earnings projection model is calculating
interest expense. the calculation may create a circular reference because
Answer: interest expense affects net income, which affects FCF, which
affects the amount of debt a company pays down, which, in turn affects
the interest expense, hence the circular reference
●● a 10-q financial filing has all of the following characteristics except
Answer: issued four times a year.
,●● Depreciation Expense found in the SG&A line of the income
statement for a manufacturing firm would most likely be attributable to
which of the following
Answer: computers used by the accounting department
●● If a company has projected revenues of $10 billion, a gross profit
margin of 65%, and projected SG&A expenses of $2billion, what is the
company's operating (EBIT) margin?
Answer: 45%
●● A company has the following information, 1. 2014 revenues of $5
billion,2013 Accounts receivable of $400 million, 2014 accounts
receivable of $600 million, what are the days sales outstanding
Answer: 36.5
●● A company has the following information:
• 2014 Revenues of $8 billion
• 2014 COGS of $5 billion
• 2013 Accounts receivable of $400 million
• 2014 Accounts receivable of $600 million
• 2013 Inventories of $1 billion
• 2014 Inventories of $800 million
• 2013 Accounts payable of $250 million
• 2014 Accounts payable of $300 million
, What are the inventory days for the company?
Answer: 65.7 days
●● Which of the following is true
Answer: Coca Cola's brand name is not reflected as an intangible asset
on its balance sheet
●● A company has the following information:
• 2014 share repurchase plan of $4 billion
• Average share price of $60 for the year 2013
• Expected EPS growth for 2014 of 10%
What should the number of shares repurchased by the company be in
your financial model?
Answer: 60.6 million
●● non-controlling interest
Answer: is an expense on the income statement and equity o the balance
sheet
●● A company has the following information:
• 2013 retained earnings balance of $12 billion
• Net income of $3.5 billion in 2014
• Capex of $200 million in 2014
MODELING EXAMPREP REVIEW SHEET
TESTED QUESTIONS AND ACCURATE
ANSWERS
●● what is false about depreciation and amortization
Answer: D&A may be classified within interest expense
●● Company X's current assets increased by $40 million from 2007-
2008 while the companies current liabilities increased by $25 million
over the same period. the cash impact of the change in working capital
was
Answer: a decrease of 15 million
●● the final component of an earnings projection model is calculating
interest expense. the calculation may create a circular reference because
Answer: interest expense affects net income, which affects FCF, which
affects the amount of debt a company pays down, which, in turn affects
the interest expense, hence the circular reference
●● a 10-q financial filing has all of the following characteristics except
Answer: issued four times a year.
,●● Depreciation Expense found in the SG&A line of the income
statement for a manufacturing firm would most likely be attributable to
which of the following
Answer: computers used by the accounting department
●● If a company has projected revenues of $10 billion, a gross profit
margin of 65%, and projected SG&A expenses of $2billion, what is the
company's operating (EBIT) margin?
Answer: 45%
●● A company has the following information, 1. 2014 revenues of $5
billion,2013 Accounts receivable of $400 million, 2014 accounts
receivable of $600 million, what are the days sales outstanding
Answer: 36.5
●● A company has the following information:
• 2014 Revenues of $8 billion
• 2014 COGS of $5 billion
• 2013 Accounts receivable of $400 million
• 2014 Accounts receivable of $600 million
• 2013 Inventories of $1 billion
• 2014 Inventories of $800 million
• 2013 Accounts payable of $250 million
• 2014 Accounts payable of $300 million
, What are the inventory days for the company?
Answer: 65.7 days
●● Which of the following is true
Answer: Coca Cola's brand name is not reflected as an intangible asset
on its balance sheet
●● A company has the following information:
• 2014 share repurchase plan of $4 billion
• Average share price of $60 for the year 2013
• Expected EPS growth for 2014 of 10%
What should the number of shares repurchased by the company be in
your financial model?
Answer: 60.6 million
●● non-controlling interest
Answer: is an expense on the income statement and equity o the balance
sheet
●● A company has the following information:
• 2013 retained earnings balance of $12 billion
• Net income of $3.5 billion in 2014
• Capex of $200 million in 2014
