TRANSACTION COMPS MODELLING WALL STREET PREP
EXAM NEWEST 2024 ACTUAL EXAM ALL 50 QUESTIONS
AND CORRECT DETAILED ANSWERS WITH RATIONALES
|ALREADY GRADED A+
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
,TRANSACTION COMPS MODELLING WALL STREET PREP
EXAM NEWEST 2024 ACTUAL EXAM ALL 50 QUESTIONS
AND CORRECT DETAILED ANSWERS WITH RATIONALES
|ALREADY GRADED A+
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
• Preferred dividends of $100 million in 2014
• Common dividends of $400 million in 2014
What is the retained earnings balance at the end of 2014? - ANSWER--
15 billion
, TRANSACTION COMPS MODELLING WALL STREET PREP
EXAM NEWEST 2024 ACTUAL EXAM ALL 50 QUESTIONS
AND CORRECT DETAILED ANSWERS WITH RATIONALES
|ALREADY GRADED A+
in order to find out how much cash is available to pay down short term
debt, such as revolving credit line, you must take - ANSWER--
beginning cash balance + pre-debt cash flows - min. cash balance -
required principal payments of LT and other debt
to calculate interest expense in the future, you should do which of the
following - ANSWER--apply a weighted average interest rate times the
average debt balance over the course of the year
enterprise (transaction) value represents the: - ANSWER--value of all
capital invested in a business
A debt holder would be primarily concerned with which of the following
multiples?
I. Enterprise (Transaction) Value / EBITDA
II. Price/Earnings
III. Enterprise (Transaction) Value / Sales - ANSWER--1 and 3 only
On January 1, 2014, shares of Company X trade at $6.50 per share, with
400 million shares outstanding. The company has net debt of $300
million. After building an earnings model for Company X, you have
projected free cash flow for each year through 2020 as follows:
EXAM NEWEST 2024 ACTUAL EXAM ALL 50 QUESTIONS
AND CORRECT DETAILED ANSWERS WITH RATIONALES
|ALREADY GRADED A+
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
,TRANSACTION COMPS MODELLING WALL STREET PREP
EXAM NEWEST 2024 ACTUAL EXAM ALL 50 QUESTIONS
AND CORRECT DETAILED ANSWERS WITH RATIONALES
|ALREADY GRADED A+
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
• Preferred dividends of $100 million in 2014
• Common dividends of $400 million in 2014
What is the retained earnings balance at the end of 2014? - ANSWER--
15 billion
, TRANSACTION COMPS MODELLING WALL STREET PREP
EXAM NEWEST 2024 ACTUAL EXAM ALL 50 QUESTIONS
AND CORRECT DETAILED ANSWERS WITH RATIONALES
|ALREADY GRADED A+
in order to find out how much cash is available to pay down short term
debt, such as revolving credit line, you must take - ANSWER--
beginning cash balance + pre-debt cash flows - min. cash balance -
required principal payments of LT and other debt
to calculate interest expense in the future, you should do which of the
following - ANSWER--apply a weighted average interest rate times the
average debt balance over the course of the year
enterprise (transaction) value represents the: - ANSWER--value of all
capital invested in a business
A debt holder would be primarily concerned with which of the following
multiples?
I. Enterprise (Transaction) Value / EBITDA
II. Price/Earnings
III. Enterprise (Transaction) Value / Sales - ANSWER--1 and 3 only
On January 1, 2014, shares of Company X trade at $6.50 per share, with
400 million shares outstanding. The company has net debt of $300
million. After building an earnings model for Company X, you have
projected free cash flow for each year through 2020 as follows:
