3 Statement Modeling (Cfi) Exam Questions And
Answers #12
What is the main goal of each financial statement? - correct answer Income: Measures
Profitability
Cashflow Statement: Assess Cashflow
Balance Sheet: Review assets and how they are financed
* Income and Cashflow show us whole period Balance sheet show us at a specific point
in time
How are the 3 financial statements connected? - correct answer IS connects to CFS
through Net Income
CFS connects to BS through Ending Cash
For Property Plant and Equipment on the balance sheet what is the formula to find it -
correct answer PP&E= PP&E (Prior Year)-Capital Expenditures-Depreciation
Two Important aspect of Financial Models - correct answer 1. Tool to assist with
decision making
2. Figures must be easy to understand
What is the model design - correct answer 1. Outputs
2. Statements
3. Equity
4. Debt
5. Income Tax
6. Assets
7. Depreciation
8. Working Capital
9. Costs
10. Revenue
11. Drivers
12. Inputs
What is the Preferred Model Layout - correct answer 1. Cover
2. Outputs (Dashboard)
3. Inputs (Drivers and inputs)
*This should be the main presentation
4. Appendix (Financial Statements, Operational Schedules, Capital Structure)
What order does CFI recommend when making the model? - correct answer 1. Outputs
2. Statements
, 3. Taxes
4. Drivers
Which of the following are true about Model Drivers?
- We isolate the drivers so that we can test how the model reacts to them
- Little to no understanding of the company is required when choosing drivers
- Drivers only impact the outputs/dashboard of the model
- Drivers are volatile and have a large impact on the model - correct answer 1. We
isolate the drivers so that we can test how the model reacts to them
2. Drivers are volatile and have a large impact on the model
Give a characteristic of Drivers on the model - correct answer They are volatile and
have a material impact on the model outputs
They are relatively important
Operational Schedules are used to model... - correct answer The operational
movements of a business
What are the 6 important types of operational schedules - correct answer 1. Revenue
Schedule
2. Cost Schedule
3. Working Capital Schedule
4. Depreciation Schedule
5. Asset Schedule
6. Income Tax Schedule
What should you build first before the capital structure - correct answer Operational
Schedule
Define Capital Structure - correct answer Mixture of debt and equity a firm uses to
finance its self
Two types of debt a company can take on - correct answer 1. Term debt
2. Revolving Credit Line
Two types of equity a company can take on - correct answer 1. Common Shares
2. Preferred Shares
When determining capital structure what schedules do you create first? - correct answer
1. Debt Schedule
2. Equity Schedule
What are three types of techniques you can use to find errors in the balance sheet? -
correct answer 1. Finding Hardcodes (F5->Special->Constants-> Uncheck Texts)
Answers #12
What is the main goal of each financial statement? - correct answer Income: Measures
Profitability
Cashflow Statement: Assess Cashflow
Balance Sheet: Review assets and how they are financed
* Income and Cashflow show us whole period Balance sheet show us at a specific point
in time
How are the 3 financial statements connected? - correct answer IS connects to CFS
through Net Income
CFS connects to BS through Ending Cash
For Property Plant and Equipment on the balance sheet what is the formula to find it -
correct answer PP&E= PP&E (Prior Year)-Capital Expenditures-Depreciation
Two Important aspect of Financial Models - correct answer 1. Tool to assist with
decision making
2. Figures must be easy to understand
What is the model design - correct answer 1. Outputs
2. Statements
3. Equity
4. Debt
5. Income Tax
6. Assets
7. Depreciation
8. Working Capital
9. Costs
10. Revenue
11. Drivers
12. Inputs
What is the Preferred Model Layout - correct answer 1. Cover
2. Outputs (Dashboard)
3. Inputs (Drivers and inputs)
*This should be the main presentation
4. Appendix (Financial Statements, Operational Schedules, Capital Structure)
What order does CFI recommend when making the model? - correct answer 1. Outputs
2. Statements
, 3. Taxes
4. Drivers
Which of the following are true about Model Drivers?
- We isolate the drivers so that we can test how the model reacts to them
- Little to no understanding of the company is required when choosing drivers
- Drivers only impact the outputs/dashboard of the model
- Drivers are volatile and have a large impact on the model - correct answer 1. We
isolate the drivers so that we can test how the model reacts to them
2. Drivers are volatile and have a large impact on the model
Give a characteristic of Drivers on the model - correct answer They are volatile and
have a material impact on the model outputs
They are relatively important
Operational Schedules are used to model... - correct answer The operational
movements of a business
What are the 6 important types of operational schedules - correct answer 1. Revenue
Schedule
2. Cost Schedule
3. Working Capital Schedule
4. Depreciation Schedule
5. Asset Schedule
6. Income Tax Schedule
What should you build first before the capital structure - correct answer Operational
Schedule
Define Capital Structure - correct answer Mixture of debt and equity a firm uses to
finance its self
Two types of debt a company can take on - correct answer 1. Term debt
2. Revolving Credit Line
Two types of equity a company can take on - correct answer 1. Common Shares
2. Preferred Shares
When determining capital structure what schedules do you create first? - correct answer
1. Debt Schedule
2. Equity Schedule
What are three types of techniques you can use to find errors in the balance sheet? -
correct answer 1. Finding Hardcodes (F5->Special->Constants-> Uncheck Texts)
