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FINANCIAL STATEMENT MODELING RETAKE ACTUAL EXAM (NEW
UPDATED VERSION) LATEST ACTUAL EXAM QUESTIONS AND CORRECT ANSWERS
(VERIFIED QUESTIONS AND ANSWERS) | GUARANTEED PASS A+ UPDATED THIS
YEAR
1. If a company’s revenue grows from $100 million to $120 million in one year, what is the revenue growth
rate?
A) 15%
B) 20%
C) 25%
D) 10%
Answer: B) 20%
Explanation: Growth rate = (120 - 100)/100 × 100% = 20%
2. If COGS is $50 million and revenue is $100 million, what is the gross margin?
A) 25%
B) 50%
C) 60%
D) 40%
Answer: B) 50%
Explanation: Gross margin = (Revenue - COGS)/Revenue = (100-50)/100 = 50%
3. A company has net income of $10 million and average total assets of $50 million. What is ROA?
A) 10%
B) 15%
C) 20%
D) 25%
Answer: A) 20%
Explanation: ROA = Net Income / Total Assets = 10/50 = 0.2 → 20%
2026 2027 GRADED A+
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4. Which item is not included in operating cash flow?
A) Depreciation expense
B) Change in accounts receivable
C) Interest expense
D) Cash paid to suppliers
Answer: C) Interest expense
Explanation: Operating cash flow includes working capital changes and non-cash charges, but
interest is in financing (unless using direct method with adjustments).
5. A company’s beginning cash is $5 million. Operating cash flow is $3 million, investing cash flow is -$2
million, financing cash flow is $1 million. Ending cash = ?
A) $5 million
B) $7 million
C) $8 million
D) $6 million
Answer: C) $7 million
Explanation: Ending cash = 5 + 3 - 2 + 1 = 7
6. If a company’s depreciation expense increases by $1 million, how does it affect free cash flow (FCF)?
A) FCF decreases by $1 million
B) FCF increases by $1 million
C) No effect on FCF
D) FCF decreases by tax-adjusted amount
Answer: B) FCF increases by $1 million
Explanation: Depreciation is a non-cash expense, so increasing it raises operating cash flow and
FCF.
7. What is the correct formula for EBITDA?
A) Net Income + Interest + Taxes + Depreciation + Amortization
B) Operating Income - Depreciation
C) Revenue - COGS - SG&A
D) Cash Flow from Operations + CapEx
Answer: A) Net Income + Interest + Taxes + Depreciation + Amortization
2026 2027 GRADED A+
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8. When forecasting revenue using a growth rate, which assumption is critical?
A) Past growth is indicative of future growth
B) Depreciation remains fixed
C) Interest rates are constant
D) Inventory does not change
Answer: A) Past growth is indicative of future growth
9. A company has the following data:
• Revenue: $200 million
• COGS: $120 million
• SG&A: $40 million
• Depreciation: $10 million
• Tax rate: 25%
Calculate net income.
A) $20 million
B) $15 million
C) $22.5 million
D) $25 million
Answer: B) $15 million
Explanation:
Operating Income = Revenue - COGS - SG&A - Depreciation = 200-120-40-10 = 30
Taxes = 30 × 25% = 7.5
Net Income = 30 - 7.5 = 22.5 Wait—let’s double-check.
Step by step:
• Revenue: 200
• COGS: 120 → 200-120 = 80
• SG&A: 40 → 80-40 = 40
• Depreciation: 10 → 40-10 = 30 (Operating Income)
• Taxes 25% → 30 × 0.25 = 7.5
• Net Income = 30 - 7.5 = 22.5
Correct answer: C) $22.5 million
2026 2027 GRADED A+
FINANCIAL STATEMENT MODELING RETAKE ACTUAL EXAM (NEW
UPDATED VERSION) LATEST ACTUAL EXAM QUESTIONS AND CORRECT ANSWERS
(VERIFIED QUESTIONS AND ANSWERS) | GUARANTEED PASS A+ UPDATED THIS
YEAR
1. If a company’s revenue grows from $100 million to $120 million in one year, what is the revenue growth
rate?
A) 15%
B) 20%
C) 25%
D) 10%
Answer: B) 20%
Explanation: Growth rate = (120 - 100)/100 × 100% = 20%
2. If COGS is $50 million and revenue is $100 million, what is the gross margin?
A) 25%
B) 50%
C) 60%
D) 40%
Answer: B) 50%
Explanation: Gross margin = (Revenue - COGS)/Revenue = (100-50)/100 = 50%
3. A company has net income of $10 million and average total assets of $50 million. What is ROA?
A) 10%
B) 15%
C) 20%
D) 25%
Answer: A) 20%
Explanation: ROA = Net Income / Total Assets = 10/50 = 0.2 → 20%
2026 2027 GRADED A+
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4. Which item is not included in operating cash flow?
A) Depreciation expense
B) Change in accounts receivable
C) Interest expense
D) Cash paid to suppliers
Answer: C) Interest expense
Explanation: Operating cash flow includes working capital changes and non-cash charges, but
interest is in financing (unless using direct method with adjustments).
5. A company’s beginning cash is $5 million. Operating cash flow is $3 million, investing cash flow is -$2
million, financing cash flow is $1 million. Ending cash = ?
A) $5 million
B) $7 million
C) $8 million
D) $6 million
Answer: C) $7 million
Explanation: Ending cash = 5 + 3 - 2 + 1 = 7
6. If a company’s depreciation expense increases by $1 million, how does it affect free cash flow (FCF)?
A) FCF decreases by $1 million
B) FCF increases by $1 million
C) No effect on FCF
D) FCF decreases by tax-adjusted amount
Answer: B) FCF increases by $1 million
Explanation: Depreciation is a non-cash expense, so increasing it raises operating cash flow and
FCF.
7. What is the correct formula for EBITDA?
A) Net Income + Interest + Taxes + Depreciation + Amortization
B) Operating Income - Depreciation
C) Revenue - COGS - SG&A
D) Cash Flow from Operations + CapEx
Answer: A) Net Income + Interest + Taxes + Depreciation + Amortization
2026 2027 GRADED A+
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8. When forecasting revenue using a growth rate, which assumption is critical?
A) Past growth is indicative of future growth
B) Depreciation remains fixed
C) Interest rates are constant
D) Inventory does not change
Answer: A) Past growth is indicative of future growth
9. A company has the following data:
• Revenue: $200 million
• COGS: $120 million
• SG&A: $40 million
• Depreciation: $10 million
• Tax rate: 25%
Calculate net income.
A) $20 million
B) $15 million
C) $22.5 million
D) $25 million
Answer: B) $15 million
Explanation:
Operating Income = Revenue - COGS - SG&A - Depreciation = 200-120-40-10 = 30
Taxes = 30 × 25% = 7.5
Net Income = 30 - 7.5 = 22.5 Wait—let’s double-check.
Step by step:
• Revenue: 200
• COGS: 120 → 200-120 = 80
• SG&A: 40 → 80-40 = 40
• Depreciation: 10 → 40-10 = 30 (Operating Income)
• Taxes 25% → 30 × 0.25 = 7.5
• Net Income = 30 - 7.5 = 22.5
Correct answer: C) $22.5 million
2026 2027 GRADED A+
