WALL STREET PREP PREMIUM EXAM:TRANSACTION COMPS
MODELING WALL STREET PREP EXAM QUESTIONS WITH CORRECT
ANSWERS
What Mis Mgenerally Mnot Mconsidered Mto Mbe Ma Mpre-tax Mnon-recurring M(unusual Mor
Minfrequent) Mitem? M- Mcorrect Manswer-Extraordinary Mgains/losses
what Mis Mfalse Mabout Mdepreciation Mand Mamortization M-
Mcorrect Manswer- MD&A Mmay Mbe Mclassified Mwithin Minterest
Mexpense
Company M X's M current M assets M increased Mby M$40 M million Mfrom M2007-
2008 Mwhile Mthe Mcompanies Mcurrent Mliabilities Mincreased Mby M$25 Mmillion Mover Mthe Msame
Mperiod. Mthe Mcash Mi Mmpact Mof Mthe Mchange Min Mworking Mcapital Mwas M- Mcorrect Manswer-
a Mdecrease Mof M15 Mmillion
the Mfinal Mcomponent Mof Man Mearnings Mprojection Mmodel Mis Mcalculating Minterest Mexpense.
Mthe Mcalculation Mma M y Mcreate Ma Mcircular Mreference Mbecause M- Mcorrect Manswer-
interest Mexpense Maffects Mnet Mincome, Mwhich Maffects MFCF, Mwhich Maffects Mthe Mamount Mof
Mdebt Ma Mcompany Mpa Mys Mdown, Mwhich, Min Mturn Maffects Mthe Minterest Mexpense, Mhence
Mthe Mcircular Mreference
a M10-q Mfinancial Mfiling Mhas Mall Mof Mthe Mfollowing Mcharacteristics Mexcept M-
Mcorrect Manswer- Missued Mfour Mtimes Ma Myear.
Depreciation MExpense Mfound Min Mthe MSG&AHline Mof Mthe Mincome Mstatement Mfor Ma
Mmanufacturing Mfirm Mwould Mmost Mlikely Mbe Mattributable Mto Mwhich Mof Mthe Mfollowing M-
Mcorrect Manswer-
computers Mused Mby M the Maccounting Mdepartment
If Ma Mcompany Mhas Mprojected Mrevenues Mof M$10 Mbillion, Ma Mgross Mprofit Mmargin Mof M65%,
, Mand Mprojected MSG&A Mexpenses Mof M$2billion, Mwhat Mis Mthe Mcompany's Moperating M(EBIT)
Mmargin? M- Mcorrect Manswer-45%
A Mcompany Mhas Mthe Mfollowing Minformation, M1. M2014 Mrevenues Mof M$5 Mbillion,2013
MAccounts Mreceivable Mof M$ M400 Mmillion, M2014 Maccounts Mreceivable Mof M$600 Mmillion,
Mwhat Mare Mthe Mdays Msales Moutstanding M-
correct M answer-36.5
MODELING WALL STREET PREP EXAM QUESTIONS WITH CORRECT
ANSWERS
What Mis Mgenerally Mnot Mconsidered Mto Mbe Ma Mpre-tax Mnon-recurring M(unusual Mor
Minfrequent) Mitem? M- Mcorrect Manswer-Extraordinary Mgains/losses
what Mis Mfalse Mabout Mdepreciation Mand Mamortization M-
Mcorrect Manswer- MD&A Mmay Mbe Mclassified Mwithin Minterest
Mexpense
Company M X's M current M assets M increased Mby M$40 M million Mfrom M2007-
2008 Mwhile Mthe Mcompanies Mcurrent Mliabilities Mincreased Mby M$25 Mmillion Mover Mthe Msame
Mperiod. Mthe Mcash Mi Mmpact Mof Mthe Mchange Min Mworking Mcapital Mwas M- Mcorrect Manswer-
a Mdecrease Mof M15 Mmillion
the Mfinal Mcomponent Mof Man Mearnings Mprojection Mmodel Mis Mcalculating Minterest Mexpense.
Mthe Mcalculation Mma M y Mcreate Ma Mcircular Mreference Mbecause M- Mcorrect Manswer-
interest Mexpense Maffects Mnet Mincome, Mwhich Maffects MFCF, Mwhich Maffects Mthe Mamount Mof
Mdebt Ma Mcompany Mpa Mys Mdown, Mwhich, Min Mturn Maffects Mthe Minterest Mexpense, Mhence
Mthe Mcircular Mreference
a M10-q Mfinancial Mfiling Mhas Mall Mof Mthe Mfollowing Mcharacteristics Mexcept M-
Mcorrect Manswer- Missued Mfour Mtimes Ma Myear.
Depreciation MExpense Mfound Min Mthe MSG&AHline Mof Mthe Mincome Mstatement Mfor Ma
Mmanufacturing Mfirm Mwould Mmost Mlikely Mbe Mattributable Mto Mwhich Mof Mthe Mfollowing M-
Mcorrect Manswer-
computers Mused Mby M the Maccounting Mdepartment
If Ma Mcompany Mhas Mprojected Mrevenues Mof M$10 Mbillion, Ma Mgross Mprofit Mmargin Mof M65%,
, Mand Mprojected MSG&A Mexpenses Mof M$2billion, Mwhat Mis Mthe Mcompany's Moperating M(EBIT)
Mmargin? M- Mcorrect Manswer-45%
A Mcompany Mhas Mthe Mfollowing Minformation, M1. M2014 Mrevenues Mof M$5 Mbillion,2013
MAccounts Mreceivable Mof M$ M400 Mmillion, M2014 Maccounts Mreceivable Mof M$600 Mmillion,
Mwhat Mare Mthe Mdays Msales Moutstanding M-
correct M answer-36.5
