LBO Modeling Exam//Wall Street
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What is generally not considered to be a pre-tax non-recurring
(unusual or infrequent) item? ✔️✔️correct answer-
Extraordinary gains/losses
what is false about depreciation and amortization ✔️✔️correct
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 ✔️✔️correct 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 ✔️✔️correct 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 ✔️✔️correct 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 ✔️✔️correct answer-
computers used by the accounting department
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?
✔️✔️correct answer-15 billion
in order to find out how much cash is available to pay down
short term debt, such as revolving credit line, you must take
✔️✔️correct answer-beginning cash balance + pre-debt cash
flows - min. cash balance - required principal payments of LT
and other debt
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? ✔️✔️correct
answer-45%
Prep Premium//Latest 2024
version
What is generally not considered to be a pre-tax non-recurring
(unusual or infrequent) item? ✔️✔️correct answer-
Extraordinary gains/losses
what is false about depreciation and amortization ✔️✔️correct
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 ✔️✔️correct 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 ✔️✔️correct 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 ✔️✔️correct 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 ✔️✔️correct answer-
computers used by the accounting department
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?
✔️✔️correct answer-15 billion
in order to find out how much cash is available to pay down
short term debt, such as revolving credit line, you must take
✔️✔️correct answer-beginning cash balance + pre-debt cash
flows - min. cash balance - required principal payments of LT
and other debt
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? ✔️✔️correct
answer-45%
