FINANCIAL STATEMENT
MODELING EXAM QUESTIONS
K
C
AND CORRECT DETAILED /
LO
VERIFIED ANSWERS
YC
D
U
ST
, Which formula is used to check that a Balance Sheet has been built correctly? - ANS Total
Assets = Total Liabilities + Stockholders' Equity
How do you calculate Inventory Turns? - ANS COGS / Inventory
How do you calculate Days Sales Outstanding? - ANS Accounts Receivable / Revenue * 365
K
We can project prepaid expenses by assuming its percentage of... - ANS Revenue
How do you calculate Net Working Capital? - ANS Total non-cash current assets - Total
C
non-debt current liabilities
Depreciation is to PP&E as Amortization is to... - ANS Intangible Assets.
LO
We use this driver to project Capex: - ANS % of revenue
When calculating the ending balance of a line item in a projected year, we reference last year's
ending balance as the beginning balance (T or F) - ANS TRUE
YC
Beginning Intangible Balance is $10 million; Amortization = $1.5 million; Additions = $0.75
million. What is the ending balance? - ANS $9.25 million
Assuming Intangible Balance is 10.0 in C11, amortization is -1.5 in C12, and additions is 0.75 in
C13, how would you quickly calculate ending Tangible Balance in C14? - ANS Alt + =
D
In the Cash Flow Statement, we add back Depreciation and Amortization to Net Income
because... - ANS They are non-cash expenses
U
In what section of the cash flow statement does Capex belong? - ANS Investing
ST
Share repurchases decrease Stockholder's Equity (T or F) - ANS True
How do we project Dividends? - ANS Assumed Dividend Payout Ratio * Projected Net Income
How do we link the Cash Flow Statement (CFS) to the Balance Sheet (BS)? - ANS (CFS)
Ending Cash = (BS) Same Year's Cash Balance
Debt issuance decreases long-term debt (T or F) - ANS False
What is a revolver? - ANS A corporation's "credit card" that is used to finance working capital
needs
MODELING EXAM QUESTIONS
K
C
AND CORRECT DETAILED /
LO
VERIFIED ANSWERS
YC
D
U
ST
, Which formula is used to check that a Balance Sheet has been built correctly? - ANS Total
Assets = Total Liabilities + Stockholders' Equity
How do you calculate Inventory Turns? - ANS COGS / Inventory
How do you calculate Days Sales Outstanding? - ANS Accounts Receivable / Revenue * 365
K
We can project prepaid expenses by assuming its percentage of... - ANS Revenue
How do you calculate Net Working Capital? - ANS Total non-cash current assets - Total
C
non-debt current liabilities
Depreciation is to PP&E as Amortization is to... - ANS Intangible Assets.
LO
We use this driver to project Capex: - ANS % of revenue
When calculating the ending balance of a line item in a projected year, we reference last year's
ending balance as the beginning balance (T or F) - ANS TRUE
YC
Beginning Intangible Balance is $10 million; Amortization = $1.5 million; Additions = $0.75
million. What is the ending balance? - ANS $9.25 million
Assuming Intangible Balance is 10.0 in C11, amortization is -1.5 in C12, and additions is 0.75 in
C13, how would you quickly calculate ending Tangible Balance in C14? - ANS Alt + =
D
In the Cash Flow Statement, we add back Depreciation and Amortization to Net Income
because... - ANS They are non-cash expenses
U
In what section of the cash flow statement does Capex belong? - ANS Investing
ST
Share repurchases decrease Stockholder's Equity (T or F) - ANS True
How do we project Dividends? - ANS Assumed Dividend Payout Ratio * Projected Net Income
How do we link the Cash Flow Statement (CFS) to the Balance Sheet (BS)? - ANS (CFS)
Ending Cash = (BS) Same Year's Cash Balance
Debt issuance decreases long-term debt (T or F) - ANS False
What is a revolver? - ANS A corporation's "credit card" that is used to finance working capital
needs
