Financial Statement Modeling Practice Exam Fully Solved With Verified Questions For Guaranteed Pass

◍ Beginning balance = $10M, Capex = $3M, Depreciation= $2M, COGS = $1M. What is the ending PP&E balance? Answer - $11M ◍ What does amortization pertain to? Answer - Intangibles ◍ How did we project out depreciation expense? Answer - As a % of capex ◍ In which section of the cash flow statement will capital raises be found? Answer - Cash flow from financing ◍ What items are included in the cash flow from operations section? Answer - Net Income, D&A, Working Capital ◍ What items are included in the cash flow from financing section? Answer - Debt, Share repurchases, Dividends ◍ What is the primary purpose of the equity schedule in our model? Answer - To calculate the necessary inputs that feed into our cash flow from financing activities, To calculate share repurchases for the cash flow build, To calculate dividends for the cash flow build ◍ What metric do we use to project our dividends? Answer - Dividend payout ratio ◍ Which dividend payout ratio did we use in our projection period? Answer - 33.8% ◍ What is the change of cash formula in our model? Answer - Cash Flow from Ops + Cash Flow from Investing + Cash Flow From Financing ◍ Are share repurchases a source or a use of cash? Answer - Use ◍ Are option proceeds a source or use of cash? Answer - Source ◍ What is the last step in creating our debt paydown and interest schedule? Answer - Interest Calculation ◍ What happens if our cash available for mandatory debt paydown is negative? Answer - We must draw on the revolver ◍ If no additional debt is raised and there are fixed, annual debt payments, what will happen to short-term debt from year to year? Answer - Stay the same ◍ Which of the below accurately describes the revolver logic in our model? Answer - Nike needs cash - draw on revolver, Nike does not need cash - pay down revolver if there is a balance, Nike does not need cash - do nothing if there is no revolver balance ◍ A model has these projections and assumptions: $20 million of Net Income, shares trade at 20.0x earnings, and 1 million shares outstanding. What is the projected share price? Answer - 400 (Projected Share Price = Earnings Multiple * EPS) ◍ A dilutive activity increases the amount of shares outstanding (T or F) Answer - True