FMVA PRACTICE TEST QUESTIONS &
RELIABLE COMPLETE SOLUTIONS
RATED 100% CORRECT
Using the financial statements attached, what is the company's return on equity in year 5? -
correct answer ✔✔27.15%
Using the financial statements attached, what is the company's return on assets in year 2? -
correct answer ✔✔25.09%
Using the financial statements attached, what is the company's operating profit (EBIT) margin in
year 1? - correct answer ✔✔21.75%
Using the financial statements attached, what is the company's net profit margin in year 1? -
correct answer ✔✔14.71%
Using the financial statements attached, what is the company's effective tax rate in year 2? -
correct answer ✔✔28.06%
Using the financial statements attached, what is the company's total asset turnover ratio in year
3? - correct answer ✔✔1.28x
Using the financial statements attached, what is the company's accounts receivable days ratio in
year 1? - correct answer ✔✔4.0 days
Using the financial statements attached, what is the company's inventory days ratio in year 5? -
correct answer ✔✔188.8 days
,Using the financial statements attached, what is the company's cash days ratio in year 3? -
correct answer ✔✔95.4 days
Using the financial statements attached, what is the company's debt to equity ratio in year 1? -
correct answer ✔✔0.00x
Using the financial statements attached, what is the company's total assets to equity ratio in
year 2? - correct answer ✔✔1.32x
Using the financial statements attached, what is the company's current ratio in year 3? - correct
answer ✔✔2.41x
When analyzing the income statement, which line item do you typically use as the denominator
in the ratio? - correct answer ✔✔Sales
What is typically NOT included in a checklist used to identify appropriate peer group
companies? - correct answer ✔✔Same type of management team
What is the correct formula for calculating NOPAT? - correct answer ✔✔EBIT x (1 - Tax Rate)
When conducting financial analysis, what is the recommended best practice for minimum
number of years of financial statements? - correct answer ✔✔5 years
What are the three ROE levers of the DuPont pyramid? - correct answer ✔✔Net Profit Margin x
Total Asset Turnover x Financial Leverage
Which of the following is NOT a characteristic of horizontal analysis? - correct answer ✔✔It is
most effective when comparing one period with each other.
, Which current asset or liability is omitted from this ratio? - correct answer ✔✔Inventory
Which of the following retailers is most likely to have the lowest inventory days? - correct
answer ✔✔A grocery store / supermarket
The proper structure of a 3-statement model should contain which of the following modules? -
correct answer ✔✔Inputs, Calculations, Outputs
Which of the following is a best practice for financial model inputs? - correct answer ✔✔Data
should only be entered once
What is the formula for the Capital Asset Turnover Ratio? - correct answer ✔✔Sales/Property,
Plant & Equipment
According to the course, a 3-statement financial model can be used for which of the following
purposes? Select ALL that apply. - correct answer ✔✔Strategic planning, Corporate
transactions, and Investment decisions
Complex financial models are all of the following EXCEPT: - correct answer ✔✔They are easy to
audit
Which of the following items are considered "operating activities" on the cash flow statement?
Select ALL correct answers. - correct answer ✔✔Changes in operating assets and liabilities, Net
income, and Depreciation
According to the course, which is the best method for calculating interest expense? - correct
answer ✔✔Interest Rate x Average Debt Balance
RELIABLE COMPLETE SOLUTIONS
RATED 100% CORRECT
Using the financial statements attached, what is the company's return on equity in year 5? -
correct answer ✔✔27.15%
Using the financial statements attached, what is the company's return on assets in year 2? -
correct answer ✔✔25.09%
Using the financial statements attached, what is the company's operating profit (EBIT) margin in
year 1? - correct answer ✔✔21.75%
Using the financial statements attached, what is the company's net profit margin in year 1? -
correct answer ✔✔14.71%
Using the financial statements attached, what is the company's effective tax rate in year 2? -
correct answer ✔✔28.06%
Using the financial statements attached, what is the company's total asset turnover ratio in year
3? - correct answer ✔✔1.28x
Using the financial statements attached, what is the company's accounts receivable days ratio in
year 1? - correct answer ✔✔4.0 days
Using the financial statements attached, what is the company's inventory days ratio in year 5? -
correct answer ✔✔188.8 days
,Using the financial statements attached, what is the company's cash days ratio in year 3? -
correct answer ✔✔95.4 days
Using the financial statements attached, what is the company's debt to equity ratio in year 1? -
correct answer ✔✔0.00x
Using the financial statements attached, what is the company's total assets to equity ratio in
year 2? - correct answer ✔✔1.32x
Using the financial statements attached, what is the company's current ratio in year 3? - correct
answer ✔✔2.41x
When analyzing the income statement, which line item do you typically use as the denominator
in the ratio? - correct answer ✔✔Sales
What is typically NOT included in a checklist used to identify appropriate peer group
companies? - correct answer ✔✔Same type of management team
What is the correct formula for calculating NOPAT? - correct answer ✔✔EBIT x (1 - Tax Rate)
When conducting financial analysis, what is the recommended best practice for minimum
number of years of financial statements? - correct answer ✔✔5 years
What are the three ROE levers of the DuPont pyramid? - correct answer ✔✔Net Profit Margin x
Total Asset Turnover x Financial Leverage
Which of the following is NOT a characteristic of horizontal analysis? - correct answer ✔✔It is
most effective when comparing one period with each other.
, Which current asset or liability is omitted from this ratio? - correct answer ✔✔Inventory
Which of the following retailers is most likely to have the lowest inventory days? - correct
answer ✔✔A grocery store / supermarket
The proper structure of a 3-statement model should contain which of the following modules? -
correct answer ✔✔Inputs, Calculations, Outputs
Which of the following is a best practice for financial model inputs? - correct answer ✔✔Data
should only be entered once
What is the formula for the Capital Asset Turnover Ratio? - correct answer ✔✔Sales/Property,
Plant & Equipment
According to the course, a 3-statement financial model can be used for which of the following
purposes? Select ALL that apply. - correct answer ✔✔Strategic planning, Corporate
transactions, and Investment decisions
Complex financial models are all of the following EXCEPT: - correct answer ✔✔They are easy to
audit
Which of the following items are considered "operating activities" on the cash flow statement?
Select ALL correct answers. - correct answer ✔✔Changes in operating assets and liabilities, Net
income, and Depreciation
According to the course, which is the best method for calculating interest expense? - correct
answer ✔✔Interest Rate x Average Debt Balance
