Financial Modeling Course Exam 2026
Questions and Answers
Board of Directors - Correct answer-Hold management accountable and make
board-level decisions about corporate strategy
Company Management - Correct answer-Measure performance and make strategic,
operating and financial decisions
Creditors - Correct answer-Measure creditworthiness, liquidity and bankruptcy risk
Investors - Correct answer-Make decisions on buying or selling equity investments
Acquirers - Correct answer-Determine valuation and make investment decisions
Regulators - Correct answer-Determine whether the company is operating
according to regulations and the law
Income Statement - Correct answer-Presents the results of operations (e.g.
profitability) over a period of time, typically monthly, quarterly and/or annually.
Purpose is to show stakeholders whether the company made or lost money during
the period being reported. It indicates how revenues are transformed into net
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, income. It displays the revenues recognized for a specific period of time and the
expenses charged against those revenues.
Revenue (sales) - Correct answer-amount charged for the delivery of goods or
services
Cost of Sales (Cost of Goods Sold) - Correct answer-is the direct cost of producing
revenue (raw
materials, direct wages, etc.)
Gross Profit - Correct answer-calculated as revenue less cost of sales and indicates
how efficiently labor
and supplies are used in the production process
Operating Expenses - Correct answer-all other expenses required to run the
business (management
salaries, marketing, travel, etc.)
Operating Income (EBIT) - Correct answer-calculated as revenue less cost of sales
and operating
expenses and indicates a company's earning power from ongoing operations
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
Questions and Answers
Board of Directors - Correct answer-Hold management accountable and make
board-level decisions about corporate strategy
Company Management - Correct answer-Measure performance and make strategic,
operating and financial decisions
Creditors - Correct answer-Measure creditworthiness, liquidity and bankruptcy risk
Investors - Correct answer-Make decisions on buying or selling equity investments
Acquirers - Correct answer-Determine valuation and make investment decisions
Regulators - Correct answer-Determine whether the company is operating
according to regulations and the law
Income Statement - Correct answer-Presents the results of operations (e.g.
profitability) over a period of time, typically monthly, quarterly and/or annually.
Purpose is to show stakeholders whether the company made or lost money during
the period being reported. It indicates how revenues are transformed into net
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
, income. It displays the revenues recognized for a specific period of time and the
expenses charged against those revenues.
Revenue (sales) - Correct answer-amount charged for the delivery of goods or
services
Cost of Sales (Cost of Goods Sold) - Correct answer-is the direct cost of producing
revenue (raw
materials, direct wages, etc.)
Gross Profit - Correct answer-calculated as revenue less cost of sales and indicates
how efficiently labor
and supplies are used in the production process
Operating Expenses - Correct answer-all other expenses required to run the
business (management
salaries, marketing, travel, etc.)
Operating Income (EBIT) - Correct answer-calculated as revenue less cost of sales
and operating
expenses and indicates a company's earning power from ongoing operations
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
