Wall Street Prep Premium Exam
GUARANTEED PASS!!
What is generally not considered to be a pre-tax non-recurring (unusual or infrequent) item? -
(ANSWER)Extraordinary gains/losses
what is false about depreciation and amortization - (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 - (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 - (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 - (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 - (ANSWER)computers used by the
accounting department
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? -
(ANSWER)45%
A company has the following information, 1. 2014 revenues of $5 billion,2013 Accounts
receivable of $400 million, 2014 accounts receivable of $600 million, what are the days sales
outstanding - (ANSWER)36.5
A company has the following information:
• 2014 Revenues of $8 billion
• 2014 COGS of $5 billion
• 2013 Accounts receivable of $400 million
• 2014 Accounts receivable of $600 million
• 2013 Inventories of $1 billion
• 2014 Inventories of $800 million
• 2013 Accounts payable of $250 million
• 2014 Accounts payable of $300 million
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, What are the inventory days for the company? - (ANSWER)65.7 days
Which of the following is true - (ANSWER)Coca Cola's brand name is not reflected as an
intangible asset on its balance sheet
A company has the following information:
• 2014 share repurchase plan of $4 billion
• Average share price of $60 for the year 2013
• Expected EPS growth for 2014 of 10%
What should the number of shares repurchased by the company be in your financial model? -
(ANSWER)60.6 million
non-controlling interest - (ANSWER)is an expense on the income statement and equity o the
balance sheet
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? - (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 - (ANSWER)beginning cash balance + pre-debt cash flows - min. cash
balance - required principal payments of LT and other debt
to calculate interest expense in the future, you should do which of the following -
(ANSWER)apply a weighted average interest rate times the average debt balance over the course
of the year
enterprise (transaction) value represents the: - (ANSWER)value of all capital invested in a
business
A debt holder would be primarily concerned with which of the following multiples?
I. Enterprise (Transaction) Value / EBITDA
II. Price/Earnings
III. Enterprise (Transaction) Value / Sales - (ANSWER)1 and 3 only
On January 1, 2014, shares of Company X trade at $6.50 per share, with 400 million shares
outstanding. The company has net debt of $300 million. After building an earnings model for
Company X, you have projected free cash flow for each year through 2020 as follows:
Year 2014 2015 2016 2017 2018 2019 2020
Free Cash Flow 110 120 150 170 200 250 280
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GUARANTEED PASS!!
What is generally not considered to be a pre-tax non-recurring (unusual or infrequent) item? -
(ANSWER)Extraordinary gains/losses
what is false about depreciation and amortization - (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 - (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 - (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 - (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 - (ANSWER)computers used by the
accounting department
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? -
(ANSWER)45%
A company has the following information, 1. 2014 revenues of $5 billion,2013 Accounts
receivable of $400 million, 2014 accounts receivable of $600 million, what are the days sales
outstanding - (ANSWER)36.5
A company has the following information:
• 2014 Revenues of $8 billion
• 2014 COGS of $5 billion
• 2013 Accounts receivable of $400 million
• 2014 Accounts receivable of $600 million
• 2013 Inventories of $1 billion
• 2014 Inventories of $800 million
• 2013 Accounts payable of $250 million
• 2014 Accounts payable of $300 million
Page 1 of 8
, What are the inventory days for the company? - (ANSWER)65.7 days
Which of the following is true - (ANSWER)Coca Cola's brand name is not reflected as an
intangible asset on its balance sheet
A company has the following information:
• 2014 share repurchase plan of $4 billion
• Average share price of $60 for the year 2013
• Expected EPS growth for 2014 of 10%
What should the number of shares repurchased by the company be in your financial model? -
(ANSWER)60.6 million
non-controlling interest - (ANSWER)is an expense on the income statement and equity o the
balance sheet
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? - (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 - (ANSWER)beginning cash balance + pre-debt cash flows - min. cash
balance - required principal payments of LT and other debt
to calculate interest expense in the future, you should do which of the following -
(ANSWER)apply a weighted average interest rate times the average debt balance over the course
of the year
enterprise (transaction) value represents the: - (ANSWER)value of all capital invested in a
business
A debt holder would be primarily concerned with which of the following multiples?
I. Enterprise (Transaction) Value / EBITDA
II. Price/Earnings
III. Enterprise (Transaction) Value / Sales - (ANSWER)1 and 3 only
On January 1, 2014, shares of Company X trade at $6.50 per share, with 400 million shares
outstanding. The company has net debt of $300 million. After building an earnings model for
Company X, you have projected free cash flow for each year through 2020 as follows:
Year 2014 2015 2016 2017 2018 2019 2020
Free Cash Flow 110 120 150 170 200 250 280
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