BIWS Exam Questions with Correct Answers| New Update 100% Verified by Experts
How to link and project 3 financial statements - Start with the income statement (leave
interest income and expense blank)
- Project opetational balance sheet items (Inventory, Ar, Ap, Acrrued liabilities, Op lease assets
and laibilities etc)
- these are usually a % of Revenue, SG&A, COGS and itter incoke statsment lines
- Start the CFS with net income
- adjust for non-cash items on the IS (Add back D&A, SBC, Impairments, Write-downs, deffered
taxes etc). Shoukd alos reflect changes in olerational BS line items ("working capital") in here.
- project CFI and CFF seoeratley: Capex linked to revenue growth
- Sum up all sections resultingbjn the net change in cash
- link BS line items to CFS (subtract on the asset side and add on liabikities side)
- Check balance sheet balances
- add in interest income and expenses
Link the 3 Financial Statements - Net income from the income statement flows to the
balance sheet in retained earnings
- CFS starts with net income
- Add back depreciation (and other none cash expenses)
- add change in working capital to get operational cash flow
- add Capex
- sum of cash on last periods closing cash balance plus cash flow from CFS is ending cash
What is working capital? current assets - current liabilities
Alternative definition for working capital? Current operational assets - Current operational
liabilities (so excl cash, investments, debt etc)
, Free Cash Flow (FCF) cash flow from operating activities - capital expenditures
Balance the balance sheet Assets = equity + liabilities
earnings per share ratio net income - preferred dividends / weighted average common
shares outstanding
Cash flow statement from income statement Net income (from income statement)
- non-cash items (D&A, stick based compensation)
- period on period increases in working capital assets (accounts receivable)
+ period on period increases in working capital liabilities (accounts payable, accrued liabilities)
= cash from operations
Cash from investing operations =
Cash related to investments in the business (capex)
Cash from financing expenses=
Capital raising
Paying dividends
Debt
What is equity value Latest closing share price x Total diluted shares outstanding
(Also known as market cap)
What is enterprise value Enterprise Value = Equity Value + Net Debt + Non-controlling
Interest + Preferred Stock
What is net debt? Total Debt - Cash
How to link and project 3 financial statements - Start with the income statement (leave
interest income and expense blank)
- Project opetational balance sheet items (Inventory, Ar, Ap, Acrrued liabilities, Op lease assets
and laibilities etc)
- these are usually a % of Revenue, SG&A, COGS and itter incoke statsment lines
- Start the CFS with net income
- adjust for non-cash items on the IS (Add back D&A, SBC, Impairments, Write-downs, deffered
taxes etc). Shoukd alos reflect changes in olerational BS line items ("working capital") in here.
- project CFI and CFF seoeratley: Capex linked to revenue growth
- Sum up all sections resultingbjn the net change in cash
- link BS line items to CFS (subtract on the asset side and add on liabikities side)
- Check balance sheet balances
- add in interest income and expenses
Link the 3 Financial Statements - Net income from the income statement flows to the
balance sheet in retained earnings
- CFS starts with net income
- Add back depreciation (and other none cash expenses)
- add change in working capital to get operational cash flow
- add Capex
- sum of cash on last periods closing cash balance plus cash flow from CFS is ending cash
What is working capital? current assets - current liabilities
Alternative definition for working capital? Current operational assets - Current operational
liabilities (so excl cash, investments, debt etc)
, Free Cash Flow (FCF) cash flow from operating activities - capital expenditures
Balance the balance sheet Assets = equity + liabilities
earnings per share ratio net income - preferred dividends / weighted average common
shares outstanding
Cash flow statement from income statement Net income (from income statement)
- non-cash items (D&A, stick based compensation)
- period on period increases in working capital assets (accounts receivable)
+ period on period increases in working capital liabilities (accounts payable, accrued liabilities)
= cash from operations
Cash from investing operations =
Cash related to investments in the business (capex)
Cash from financing expenses=
Capital raising
Paying dividends
Debt
What is equity value Latest closing share price x Total diluted shares outstanding
(Also known as market cap)
What is enterprise value Enterprise Value = Equity Value + Net Debt + Non-controlling
Interest + Preferred Stock
What is net debt? Total Debt - Cash
