WALL STREET PREP PREMIUM EXAM
What.is.generally.not.considered.to.be.a.pre-tax.non-recurring.
(unusual.or.infrequent).item?.-.ans✔Extraordinary.gains/losses
what.is.false.about.depreciation.and.amortization.-.ans✔D&A.may.be.classified.within.inter
est.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.-.an
s✔a.decrease.of.15.million
the.final.component.of.an.earnings.projection.model.is.calculating.interest.expense..the.cal
culation.may.create.a.circular.reference.because.-.ans✔interest.expense.affects.net.inco
me,.which.affects.FCF,.which.affects.the.amount.of.debt.a.company.pays.down,.which,.in.t
urn.affects.the.interest.expense,.hence.the.circular.reference
a.10-
q.financial.filing.has.all.of.the.following.characteristics.except.-.ans✔issued.four.times.a.ye
ar.
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.-.ans✔computers.used.by.th
e.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?.-.ans✔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.-.ans✔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
What.are.the.inventory.days.for.the.company?.-.ans✔65.7.days
Which.of.the.following.is.true.-.ans✔Coca.Cola's.brand.name.is.not.reflected.as.an.intangib
le.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
?.-.ans✔60.6.million
non-
controlling.interest.-.ans✔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?.-.ans✔15.billion
in.order.to.find.out.how.much.cash.is.available.to.pay.down.short.term.debt,.such.as.revolvi
ng.credit.line,.you.must.take.-.ans✔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.-.ans✔appl
y.a.weighted.average.interest.rate.times.the.average.debt.balance.over.the.course.of.the.y
ear
enterprise.
(transaction).value.represents.the:.-.ans✔value.of.all.capital.invested.in.a.business
A.debt.holder.would.be.primarily.concerned.with.which.of.the.following.multiples?
What.is.generally.not.considered.to.be.a.pre-tax.non-recurring.
(unusual.or.infrequent).item?.-.ans✔Extraordinary.gains/losses
what.is.false.about.depreciation.and.amortization.-.ans✔D&A.may.be.classified.within.inter
est.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.-.an
s✔a.decrease.of.15.million
the.final.component.of.an.earnings.projection.model.is.calculating.interest.expense..the.cal
culation.may.create.a.circular.reference.because.-.ans✔interest.expense.affects.net.inco
me,.which.affects.FCF,.which.affects.the.amount.of.debt.a.company.pays.down,.which,.in.t
urn.affects.the.interest.expense,.hence.the.circular.reference
a.10-
q.financial.filing.has.all.of.the.following.characteristics.except.-.ans✔issued.four.times.a.ye
ar.
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.-.ans✔computers.used.by.th
e.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?.-.ans✔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.-.ans✔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
What.are.the.inventory.days.for.the.company?.-.ans✔65.7.days
Which.of.the.following.is.true.-.ans✔Coca.Cola's.brand.name.is.not.reflected.as.an.intangib
le.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
?.-.ans✔60.6.million
non-
controlling.interest.-.ans✔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?.-.ans✔15.billion
in.order.to.find.out.how.much.cash.is.available.to.pay.down.short.term.debt,.such.as.revolvi
ng.credit.line,.you.must.take.-.ans✔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.-.ans✔appl
y.a.weighted.average.interest.rate.times.the.average.debt.balance.over.the.course.of.the.y
ear
enterprise.
(transaction).value.represents.the:.-.ans✔value.of.all.capital.invested.in.a.business
A.debt.holder.would.be.primarily.concerned.with.which.of.the.following.multiples?
