If you want to test how an increase in percentage of cost of good sold affects the contribution margin, you would use
________. Sensitivity analysis
When performing a scenario analysis, which of the following tools/functions in Excel is used to create a dropdown list
where we can select the live case? Data Validation
You should perform sensitivity analysis when:
You need to determine which assumptions matter the most
The formula contained in the yellow highlighted cell (I39) is = 1. ( 2. , I9,I24). This formula can be copied over to the entire live
scenario section without any manual modification. (Hint: do not forget to use absolute references.)
CHOOSE
$I$4
What is the share price when the discount rate is 13% and revenue growth is 15%?
36.70
What is the share price when COGS increases by 5%?
29.29
The formula contained in the YELLOW cell (G179) is ___________ Hint: do not forget the $ when using absolute references. Use
absolute reference so this formula can be copied over to other cells in this section without any manual modification.
=SMALL($F$177:$F$180,E179)
The formula contained in the ORANGE cell (H178) is = 1. ($A$177:$G$180, 2. ( 3. ,$F$177:$F$180,0),MATCH($A$177,$A$177:
$F$177,0))
Hint: do not forget the $ when using absolute references.
INDEX
MATCH
G178
What type of chart did we use to build a tornado chart?
Stacked bar chart
Rank the assumptions (drivers) according to sensitivity from lowest to highest.
Revenue
COGS
Discount Rate
EV/EBITDA
1. Discount Rate
2. EV/EBITDA
3. COGS
4. Revenue growth
The chart type we used to build the football field chart was? Stock chart - Open-high-low-close
What is the weighted average cost of capital if a business has a cost of equity of 12%, a cost of debt of 10%, tax rate
of 25%, 20 million market value of debt, and 60 million market value of equity? 10.9%
What is the cost of equity using the capital asset pricing model if the risk free rate is 4.5%, the beta is 1.75 and the
equity risk premium is 4.25%? 11.94%
Which of the following is the correct definition for free cash flows to the firm? EBIT x (1 - Tax Rate) + Depreciation +/-
Changes in Working Capital – Capex
How do you find the terminal value using the EV/EBITDA exit multiple? Terminal EV = EV/EBITDA x EBITDA value of
final year of forecast
Assuming a company has no other funding sources other than debt and common equity, what is the difference
between enterprise value and equity value? All interest bearing debt less cash and equivalents
Please sort the following into pros for comparable company analysis and pros for precedent transaction analysis.
, Comparable company analysis
Observable current value for a company (what investors are actually paying for business right now)
Large number of potential companies to compare to
Readily available
Precedent transaction analysis
Includes takeover premium / control premium
Includes synergy value
Shows the value investors paid for the entire company (not just 1 share)
Please sort the following into PEST Analysis, Porter's 5 Forces, Competitive Advantage Analysis and SWOT
Analysis
A. PEST
B. Porter's 5 Forces
C. Competitive Advantage Analysis
D. SWOT Analysis
D
Weaknesses
A
Economic Forecasting
C
Cost Leadership
C
Differentiation
A
Social Forecasting
D
Opportunities
________. Sensitivity analysis
When performing a scenario analysis, which of the following tools/functions in Excel is used to create a dropdown list
where we can select the live case? Data Validation
You should perform sensitivity analysis when:
You need to determine which assumptions matter the most
The formula contained in the yellow highlighted cell (I39) is = 1. ( 2. , I9,I24). This formula can be copied over to the entire live
scenario section without any manual modification. (Hint: do not forget to use absolute references.)
CHOOSE
$I$4
What is the share price when the discount rate is 13% and revenue growth is 15%?
36.70
What is the share price when COGS increases by 5%?
29.29
The formula contained in the YELLOW cell (G179) is ___________ Hint: do not forget the $ when using absolute references. Use
absolute reference so this formula can be copied over to other cells in this section without any manual modification.
=SMALL($F$177:$F$180,E179)
The formula contained in the ORANGE cell (H178) is = 1. ($A$177:$G$180, 2. ( 3. ,$F$177:$F$180,0),MATCH($A$177,$A$177:
$F$177,0))
Hint: do not forget the $ when using absolute references.
INDEX
MATCH
G178
What type of chart did we use to build a tornado chart?
Stacked bar chart
Rank the assumptions (drivers) according to sensitivity from lowest to highest.
Revenue
COGS
Discount Rate
EV/EBITDA
1. Discount Rate
2. EV/EBITDA
3. COGS
4. Revenue growth
The chart type we used to build the football field chart was? Stock chart - Open-high-low-close
What is the weighted average cost of capital if a business has a cost of equity of 12%, a cost of debt of 10%, tax rate
of 25%, 20 million market value of debt, and 60 million market value of equity? 10.9%
What is the cost of equity using the capital asset pricing model if the risk free rate is 4.5%, the beta is 1.75 and the
equity risk premium is 4.25%? 11.94%
Which of the following is the correct definition for free cash flows to the firm? EBIT x (1 - Tax Rate) + Depreciation +/-
Changes in Working Capital – Capex
How do you find the terminal value using the EV/EBITDA exit multiple? Terminal EV = EV/EBITDA x EBITDA value of
final year of forecast
Assuming a company has no other funding sources other than debt and common equity, what is the difference
between enterprise value and equity value? All interest bearing debt less cash and equivalents
Please sort the following into pros for comparable company analysis and pros for precedent transaction analysis.
, Comparable company analysis
Observable current value for a company (what investors are actually paying for business right now)
Large number of potential companies to compare to
Readily available
Precedent transaction analysis
Includes takeover premium / control premium
Includes synergy value
Shows the value investors paid for the entire company (not just 1 share)
Please sort the following into PEST Analysis, Porter's 5 Forces, Competitive Advantage Analysis and SWOT
Analysis
A. PEST
B. Porter's 5 Forces
C. Competitive Advantage Analysis
D. SWOT Analysis
D
Weaknesses
A
Economic Forecasting
C
Cost Leadership
C
Differentiation
A
Social Forecasting
D
Opportunities
