WALL STREET PREP PREMIUM EXAM
WITH CORRECT SOLUTIONS
1. 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 the accounting department
2. 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%
3. 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
4. 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
5. Which of the following is true - -ANS☑️☑️--Coca Cola's brand name is not reflected as
an intangible asset on its balance sheet
, 6. 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
7. What is generally not considered to be a pre-tax non-recurring (unusual or infrequent)
item? - -ANS☑️☑️--Extraordinary gains/losses
8. what is false about depreciation and amortization - -ANS☑️☑️--D&A may be classified
within interest expense
9. 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 - -ANS☑️☑️--a decrease of 15 million
10. the final component of an earnings projection model is calculating interest expense. the
calculation may create a circular reference because - -ANS☑️☑️--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
11. non-controlling interest - -ANS☑️☑️--is an expense on the income statement and
equity o the balance sheet
12. A company has the following information:
• 2013 retained earnings balance of $12 billion
• Net income of $3.5 billion in 2014
WITH CORRECT SOLUTIONS
1. 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 the accounting department
2. 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%
3. 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
4. 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
5. Which of the following is true - -ANS☑️☑️--Coca Cola's brand name is not reflected as
an intangible asset on its balance sheet
, 6. 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
7. What is generally not considered to be a pre-tax non-recurring (unusual or infrequent)
item? - -ANS☑️☑️--Extraordinary gains/losses
8. what is false about depreciation and amortization - -ANS☑️☑️--D&A may be classified
within interest expense
9. 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 - -ANS☑️☑️--a decrease of 15 million
10. the final component of an earnings projection model is calculating interest expense. the
calculation may create a circular reference because - -ANS☑️☑️--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
11. non-controlling interest - -ANS☑️☑️--is an expense on the income statement and
equity o the balance sheet
12. A company has the following information:
• 2013 retained earnings balance of $12 billion
• Net income of $3.5 billion in 2014
