WALL STREET EXAM TEST BANK
EXPERT REVIEWED QUESTIONS
ANSWERS
◉ 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
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
EXPERT REVIEWED QUESTIONS
ANSWERS
◉ 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
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
