LATEST WALL STREET PREP CERTIFICATION
EXAM REVIEW 2024/2025
Question 1
Which one of these are generally NOT considered to be a pre-tax non-recurring
(unusual or infrequent) item?
Restructuring expenses One-time write offs
Extraordinary gains/losses
Gains/losses on sale of assets
Question 2
Which of the following statements is FALSE about Depreciation and Amortization
(D&A)?
D&A may be classified within cost of goods sold
D&A may be classified as a separate line item on the income statement
D&A may be classified within interest expense
D&A may be classified within operating costs
Question 3
Company X’s current assets increased by $40 million from 2007 to 2008, while the
company’s current liabilities increased by $25 million over the same period. The
cash impact of the change in working capital was:
A decrease of $15 million An increase of $15 million An increase of $40 million An
increase of $25 million
Question 4
The final component of an earnings projection model is calculating interest
expense. The calculation may create a circular reference because:
,Interest expense affects net income, which affects free cash flow, which affects the
amount of debt a company pays down, which, in turn, affects the interest expense,
hence the circular reference
Interest expense affects net income, which affects working capital levels, which affects
short-term debt levels, which, in turn, affects interest expense, hence the circular
reference
Interest expense affects projected debt levels, which affects projected net income,
which, in turn, affects projected interest expense, hence the circular reference
None of the above
Question 5
A 10-Q financial filing has all of the following characteristics EXCEPT:
Issued 4 times per year
Unaudited
Provides less detail regarding stock options and debt schedules than a 10-K Provides
the most up-to-date financial information for the firm
Question 6
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?
Computers used by the accounting department
Manufacturing equipment
Manufacturing plant None of the above
Question 7
If a company has projected revenues of $10 billion, a gross profit margin of 65%,
and projected SG&A expenses of $2 billion, what is the company’s operating
(EBIT) margin?
20%
45%
55%
80%
, Question 8
A company has the following information: 2014 Revenues of $5 billion
2013 Accounts receivable of $400 million
2014 Accounts receivable of $600 million
What are the days sales outstanding (DSO) for this company?
29.2 days 36.5 days 44 days 60 days
Question 9
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?
58.4 days
65.7 days
70 days
73 days
Question 10
Which of the following is TRUE?
Intangible assets include brands and patents but not trademarks Goodwill is not
considered an intangible asset
Coca Cola’s brand name is not reflected as an intangible asset on its balance sheet
EXAM REVIEW 2024/2025
Question 1
Which one of these are generally NOT considered to be a pre-tax non-recurring
(unusual or infrequent) item?
Restructuring expenses One-time write offs
Extraordinary gains/losses
Gains/losses on sale of assets
Question 2
Which of the following statements is FALSE about Depreciation and Amortization
(D&A)?
D&A may be classified within cost of goods sold
D&A may be classified as a separate line item on the income statement
D&A may be classified within interest expense
D&A may be classified within operating costs
Question 3
Company X’s current assets increased by $40 million from 2007 to 2008, while the
company’s current liabilities increased by $25 million over the same period. The
cash impact of the change in working capital was:
A decrease of $15 million An increase of $15 million An increase of $40 million An
increase of $25 million
Question 4
The final component of an earnings projection model is calculating interest
expense. The calculation may create a circular reference because:
,Interest expense affects net income, which affects free cash flow, which affects the
amount of debt a company pays down, which, in turn, affects the interest expense,
hence the circular reference
Interest expense affects net income, which affects working capital levels, which affects
short-term debt levels, which, in turn, affects interest expense, hence the circular
reference
Interest expense affects projected debt levels, which affects projected net income,
which, in turn, affects projected interest expense, hence the circular reference
None of the above
Question 5
A 10-Q financial filing has all of the following characteristics EXCEPT:
Issued 4 times per year
Unaudited
Provides less detail regarding stock options and debt schedules than a 10-K Provides
the most up-to-date financial information for the firm
Question 6
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?
Computers used by the accounting department
Manufacturing equipment
Manufacturing plant None of the above
Question 7
If a company has projected revenues of $10 billion, a gross profit margin of 65%,
and projected SG&A expenses of $2 billion, what is the company’s operating
(EBIT) margin?
20%
45%
55%
80%
, Question 8
A company has the following information: 2014 Revenues of $5 billion
2013 Accounts receivable of $400 million
2014 Accounts receivable of $600 million
What are the days sales outstanding (DSO) for this company?
29.2 days 36.5 days 44 days 60 days
Question 9
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?
58.4 days
65.7 days
70 days
73 days
Question 10
Which of the following is TRUE?
Intangible assets include brands and patents but not trademarks Goodwill is not
considered an intangible asset
Coca Cola’s brand name is not reflected as an intangible asset on its balance sheet
