©BRIGHTSTARS EXAM SOLUTIONS
11/17/2024 10:19 AM
3 Statement Modeling (CFI) Exam Questions
And Answers 100% Pass
What is the main goal of each financial statement? - answer✔Income: Measures Profitability
Cashflow Statement: Assess Cashflow
Balance Sheet: Review assets and how they are financed
* Income and Cashflow show us whole period Balance sheet show us at a specific point in time
How are the 3 financial statements connected? - answer✔IS connects to CFS through Net
Income
CFS connects to BS through Ending Cash
For Property Plant and Equipment on the balance sheet what is the formula to find it -
answer✔PP&E= PP&E (Prior Year)-Capital Expenditures-Depreciation
Two Important aspect of Financial Models - answer✔1. Tool to assist with decision making
2. Figures must be easy to understand
What is the model design - answer✔1. Outputs
2. Statements
3. Equity
4. Debt
5. Income Tax
6. Assets
7. Depreciation
8. Working Capital
9. Costs
1|Page
, ©BRIGHTSTARS EXAM SOLUTIONS
11/17/2024 10:19 AM
10. Revenue
11. Drivers
12. Inputs
What is the Preferred Model Layout - answer✔1. Cover
2. Outputs (Dashboard)
3. Inputs (Drivers and inputs)
*This should be the main presentation
4. Appendix (Financial Statements, Operational Schedules, Capital Structure)
What order does CFI recommend when making the model? - answer✔1. Outputs
2. Statements
3. Taxes
4. Drivers
Which of the following are true about Model Drivers?
- We isolate the drivers so that we can test how the model reacts to them
- Little to no understanding of the company is required when choosing drivers
- Drivers only impact the outputs/dashboard of the model
- Drivers are volatile and have a large impact on the model - answer✔1. We isolate the drivers
so that we can test how the model reacts to them
2. Drivers are volatile and have a large impact on the model
Give a characteristic of Drivers on the model - answer✔They are volatile and have a material
impact on the model outputs
They are relatively important
2|Page
11/17/2024 10:19 AM
3 Statement Modeling (CFI) Exam Questions
And Answers 100% Pass
What is the main goal of each financial statement? - answer✔Income: Measures Profitability
Cashflow Statement: Assess Cashflow
Balance Sheet: Review assets and how they are financed
* Income and Cashflow show us whole period Balance sheet show us at a specific point in time
How are the 3 financial statements connected? - answer✔IS connects to CFS through Net
Income
CFS connects to BS through Ending Cash
For Property Plant and Equipment on the balance sheet what is the formula to find it -
answer✔PP&E= PP&E (Prior Year)-Capital Expenditures-Depreciation
Two Important aspect of Financial Models - answer✔1. Tool to assist with decision making
2. Figures must be easy to understand
What is the model design - answer✔1. Outputs
2. Statements
3. Equity
4. Debt
5. Income Tax
6. Assets
7. Depreciation
8. Working Capital
9. Costs
1|Page
, ©BRIGHTSTARS EXAM SOLUTIONS
11/17/2024 10:19 AM
10. Revenue
11. Drivers
12. Inputs
What is the Preferred Model Layout - answer✔1. Cover
2. Outputs (Dashboard)
3. Inputs (Drivers and inputs)
*This should be the main presentation
4. Appendix (Financial Statements, Operational Schedules, Capital Structure)
What order does CFI recommend when making the model? - answer✔1. Outputs
2. Statements
3. Taxes
4. Drivers
Which of the following are true about Model Drivers?
- We isolate the drivers so that we can test how the model reacts to them
- Little to no understanding of the company is required when choosing drivers
- Drivers only impact the outputs/dashboard of the model
- Drivers are volatile and have a large impact on the model - answer✔1. We isolate the drivers
so that we can test how the model reacts to them
2. Drivers are volatile and have a large impact on the model
Give a characteristic of Drivers on the model - answer✔They are volatile and have a material
impact on the model outputs
They are relatively important
2|Page
