1
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FINANCIAL STATEMENT MODELING 2025
EXAM | QUESTIONS AND CORRECT
ANSWERS | ALREADY GRADED A+ |
VERIFIED ANSWERS | LATEST EXAM
Questions and Answers (100% Correct
Answers) Already Graded A+
Public Information Book "PIB" [ANS:] This is the collection of all the
© 2025 Assignment Expert
documents on a company needed for proper valuation:
1. The latest 10-K
Guru01 - Stuvia
2. The latest Q4 Press Release
3. Latest Equity Research and EPS consensus estimates
4. Last 6 months of big news (stock splits, acquisitions and other
material changes)
Where do you get the "base" case growth drivers from? (2
answers; one for public one for private) [ANS:] 1. For public
companies, you get the information from Equity Research Reports
on the company.
2. For private companies, you get the information from the current
predictions of the management of the company (called
"management" case)
How many years out do FSMs normally forecast? [ANS:] 3-7 years
(5 years being the most common)
, 2
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What are the two exceptions to the fact that forecasting line items
take a historical number and multiply it by a predicted growth
driver? [ANS:] 1. Interest Income and Interest Expense - you have
to understand projected debt levels to derive a projected interest
expense and will need projected cash balances to get interest
income
2. D&A Expense - this needs to be derived from PP&E projections
What should you do if the information in an Equity Research
Report is different than what is reported on the company's latest
© 2025 Assignment Expert
10-k? Why does this difference occur? [ANS:] This difference is
normally due to changes in laws surrounding revenue recognition.
As long as there are not major differences, it is ok to ignore this
and just use the 10-K data.
Guru01 - Stuvia
Equity Research Reports normally only go out 1-3 years in forecast
data. An FSM normally projects out beyond this time frame. How
do you estimate the data beyond the years that equity research
provides? [ANS:] A lot of banks will use a straight-line growth rate,
which means they will just keep using the last growth rate
produced by the Equity Research Report. However, other
methods might be needed if you notice this number is abnormally
high or low for the company.
What are the two common approaches for forecasting revenue?
[ANS:] 1. Grow revenue using an aggregate growth rate
2. Segment level detail and price*volume approach
How do you forecast COGS on the income statement
forecasting? [ANS:] Make a percentage COGS margin
(COGS/revenue) assumption and then back into a dollar amount
of COGS. You should start with historical margins as a benchmark
For Expert help and assignment solutions, +254707240657
FINANCIAL STATEMENT MODELING 2025
EXAM | QUESTIONS AND CORRECT
ANSWERS | ALREADY GRADED A+ |
VERIFIED ANSWERS | LATEST EXAM
Questions and Answers (100% Correct
Answers) Already Graded A+
Public Information Book "PIB" [ANS:] This is the collection of all the
© 2025 Assignment Expert
documents on a company needed for proper valuation:
1. The latest 10-K
Guru01 - Stuvia
2. The latest Q4 Press Release
3. Latest Equity Research and EPS consensus estimates
4. Last 6 months of big news (stock splits, acquisitions and other
material changes)
Where do you get the "base" case growth drivers from? (2
answers; one for public one for private) [ANS:] 1. For public
companies, you get the information from Equity Research Reports
on the company.
2. For private companies, you get the information from the current
predictions of the management of the company (called
"management" case)
How many years out do FSMs normally forecast? [ANS:] 3-7 years
(5 years being the most common)
, 2
For Expert help and assignment solutions, +254707240657
What are the two exceptions to the fact that forecasting line items
take a historical number and multiply it by a predicted growth
driver? [ANS:] 1. Interest Income and Interest Expense - you have
to understand projected debt levels to derive a projected interest
expense and will need projected cash balances to get interest
income
2. D&A Expense - this needs to be derived from PP&E projections
What should you do if the information in an Equity Research
Report is different than what is reported on the company's latest
© 2025 Assignment Expert
10-k? Why does this difference occur? [ANS:] This difference is
normally due to changes in laws surrounding revenue recognition.
As long as there are not major differences, it is ok to ignore this
and just use the 10-K data.
Guru01 - Stuvia
Equity Research Reports normally only go out 1-3 years in forecast
data. An FSM normally projects out beyond this time frame. How
do you estimate the data beyond the years that equity research
provides? [ANS:] A lot of banks will use a straight-line growth rate,
which means they will just keep using the last growth rate
produced by the Equity Research Report. However, other
methods might be needed if you notice this number is abnormally
high or low for the company.
What are the two common approaches for forecasting revenue?
[ANS:] 1. Grow revenue using an aggregate growth rate
2. Segment level detail and price*volume approach
How do you forecast COGS on the income statement
forecasting? [ANS:] Make a percentage COGS margin
(COGS/revenue) assumption and then back into a dollar amount
of COGS. You should start with historical margins as a benchmark
