- Study guides, Class notes & Summaries

What are the four steps of business analysis 1. Strategy analysis 2. Accounting analysis 3. Financial analysis 4. Prospective analysis What does strategy analysis encompass 1. Identifying key profit drivers and business risks. Also, assesing profit potential 2.It is essential because it enables the analyst to better frame the subsequent financial and accounting analysis 3.Enables the analyst to make sound assumptions in forecasting a firm's future performance What is accounting analysis Evalu...

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5 pages

Written in 2024/2025

Grade A+

twishfrancis

Forecasting Frameworks 1. Growth stack 2. Mix accelerator 3. Comp waterfall 4. Box replicator 5. Ramp curve 6. Creative lags 7. Mix extrapolation 8. Mid-cycle 9. Data correlations Five Key Questions of the Fundamental Investor 1.) Is this a good business? 2.) How does this business actually make money? - what is the dollar flow and unit economics? 3.) What is the nature of the cost structure? - Primarily fixed or variable? Why does that distinction matter? 4.) What drives the business? What are...

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4 pages

Written in 2024/2025

Grade A+

twishfrancis

Financial Modelling Examination Questions And Correct Answer With Explanation Graded A+ Study Guide

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18 pages

Written in 2025/2026

Grade A+

teachme2expert

FINANCIAL MODELLING Financial modeling - Answer- Is concerned with the application of finance theory to real world data using spreadsheet packages such as Excel Three Components of Financial modeling - Answer- 1) Data-Prices, returns, earnings 2) Financial theory- CAPM or option pricing model 3) Model- excel spreadsheet or a VBA subroutine Most important element of applied finance - Answer- Data - Market, accounting, or economic Market data - Answer- includes the prices and returns...

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5 pages

Written in 2024/2025

Grade A+

Freshy

1. Explain the differences between Excel functions PMT, IPMT, and PPMT. What type of cash-flow stream is each of these based on? When should each of these be used? Which vary with time in your amortization schedule? Why? Each of these is for use with an annuity, or annuity-type cash flow (constant cash flows over a set period of time at regular intervals). PMT calculates the total payment, which is the same for every period. IMPT calculates the interest payment for each period, which will differ...

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4 pages

Written in 2024/2025

Grade A+

twishfrancis

Board of Directors Hold management accountable and make board-level decisions about corporate strategy Company Management Measure performance and make strategic, operating and financial decisions Creditors Measure creditworthiness, liquidity and bankruptcy risk Investors Make decisions on buying or selling equity investments Acquirers Determine valuation and make investment decisions Regulators Determine whether the company is operating according to regulations and the law Income Statement...

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5 pages

Written in 2024/2025

Grade A+

twishfrancis

Risk the chance an investment's actual gain will differ from the expected return. The main types of risk are systematic (tied to the broader market) and unsystematic (specific to a company or industry) risk. Return the change in the price of an asset or investment over a period of time. A positive return means a profit while a negative return means a loss. Returns are often annualized for comparison purposes, while a holding period return calculates the gain or loss during the entire period an...

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7 pages

Written in 2024/2025

Grade A+

twishfrancis

Name the Excel function that can be used to calculate the Present Value of an Annuity. PV State and explain the effect on the present value of a single future cash flow when you decrease the number of periods. Present value increases because a larger investment is required to have the same amount after a shorter period. State and explain the effect of increasing the discount rate on the Present Value of an Annuity. Present Value of the Annuity decreases because a smaller investment is required...

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6 pages

Written in 2024/2025

Grade A+

twishfrancis

What is working capital? It's the measure of a company's current assets minus its current liabilities What does working capital mean? High and low? It's a measure of the short term efficiency of a company, measuring its ability to cover potential short term issues What is operating working capital? It is the current assets less current liabilities, but without cash and cash equivalents or debt How does working capital differ from operating working capital? In operating working capital ther...

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5 pages

Written in 2024/2025

Grade A+

twishfrancis

Credit Analysis The evaluation of the creditworthiness of a company 2 types of creditors Trade creditors and non trade creditors Trade creditors Provide goods or services, bear risk of default, most short term and usually implicit interest Non-trade creditors Provide major financing, bear risk of default, most long term and usually explicit interest Equity Analysis Evaluating a company's performance and valuing its equity in order to assess its relative attractiveness as an investment Mana...

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9 pages

Written in 2024/2025

Grade A+

twishfrancis

Income statement summarizes the firms performance over a set period of time; reports the uses of assets and capital, what our shareholders earn over a time period Expenses include all the costs that the firm undertakes to create the revenues. This includes labor, materials, selling cost, depreciation, interest, and taxes. Gross profit Sales less Cost of Goods Sold. It summarizes the firm's performance prior to paying overhead, selling and administrative, or other fixed expenses Sales refers ...

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3 pages

Written in 2024/2025

Grade A+

twishfrancis

List the five equivalent methods for firm valuation 1. Adjusted Present Value 2. Free Cash Flow to Equity 3. Free Cash Flow to the Firm 4. Dividend Discount Model 5. Residual Income Fully list all the broad steps for calculating the Value Added by the firm with the ADJUSTED PRESENT VALUE method in Figure 10.3 1. Take the Free Cash Flow to the Firm and discount at the Unlevered Cost of Equity Capital to get the Value of the Unlevered Firm 2. Take the Tax Shield Benefit and discount at the Cost o...

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6 pages

Written in 2024/2025

Grade A+

twishfrancis

Calculating EBITDA -EBITDA is a non-GAAP metric so you usually won't find it in the 10K/Q -if you go by the literal def of EBITDA you only need to add back D&A (found in CFS) -most analysts also exclude stock based compensation expense (also in the CFS), so add this back as well -in addition to SBC and D&A, some companies provide disclosures that could justify making other adjustments to arrive at EBITDA Working Capital Accounts Receivable Inventory Accounts Payable Accrued Expenses & Deferred...

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4 pages

Written in 2024/2025

Grade A+

twishfrancis

What makes learning to model real estate assets challenging? Industry limitations to "one size fits all" modeling • Different players interact with real estate financial models in different ways Financial models are key to many real estate functions Such as: Private Equity Brokers Lenders Operators Asset Managers Property Management Formatting and Layout Always assume the model will be used by someone else • Be predictable • Create "plug-and-play" models to increase efficiency Color...

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11 pages

Written in 2024/2025

Grade A+

twishfrancis

1. Financial modeling can be used by managers for which of the following purposes? a. staff rotation planning purposes. b. analyzing financial relationships that are useful for decision making. c. forecasting political unrest. d. employee cross-training purposes. B 2. What enables analysts to test the interaction of economic variables in a variety of settings? a. A benchmark b. A PERT chart c. The value chain d. A financial model D 3. The relative proportion of various products sold by a compa...

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20 pages

Written in 2024/2025

Grade A+

twishfrancis

Accounting Principles and Standards Which of the following best describes accounting principles in general?They outline the fundamental rules and concepts and establish the framework on which detailed accounting standards are based. A sound accounting framework allows for all of the following benefits except:Identical items being reported on the financial statements of different companies 3.Conservatism principle:: It provides guidance on how to record transactions when there is uncer...

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23 pages

Written in 2023/2024

Grade A+

STANFORDGRADESS

Which are the two points that identify the break even unit sales?1. Where the Sales revenue line crosses the Total costs line 2. Where accounting profit hits zero and changes from negative to positive What is the formula for accounting profit?Revenue - Total Costs, because Describe and Explain the relationship between NPV and Year 1 Unit SalesThey have a direct relationship because PV of Net cash flows rises as year 1 unit sales rises Is NPV more sensitive to Year 1 Unit sales or year 2 ...

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6 pages

Written in 2023/2024

Grade A+

STANFORDGRADESS

Financial Modeling Exam Wallstreet Prep Questions And Verified Answers|Accurate Actual Exam With Frequently Tested Questions|With Study Guide|Already Graded A|Guaranteed Pass 2024.

5.0

(2)

40 pages

Written in 2023/2024

Grade A+

DrMedinaReed