Wall Street Prep Premium Exam 2024 n n n n n
Questions and Answers 100% Verified!!
n n n n n
What is generally not considered to be a pre-tax non-recurring (unusual or infrequent)
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item? - ANSWER-Extraordinary gains/losses
n n n n
what is false about depreciation and amortization - ANSWER-D&A may be classified
n n n n n n n n n n n
within interest expense
n n n
Company X's current assets increased by $40 million from 2007-2008 while the
n n n n n n n n n n n
companies current liabilities increased by $25 million over the same period. the cash
n n n n n n n n n n n n n
impact of the change in working capital was - ANSWER-a decrease of 15 million
n n n n n n n n n n n n n n
the final component of an earnings projection model is calculating interest expense. the
n n n n n n n n n n n n
ncalculation may create a circular reference because - ANSWER-interest expense
n n n n n n n n n
naffects net income, which affects FCF, which affects the amount of debt a company
n n n n n n n n n n n n n
npays down, which, in turn affects the interest expense, hence the circular reference
n n n n n n n n n n n n
a 10-q financial filing has all of the following characteristics except - ANSWER-issued
n n n n n n n n n n n n
four times a year.
n n n n
Depreciation Expense found in the SG&A line of the income statement for a n n n n n n n n n n n n
manufacturing firm would most likely be attributable to which of the following -
n n n n n n n n n n n n n
ANSWER-computers used by the accounting department
n n n n n n
If a company has projected revenues of $10 billion, a gross profit margin of 65%, and
n n n n n n n n n n n n n n n
nprojected SG&A expenses of $2billion, what is the company's operating (EBIT) margin?
n n n n n n n n n n n
n- ANSWER-45%
n
A company has the following information, 1. 2014 revenues of $5 billion,2013 Accounts
n n n n n n n n n n n n
receivable of $400 million, 2014 accounts receivable of $600 million, what are the days
n n n n n n n n n n n n n n
sales outstanding - ANSWER-36.5
n n n n
A company has the following information:
n n n n n
• 2014 Revenues of $8 billion
n n n n n
• 2014 COGS of $5 billion
n n n n n
• 2013 Accounts receivable of $400 million
n n n n n n
• 2014 Accounts receivable of $600 million
n n n n n n
• 2013 Inventories of $1 billion
n n n n n
• 2014 Inventories of $800 million
n n n n n
• 2013 Accounts payable of $250 million
n n n n n n
• 2014 Accounts payable of $300 million
n n n n n n
What are the inventory days for the company? - ANSWER-65.7 days
n n n n n n n n n n
, Which of the following is true - ANSWER-Coca Cola's brand name is not reflected as an
n n n n n n n n n n n n n n n
intangible asset on its balance sheet
n n n n n n
A company has the following information:
n n n n n
• 2014 share repurchase plan of $4 billion
n n n n n n n
• Average share price of $60 for the year 2013
n n n n n n n n n
• Expected EPS growth for 2014 of 10%
n n n n n n n
What should the number of shares repurchased by the company be in your financial
n n n n n n n n n n n n n
model? - ANSWER-60.6 million
n n n n
non-controlling interest - ANSWER-is an expense on the income statement and equity o n n n n n n n n n n n n
the balance sheet
n n n
A company has the following information:
n n n n n
• 2013 retained earnings balance of $12 billion
n n n n n n n
• Net income of $3.5 billion in 2014
n n n n n n n
• Capex of $200 million in 2014
n n n n n n
• Preferred dividends of $100 million in 2014
n n n n n n n
• Common dividends of $400 million in 2014
n n n n n n n
What is the retained earnings balance at the end of 2014? - ANSWER-15 billion
n n n n n n n n n n n n n
in order to find out how much cash is available to pay down short term debt, such as
n n n n n n n n n n n n n n n n n
nrevolving credit line, you must take - ANSWER-beginning cash balance + pre-debt cash
n n n n n n n n n n n n
nflows - min. cash balance - required principal payments of LT and other debt
n n n n n n n n n n n n n
to calculate interest expense in the future, you should do which of the following -
n n n n n n n n n n n n n n
nANSWER-apply a weighted average interest rate times the average debt balance over n n n n n n n n n n n
nthe course of the year n n n n
enterprise (transaction) value represents the: - ANSWER-value of all capital invested in
n n n n n n n n n n n
a business
n n
A debt holder would be primarily concerned with which of the following multiples?
n n n n n n n n n n n n
I. Enterprise (Transaction) Value / EBITDA
n n n n n
II. Price/Earnings
n
III. Enterprise (Transaction) Value / Sales - ANSWER-1 and 3 only
n n n n n n n n n n
On January 1, 2014, shares of Company X trade at $6.50 per share, with 400 million
n n n n n n n n n n n n n n n
shares outstanding. The company has net debt of $300 million. After building an
n n n n n n n n n n n n n
earnings model for Company X, you have projected free cash flow for each year
n n n n n n n n n n n n n n
through 2020 as follows:
n n n n
Year 2014 2015 2016 2017 2018 2019 2020
n n n n n n n
Free Cash Flow 110 120 150 170 200 250 280
n n n n n n n n n
Questions and Answers 100% Verified!!
n n n n n
What is generally not considered to be a pre-tax non-recurring (unusual or infrequent)
n n n n n n n n n n n n
item? - ANSWER-Extraordinary gains/losses
n n n n
what is false about depreciation and amortization - ANSWER-D&A may be classified
n n n n n n n n n n n
within interest expense
n n n
Company X's current assets increased by $40 million from 2007-2008 while the
n n n n n n n n n n n
companies current liabilities increased by $25 million over the same period. the cash
n n n n n n n n n n n n n
impact of the change in working capital was - ANSWER-a decrease of 15 million
n n n n n n n n n n n n n n
the final component of an earnings projection model is calculating interest expense. the
n n n n n n n n n n n n
ncalculation may create a circular reference because - ANSWER-interest expense
n n n n n n n n n
naffects net income, which affects FCF, which affects the amount of debt a company
n n n n n n n n n n n n n
npays down, which, in turn affects the interest expense, hence the circular reference
n n n n n n n n n n n n
a 10-q financial filing has all of the following characteristics except - ANSWER-issued
n n n n n n n n n n n n
four times a year.
n n n n
Depreciation Expense found in the SG&A line of the income statement for a n n n n n n n n n n n n
manufacturing firm would most likely be attributable to which of the following -
n n n n n n n n n n n n n
ANSWER-computers used by the accounting department
n n n n n n
If a company has projected revenues of $10 billion, a gross profit margin of 65%, and
n n n n n n n n n n n n n n n
nprojected SG&A expenses of $2billion, what is the company's operating (EBIT) margin?
n n n n n n n n n n n
n- ANSWER-45%
n
A company has the following information, 1. 2014 revenues of $5 billion,2013 Accounts
n n n n n n n n n n n n
receivable of $400 million, 2014 accounts receivable of $600 million, what are the days
n n n n n n n n n n n n n n
sales outstanding - ANSWER-36.5
n n n n
A company has the following information:
n n n n n
• 2014 Revenues of $8 billion
n n n n n
• 2014 COGS of $5 billion
n n n n n
• 2013 Accounts receivable of $400 million
n n n n n n
• 2014 Accounts receivable of $600 million
n n n n n n
• 2013 Inventories of $1 billion
n n n n n
• 2014 Inventories of $800 million
n n n n n
• 2013 Accounts payable of $250 million
n n n n n n
• 2014 Accounts payable of $300 million
n n n n n n
What are the inventory days for the company? - ANSWER-65.7 days
n n n n n n n n n n
, Which of the following is true - ANSWER-Coca Cola's brand name is not reflected as an
n n n n n n n n n n n n n n n
intangible asset on its balance sheet
n n n n n n
A company has the following information:
n n n n n
• 2014 share repurchase plan of $4 billion
n n n n n n n
• Average share price of $60 for the year 2013
n n n n n n n n n
• Expected EPS growth for 2014 of 10%
n n n n n n n
What should the number of shares repurchased by the company be in your financial
n n n n n n n n n n n n n
model? - ANSWER-60.6 million
n n n n
non-controlling interest - ANSWER-is an expense on the income statement and equity o n n n n n n n n n n n n
the balance sheet
n n n
A company has the following information:
n n n n n
• 2013 retained earnings balance of $12 billion
n n n n n n n
• Net income of $3.5 billion in 2014
n n n n n n n
• Capex of $200 million in 2014
n n n n n n
• Preferred dividends of $100 million in 2014
n n n n n n n
• Common dividends of $400 million in 2014
n n n n n n n
What is the retained earnings balance at the end of 2014? - ANSWER-15 billion
n n n n n n n n n n n n n
in order to find out how much cash is available to pay down short term debt, such as
n n n n n n n n n n n n n n n n n
nrevolving credit line, you must take - ANSWER-beginning cash balance + pre-debt cash
n n n n n n n n n n n n
nflows - min. cash balance - required principal payments of LT and other debt
n n n n n n n n n n n n n
to calculate interest expense in the future, you should do which of the following -
n n n n n n n n n n n n n n
nANSWER-apply a weighted average interest rate times the average debt balance over n n n n n n n n n n n
nthe course of the year n n n n
enterprise (transaction) value represents the: - ANSWER-value of all capital invested in
n n n n n n n n n n n
a business
n n
A debt holder would be primarily concerned with which of the following multiples?
n n n n n n n n n n n n
I. Enterprise (Transaction) Value / EBITDA
n n n n n
II. Price/Earnings
n
III. Enterprise (Transaction) Value / Sales - ANSWER-1 and 3 only
n n n n n n n n n n
On January 1, 2014, shares of Company X trade at $6.50 per share, with 400 million
n n n n n n n n n n n n n n n
shares outstanding. The company has net debt of $300 million. After building an
n n n n n n n n n n n n n
earnings model for Company X, you have projected free cash flow for each year
n n n n n n n n n n n n n n
through 2020 as follows:
n n n n
Year 2014 2015 2016 2017 2018 2019 2020
n n n n n n n
Free Cash Flow 110 120 150 170 200 250 280
n n n n n n n n n
