breaking into wall street questions with complete solutions (graded A+).

breaking into wall street questions with
complete solutions (graded A+)
company value - answer Cash Flow / (Discount Rate - Cash Flow Growth
Rate)


why do we need the 3 financial statements - answer estimate cash flow
so you can estimate the value of the company


order of line items of income statement - answer revenue - COGS =
Gross Profit - Operating Expenses = Operating Income +/- Other
Income/Expense = Pretax Income - taxes = net income


income statement - answer tracks revenues and expenses over a
specific period; shows the things that impact taxes


Free Cash Flow - answer cash flow from operations - CapEx


net working capital - answer current assets (excluding cash and
investments) - current liabilities (excluding debt)


change in net working capital - answer old net working capital - new net
working capital

, positive change in net working capital - answer frees up cash


negative change in net working capital - answer uses cash


EBIT - answer earnings before interest and tax; operating income


EBITDA - answer Earnings before interest, taxes, depreciation, and
amortization; operating income + D&A


NOPAT - answer net operating profit after taxes; operating income*(1-
tax rate)


Is EBIT unlevered or levered - answer unlevered


is EBITDA unlevered or levered - answer unlevered


is NOPAT unlevered or levered - answer unlevered


What does DCF stand for? - answer Discounted Cash Flow Analysis


what kind of valuation is DCF - answer intrinsic