WALL STREET PREP PREMIUM EXAM TRANSACTION COMPS
MODELING WALL STREET PREP EXAM | QUESTIONS AND ANSWERS
| VERIFIED AND WELL DETAILED ANSWERS | LATEST EXAM
UPDATE
What is generally not considered to be a pre-tax non-recurring (unusual or
infrequent) item? - CORRECT ANSWER - Extraordinary gains/losses
what is false about depreciation and amortization - CORRECT ANSWER - D&A
may be classified within interest expense
Company X's current assets increased by $40 million from 2007-2008 while the
companies current liabilities increased by $25 million over the same period. the
cash impact of the change in working capital was - CORRECT ANSWER - a
decrease of 15 million
the final component of an earnings projection model is calculating interest
expense. the calculation may create a circular reference because - CORRECT
ANSWER - interest expense affects net income, which affects FCF, which affects
the amount of debt a company pays down, which, in turn affects the interest
expense, hence the circular reference
a 10-q financial filing has all of the following characteristics except - CORRECT
ANSWER - issued four times a year.
Depreciation Expense found in the SG&A line of the income statement for a
manufacturing firm would most likely be attributable to which of the following -
CORRECT ANSWER - computers used by the accounting department
,If a company has projected revenues of $10 billion, a gross profit margin of 65%,
and projected SG&A expenses of $2billion, what is the company's operating
(EBIT) margin? - CORRECT ANSWER - 45%
A company has the following information, 1. 2014 revenues of $5 billion,2013
Accounts receivable of $400 million, 2014 accounts receivable of $600 million,
what are the days sales outstanding - CORRECT ANSWER - 36.5
A company has the following information:
• 2014 Revenues of $8 billion
• 2014 COGS of $5 billion
• 2013 Accounts receivable of $400 million
• 2014 Accounts receivable of $600 million
• 2013 Inventories of $1 billion
• 2014 Inventories of $800 million
• 2013 Accounts payable of $250 million
• 2014 Accounts payable of $300 million
What are the inventory days for the company? - CORRECT ANSWER - 65.7
days
Which of the following is true - CORRECT ANSWER - Coca Cola's brand name
is not reflected as an intangible asset on its balance sheet
A company has the following information:
• 2014 share repurchase plan of $4 billion
, • Average share price of $60 for the year 2013
• Expected EPS growth for 2014 of 10%
What should the number of shares repurchased by the company be in your
financial model? - CORRECT ANSWER - 60.6 million
non-controlling interest - CORRECT ANSWER - is an expense on the income
statement and equity o the balance sheet
A company has the following information:
• 2013 retained earnings balance of $12 billion
• Net income of $3.5 billion in 2014
• Capex of $200 million in 2014
• Preferred dividends of $100 million in 2014
• Common dividends of $400 million in 2014
What is the retained earnings balance at the end of 2014? - CORRECT ANSWER
- 15 billion
in order to find out how much cash is available to pay down short term debt, such
as revolving credit line, you must take - CORRECT ANSWER - beginning cash
balance + pre-debt cash flows - min. cash balance - required principal payments of
LT and other debt
to calculate interest expense in the future, you should do which of the following -
CORRECT ANSWER - apply a weighted average interest rate times the average
debt balance over the course of the year
MODELING WALL STREET PREP EXAM | QUESTIONS AND ANSWERS
| VERIFIED AND WELL DETAILED ANSWERS | LATEST EXAM
UPDATE
What is generally not considered to be a pre-tax non-recurring (unusual or
infrequent) item? - CORRECT ANSWER - Extraordinary gains/losses
what is false about depreciation and amortization - CORRECT ANSWER - D&A
may be classified within interest expense
Company X's current assets increased by $40 million from 2007-2008 while the
companies current liabilities increased by $25 million over the same period. the
cash impact of the change in working capital was - CORRECT ANSWER - a
decrease of 15 million
the final component of an earnings projection model is calculating interest
expense. the calculation may create a circular reference because - CORRECT
ANSWER - interest expense affects net income, which affects FCF, which affects
the amount of debt a company pays down, which, in turn affects the interest
expense, hence the circular reference
a 10-q financial filing has all of the following characteristics except - CORRECT
ANSWER - issued four times a year.
Depreciation Expense found in the SG&A line of the income statement for a
manufacturing firm would most likely be attributable to which of the following -
CORRECT ANSWER - computers used by the accounting department
,If a company has projected revenues of $10 billion, a gross profit margin of 65%,
and projected SG&A expenses of $2billion, what is the company's operating
(EBIT) margin? - CORRECT ANSWER - 45%
A company has the following information, 1. 2014 revenues of $5 billion,2013
Accounts receivable of $400 million, 2014 accounts receivable of $600 million,
what are the days sales outstanding - CORRECT ANSWER - 36.5
A company has the following information:
• 2014 Revenues of $8 billion
• 2014 COGS of $5 billion
• 2013 Accounts receivable of $400 million
• 2014 Accounts receivable of $600 million
• 2013 Inventories of $1 billion
• 2014 Inventories of $800 million
• 2013 Accounts payable of $250 million
• 2014 Accounts payable of $300 million
What are the inventory days for the company? - CORRECT ANSWER - 65.7
days
Which of the following is true - CORRECT ANSWER - Coca Cola's brand name
is not reflected as an intangible asset on its balance sheet
A company has the following information:
• 2014 share repurchase plan of $4 billion
, • Average share price of $60 for the year 2013
• Expected EPS growth for 2014 of 10%
What should the number of shares repurchased by the company be in your
financial model? - CORRECT ANSWER - 60.6 million
non-controlling interest - CORRECT ANSWER - is an expense on the income
statement and equity o the balance sheet
A company has the following information:
• 2013 retained earnings balance of $12 billion
• Net income of $3.5 billion in 2014
• Capex of $200 million in 2014
• Preferred dividends of $100 million in 2014
• Common dividends of $400 million in 2014
What is the retained earnings balance at the end of 2014? - CORRECT ANSWER
- 15 billion
in order to find out how much cash is available to pay down short term debt, such
as revolving credit line, you must take - CORRECT ANSWER - beginning cash
balance + pre-debt cash flows - min. cash balance - required principal payments of
LT and other debt
to calculate interest expense in the future, you should do which of the following -
CORRECT ANSWER - apply a weighted average interest rate times the average
debt balance over the course of the year
