Fmva Practice Test Questions With Correct Answers

FMVA PRACTICE TEST



Using the financial statements attached, what is the company's return on equity in year
5? - CORRECT ANSWERS ✅✅ -27.15%

Using the financial statements attached, what is the company's return on assets in year
2? - CORRECT ANSWERS ✅✅ -25.09%

Using the financial statements attached, what is the company's operating profit (EBIT)
margin in year 1? - CORRECT ANSWERS ✅✅ -21.75%

Using the financial statements attached, what is the company's net profit margin in year
1? - CORRECT ANSWERS ✅✅ -14.71%

Using the financial statements attached, what is the company's effective tax rate in year
2? - CORRECT ANSWERS ✅✅ -28.06%

Using the financial statements attached, what is the company's total asset turnover ratio
in year 3? - CORRECT ANSWERS ✅✅ -1.28x

Using the financial statements attached, what is the company's accounts receivable
days ratio in year 1? - CORRECT ANSWERS ✅✅ -4.0 days

Using the financial statements attached, what is the company's inventory days ratio in
year 5? - CORRECT ANSWERS ✅✅ -188.8 days

Using the financial statements attached, what is the company's cash days ratio in year
3? - CORRECT ANSWERS ✅✅ -95.4 days

Using the financial statements attached, what is the company's debt to equity ratio in
year 1? - CORRECT ANSWERS ✅✅ -0.00x

,Using the financial statements attached, what is the company's total assets to equity
ratio in year 2? - CORRECT ANSWERS ✅✅ -1.32x

Using the financial statements attached, what is the company's current ratio in year 3? -
CORRECT ANSWERS ✅✅ -2.41x

When analyzing the income statement, which line item do you typically use as the
denominator in the ratio? - CORRECT ANSWERS ✅✅ -Sales

What is typically NOT included in a checklist used to identify appropriate peer group
companies? - CORRECT ANSWERS ✅✅ -Same type of management team

What is the correct formula for calculating NOPAT? - CORRECT ANSWERS ✅✅ -
EBIT x (1 - Tax Rate)

When conducting financial analysis, what is the recommended best practice for
minimum number of years of financial statements? - CORRECT ANSWERS ✅✅ -5
years

What are the three ROE levers of the DuPont pyramid? - CORRECT ANSWERS ✅✅
-Net Profit Margin x Total Asset Turnover x Financial Leverage

Which of the following is NOT a characteristic of horizontal analysis? - CORRECT
ANSWERS ✅✅ -It is most effective when comparing one period with each other.

Which current asset or liability is omitted from this ratio? - CORRECT ANSWERS
✅✅ -Inventory

Which of the following retailers is most likely to have the lowest inventory days? -
CORRECT ANSWERS ✅✅ -A grocery store / supermarket

The proper structure of a 3-statement model should contain which of the following
modules? - CORRECT ANSWERS ✅✅ -Inputs, Calculations, Outputs

Which of the following is a best practice for financial model inputs? - CORRECT
ANSWERS ✅✅ -Data should only be entered once

What is the formula for the Capital Asset Turnover Ratio? - CORRECT ANSWERS
✅✅ -Sales/Property, Plant & Equipment

According to the course, a 3-statement financial model can be used for which of the
following purposes? Select ALL that apply. - CORRECT ANSWERS ✅✅ -Strategic
planning, Corporate transactions, and Investment decisions

, Complex financial models are all of the following EXCEPT: - CORRECT ANSWERS
✅✅ -They are easy to audit

Which of the following items are considered "operating activities" on the cash flow
statement? Select ALL correct answers. - CORRECT ANSWERS ✅✅ -Changes in
operating assets and liabilities, Net income, and Depreciation

According to the course, which is the best method for calculating interest expense? -
CORRECT ANSWERS ✅✅ -Interest Rate x Average Debt Balance

Forecast the Year 1 gross profit on the previous year's number and the assumptions. -
CORRECT ANSWERS ✅✅ -47,742

Calculate EBITDA and EBIT, respectively, given the information in the Excel file. -
CORRECT ANSWERS ✅✅ -3,631; 1,356

Calculate the number of accounts receivable days, given the information in the Excel
file. Assume 365 days in the year. - CORRECT ANSWERS ✅✅ -45.4 days

Forecast the company's inventory, given the information in the Excel file. Assume 365
days in the year. - CORRECT ANSWERS ✅✅ -237,904

What is the cash impact from working capital in Year 2? - CORRECT ANSWERS
✅✅ -125,766

What is the ending retained earnings balance, given the information in the Excel file? -
CORRECT ANSWERS ✅✅ -10,475

What is the cash flow from operating activities given the information in the Excel file? -
CORRECT ANSWERS ✅✅ -13,425

What is the ending cash balance, given the information in the Excel file? - CORRECT
ANSWERS ✅✅ -2,188

Which of the following is NOT one of the valuation techniques discussed in this course?
- CORRECT ANSWERS ✅✅ -Residual Income Approach

Which of the following are differences between intrinsic and relative valuation? Select
ALL that apply. - CORRECT ANSWERS ✅✅ -Intrinsic valuation looks at a
company's fundamentals in relative isolation AND Relative valuation is more likely to
reflect the market's "mood"

Calculate the company's current net debt given the information in the Excel file. -
CORRECT ANSWERS ✅✅ -$21,976