WALL STREET PREP PREMIUM EXAM| 50 ACTUAL
QUESTIONS AND ANSWERS
RATED A+
1. What is generally not considered to be a pre-tax non-recurring (unusual or
infrequent) item?
ANSWER >> Extraordinary gains/losses
2. what is false about depreciation and amortization
ANSWER >> D&A may be classified within interest expense
3. 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
ANSWER >> a decrease of 15 million
4. the final component of an earnings projection model is calculating interest
expense. the calculation may create a circular reference because
ANSWER >> interest expense attects net income, which attects FCF, which attects the amount of debt a
company pays down, which, in turn attects the interest expense, hence the circular reference
5. a 10-q financial filing has all of the following characteristics except
ANSWER >> issued four times a year.
6. 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 follow-
https://www.stuvia.com/user/MBOFFIN 1/
19
, ing
ANSWER >> computers used by the accounting department
7. 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?
ANSWER >> 45%
8. 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
ANSWER >> 36.5
9. A company has the following information ANSWER >>
• 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?
https://www.stuvia.com/user/MBOFFIN 2/
19
,ANSWER >> 65.7 days
https://www.stuvia.com/user/MBOFFIN 3/
19
QUESTIONS AND ANSWERS
RATED A+
1. What is generally not considered to be a pre-tax non-recurring (unusual or
infrequent) item?
ANSWER >> Extraordinary gains/losses
2. what is false about depreciation and amortization
ANSWER >> D&A may be classified within interest expense
3. 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
ANSWER >> a decrease of 15 million
4. the final component of an earnings projection model is calculating interest
expense. the calculation may create a circular reference because
ANSWER >> interest expense attects net income, which attects FCF, which attects the amount of debt a
company pays down, which, in turn attects the interest expense, hence the circular reference
5. a 10-q financial filing has all of the following characteristics except
ANSWER >> issued four times a year.
6. 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 follow-
https://www.stuvia.com/user/MBOFFIN 1/
19
, ing
ANSWER >> computers used by the accounting department
7. 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?
ANSWER >> 45%
8. 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
ANSWER >> 36.5
9. A company has the following information ANSWER >>
• 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?
https://www.stuvia.com/user/MBOFFIN 2/
19
,ANSWER >> 65.7 days
https://www.stuvia.com/user/MBOFFIN 3/
19
