Transaction Comps Modeling Wall Street
Prep Exam with Questions and Answers
What is generally not considered to be a pre-tax non-
recurring (unusual or infrequent) item? - correct answers-
Extraordinary gains/losses
what is false about depreciation and amortization -
correct answers-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
answers-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 answers-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 answers-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
answers-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 answers-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 answers-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
answers-65.7 days
, Which of the following is true - correct answers-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 answers-
60.6 million
non-controlling interest - correct answers-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 answers-15 billion
Prep Exam with Questions and Answers
What is generally not considered to be a pre-tax non-
recurring (unusual or infrequent) item? - correct answers-
Extraordinary gains/losses
what is false about depreciation and amortization -
correct answers-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
answers-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 answers-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 answers-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
answers-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 answers-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 answers-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
answers-65.7 days
, Which of the following is true - correct answers-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 answers-
60.6 million
non-controlling interest - correct answers-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 answers-15 billion
