AGC technical test Flashcards
what is the square root of 0.9?
0.95
what is the formula and definition for gross revenue churn?
(downsells + churn) / starting total revenue
percentage of recurring revenue a company lost from cancellations, non-renewals, or contractions (i.e. downgrade to a lower-tier account) in a specific period
what is revenue chrun?
percentage of recurring revenue that a company lost due to customer cancellations, non-renewals, and account downgrades in a given period
net MRR churn =
= (churned MRR - expansion MRR) / beginning MRR
expansion MRR
upselling, cross-selling, and price increases
churned MRR
cancellations, non-renewals, and account downgrades
MRR
the proportion of a company’s total revenue per month that is considered predictable due to being contractual (subscription)
net revenue chrun
gross revenue churn net of expansion revenue
upselling
tactics to derive more incremental revenue from existing customers by offering incentives, such as upgrades to higher tier plans
cross-selling
encouraging existing customers to purchase complimentary products or services that enhance the original purchase
CAPM
Rf + B(Rm - Rf)
A customer pays on the first day of the calendar year in advance for a 12 month subscription to ABC Application Software. The annual subscription costs the customer $1,200,000. How much revenue has been recognized YTD and what is the deferred revenue balanced on March 1st?
$200,000 revenue, $1,000,000 deferred revenue
My commissions are 1% of renewal bookings. I have $15M of maintenance revenue that renews 75% and $5M of Sass revenue at 90%. What are my total commissions?
$157,500
I have 200 options that start vesting on 10/1/2018. The options accelerate given the option agreement. The options have a 4 year, 1 years cliff vesting schedule. Todays date is 10/2/2019 How many options have vested?
50
vesting
process of gaining full legal rights to something
There are 100 options that start vesting on 10/1/2018. there are also 100 options that start vesting on 10/1/2017. Both that a 4 year, 1 years cliff vesting schedule. Today’s date is 10/2/2019. How many options have vested?
150
In case you have the change to evaluate the financial viability of the company which statement would you chose?
cash flow statement
what is WACC
firm’s average after-tax cost of capital from all sources, including common stock, preferred stock, bonds, and other forms of debt
capitalizing employee labor costs will likely flow through which expense line item at a later date?
depreciation bc they are being removed from the IS and being capitalized to the BS
ABC Application Software billed $2,000,000 in February for services it rendered in February. The customer paid the bill in full on March 20th. On march 15th how much total revenue has been recognized YTD and what is the AR balance associated with the Bill?
$2,000,000 Revenue, $2,000,000 AR
What is the correct formula for calculation of simple interest?
P x r x t
A company is generating $10M EBITDA at exit with an exit multiple of 15x. There is a 15% management rollover ownership. Initial sponsor equity was 35M. What is my CoC return?
2.6x
[150 - (35+22.5)] / 35
I have 200 options with a strike price of $0.10. The common price per share is $1.00. What is the total execution cost of the options?
20
when finding a comparable company, which of these things would you not include?
of customers
what is the formula for LTV?
Avg ARR / gross revenue churn
I have starting shareholders equity of $8.1M. Management is rolling $5.158M, and sponsor is putting in $17.465M of equity. What is the new shareholders equity?
$8.1M
I am buying a company for 7x revenue. Revenue is $20M. I have a 2x revenue term loan, and management is rolling $20M. There are $10M of transaction expenses. What is my sponsor equity?
$80M
How do you unlever Beta?
B(L) / [1 + (1-t) x D/E]
What line item creates circularity in a 3-statement LBO?
interest expense
