Q Bank

Question 1

What is working capital? What does it mean if change in working capital is positive?

(*MS)

Question 2

What does NCI look like on the Income Statement? What about Minority Investments? Where else do these appear on the financial statements?

(*GS)

Question 3

Walk me through the Cash Flow Statement

(*GS)

Question 4

What happens to the financial statements if you raise debt?

(*GS)

Question 5

What are the three financial statements?

Question 6

What would cause no taxes? Example of company where that would happen.

(*EVR)

Question 7

If I had Net Income of $20, EBITDA of $20, what would explain that?

(*EVR)

Question 8

Depreciation goes up by $100, what happens to your EBITDA?

(*EVR)

Question 9

IF company has PE 20x, EV/EBITDA 10x, Interest Expense of 20m, 5% interest rate, depreciation of 20m and market cap of 200m, what is tax rate?

(*EVR)

Question 10

Why would two similar companies be trading at different multiples?

(*EVR)

Question 11

What is NOL? How does it affect Enterprise/Equity value?

(*EVR)

Question 12

You buy a piece of equipment for $100,000 with a 10-year useful life and no salvage value. What is the impact on the three statements after year 1? What about if you sell the equipment for $120,000?

(*MS)

Question 13

Walk me through the impact of sales x cogs xx on the 3 financial statements

(*GS)

Question 14

Rank EV/Rev, EV/EBITDA, EV/EBIT from largest to smallest

(*GS)

Question 15

Given NI, Cash, P/E, Debt, Ev/EBITDA - calculate EBITDA

(*EVR)

Answer 15

1) Find EqV: Net Income * P/E = EqV. 2) EqV to TEV bridge: EqV + Debt - Cash = TEV. 3) Find EBITDA: TEV / (TEV/EBITDA) = EBITDA

Question 16

If you’re the CFO of a company, how would you use the cash on balance sheet?

(*MS)

Question 17

Is Days Payable increasing from 30 -> 45 days a source or a use of cash?

(*EVR)

Question 18

What’s the impact on FCF when days accounts receivable increases?

(*EVR)

Question 19

Accounting question with acquisition of PPE funded by debt with cash and PIK interest, walk through impact at time of purchase and after 1 year.

(*EVR - RX)

Question 20

How does negative working capital affect cash flow?

(*MS)

Answer 20

• Increases CF

Question 21

Depreciation is understated by $10m and now is corrected– how does this change FCF? & Come up with an actual number that FCF increases by adding back more deprecation to FCF (tax effected Dep)

(*GS)

Question 22

How do you get to share price from your enterprise value?

(*GS)

Question 23

Walk through financials when $100M of debt is issued

(*GS)

Question 24

Impact on financial statements from $10 depreciation

(*GS)

Question 25

How could you increase EBITDA using different accounting practices

(*EVR)

Question 26

dug into why NCI and pref stock are subtracted from EqV

(*EVR)

Question 27

Gross Profit up $10, 50% margin. 20% tax rate. What happens to IS?

Question 28

No pen and paper- walk me through inventory sold for $20 at cost of $10

(*EVR)

Question 29

What is NCI? How does that effect your enterprise value

Question 30

What if I owned less than 20% of the company? How does that factor into my enterprise value?