100% satisfaction guarantee Immediately available after payment Both online and in PDF No strings attached
logo-home
Previously searched by you
Previously searched by you
logo
Trading Comps Modeling Wall StreetPrep – update veryfied questions with correct answers guaranteed pass. $11.99   Add to cart
Quickly navigate to
Preview
  2.  
  3. Wall Street Prep
  4.  
  5. Wall Street Prep

Exam (elaborations)

Trading Comps Modeling Wall StreetPrep – update veryfied questions with correct answers guaranteed pass.
 0 view  0 purchase
  • Course
  • Wall Street Prep
  • Institution
  • Wall Street Prep

Trading Comps Modeling Wall StreetPrep – update veryfied questions with correct answers guaranteed pass.Trading Comps Modeling Wall StreetPrep – update veryfied questions with correct answers guaranteed pass.Trading Comps Modeling Wall StreetPrep – update veryfied questions with correct ans...

[Show more]

Preview 2 out of 9  pages

Document information

  • November 20, 2024
  • 9
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

Subjects

  • trading comps modeling wall streetprep update ve

Written for

  • Wall Street Prep
  • Wall Street Prep

Seller

avatar-seller
Wisebooks

Reviews received

Content preview

Trading Comps Modeling Wall StreetPrep – update
Q&A
•



Whatbvisbvgenerallybvnotbvconsideredbvtobvbebvabvpre-taxbvnon-
recurringbv(unusualbvorbvinfrequent)bvitem?bv-bvExtraordinarybvgains/losses

whatbvisbvfalsebvaboutbvdepreciationbvandbvamortizationbv-
bvD&Abvmaybvbebvclassifiedbvwithinbvinterestbvexpense



CompanybvX'sbvcurrentbvassetsbvincreasedbvbybv$40bvmillionbvfrombv2007-
2008bvwhilebvthebvcompaniesbvcurrentbvliabilitiesbvincreasedbvbybv$25bvmillionbvoverbvthebv
samebvperiod.bvthebvcashbvimpactbvofbvthebvchangebvinbvworkingbvcapitalbvwasbv-
bvabvdecreasebvofbv15bvmillion



thebvfinalbvcomponentbvofbvanbvearningsbvprojectionbvmodelbvisbvcalculatingbvinterestbvexp
ense.bvthebvcalculationbvmaybvcreatebvabvcircularbvreferencebvbecausebv-
bvinterestbvexpensebvaffectsbvnetbvincome,bvwhichbvaffectsbvFCF,bvwhichbvaffectsbvthebvam

ountbvofbvdebtbvabvcompanybvpaysbvdown,bvwhich,bvinbvturnbvaffectsbvthebvinterestbvexpens
e,bvhencebvthebvcircularbvreference

abv10-qbvfinancialbvfilingbvhasbvallbvofbvthebvfollowingbvcharacteristicsbvexceptbv-
bvissuedbvfourbvtimesbvabvyear.



DepreciationbvExpensebvfoundbvinbvthebvSG&Abvlinebvofbvthebvincomebvstatementbvforbvabv
manufacturingbvfirmbvwouldbvmostbvlikelybvbebvattributablebvtobvwhichbvofbvthebvfollowingbv-
bvcomputersbvusedbvbybvthebvaccountingbvdepartment



Ifbvabvcompanybvhasbvprojectedbvrevenuesbvofbv$10bvbillion,bvabvgrossbvprofitbvmarginbvofbv6
5%,bvandbvprojectedbvSG&Abvexpensesbvofbv$2billion,bvwhatbvisbvthebvcompany'sbvoperati
ngbv(EBIT)bvmargin?bv-bv45%

Abvcompanybvhasbvthebvfollowingbvinformation,bv1.bv2014bvrevenuesbvofbv$5bvbillion,2013bv
Accountsbvreceivablebvofbv$400bvmillion,bv2014bvaccountsbvreceivablebvofbv$600bvmillion,bv
whatbvarebvthebvdaysbvsalesbvoutstandingbv-bv36.5

Abvcompanybvhasbvthebvfollowingbvinformation:
•bv2014bvRevenuesbvofbv$8bvbillion
•bv2014bvCOGSbvofbv$5bvbillion
•bv2013bvAccountsbvreceivablebvofbv$400bvmillion
•bv2014bvAccountsbvreceivablebvofbv$600bvmillion
•bv2013bvInventoriesbvofbv$1bvbillion
•bv2014bvInventoriesbvofbv$800bvmillion
•bv2013bvAccountsbvpayablebvofbv$250bvmillion
•bv2014bvAccountsbvpayablebvofbv$300bvmillion
Whatbvarebvthebvinventorybvdaysbvforbvthebvcompany?bv-bv65.7bvdays

, Trading Comps Modeling Wall StreetPrep – update
Q&A
•



Whichbvofbvthebvfollowingbvisbvtruebv-
bvCocabvCola'sbvbrandbvnamebvisbvnotbvreflectedbvasbvanbvintangiblebvassetbvonbvitsbvbalanc

ebvsheet

Abvcompanybvhasbvthebvfollowingbvinformation:
•bv2014bvsharebvrepurchasebvplanbvofbv$4bvbillion
•bvAveragebvsharebvpricebvofbv$60bvforbvthebvyearbv2013
•bvExpectedbvEPSbvgrowthbvforbv2014bvofbv10%
Whatbvshouldbvthebvnumberbvofbvsharesbvrepurchasedbvbybvthebvcompanybvbebvinbvyourbvfi
nancialbvmodel?bv-bv60.6bvmillion

non-controllingbvinterestbv-
bvisbvanbvexpensebvonbvthebvincomebvstatementbvandbvequitybvobvthebvbalancebvsheet



Abvcompanybvhasbvthebvfollowingbvinformation:
•bv2013bvretainedbvearningsbvbalancebvofbv$12bvbillion
•bvNetbvincomebvofbv$3.5bvbillionbvinbv2014
•bvCapexbvofbv$200bvmillionbvinbv2014
•bvPreferredbvdividendsbvofbv$100bvmillionbvinbv2014
•bvCommonbvdividendsbvofbv$400bvmillionbvinbv2014
Whatbvisbvthebvretainedbvearningsbvbalancebvatbvthebvendbvofbv2014?bv-bv15bvbillion

inbvorderbvtobvfindbvoutbvhowbvmuchbvcashbvisbvavailablebvtobvpaybvdownbvshortbvtermbvdebt,b
vsuchbvasbvrevolvingbvcreditbvline,bvyoubvmustbvtakebv-bvbeginningbvcashbvbalancebv+bvpre-

debtbvcashbvflowsbv-bvmin.bvcashbvbalancebv-
bvrequiredbvprincipalbvpaymentsbvofbvLTbvandbvotherbvdebt



tobvcalculatebvinterestbvexpensebvinbvthebvfuture,bvyoubvshouldbvdobvwhichbvofbvthebvfollowin
gbv-
bvapplybvabvweightedbvaveragebvinterestbvratebvtimesbvthebvaveragebvdebtbvbalancebvoverbvt

hebvcoursebvofbvthebvyear

enterprisebv(transaction)bvvaluebvrepresentsbvthe:bv-
bvvaluebvofbvallbvcapitalbvinvestedbvinbvabvbusiness



Abvdebtbvholderbvwouldbvbebvprimarilybvconcernedbvwithbvwhichbvofbvthebvfollowingbvmultipl
es?
I.bvEnterprisebv(Transaction)bvValuebv/bvEBITDA
II.bvPrice/Earnings
III.bvEnterprisebv(Transaction)bvValuebv/bvSalesbv-bv1bvandbv3bvonly

OnbvJanuarybv1,bv2014,bvsharesbvofbvCompanybvXbvtradebvatbv$6.50bvperbvshare,bvwithbv40
0bvmillionbvsharesbvoutstanding.bvThebvcompanybvhasbvnetbvdebtbvofbv$300bvmillion.bvAfterb
vbuildingbvanbvearningsbvmodelbvforbvCompanybvX,bvyoubvhavebvprojectedbvfreebvcashbvflow

bvforbveachbvyearbvthroughbv2020bvasbvfollows:

The benefits of buying summaries with Stuvia:

Guaranteed quality through customer reviews

Guaranteed quality through customer reviews

Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.

Quick and easy check-out

Quick and easy check-out

You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.

Focus on what matters

Focus on what matters

Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!

Frequently asked questions

What do I get when I buy this document?

You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.

Satisfaction guarantee: how does it work?

Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.

Who am I buying these notes from?

Stuvia is a marketplace, so you are not buying this document from us, but from seller Wisebooks. Stuvia facilitates payment to the seller.

Will I be stuck with a subscription?

No, you only buy these notes for $11.99. You're not tied to anything after your purchase.

Can Stuvia be trusted?

4.6 stars on Google & Trustpilot (+1000 reviews)

75057 documents were sold in the last 30 days

Founded in 2010, the go-to place to buy study notes for 14 years now

Start selling
$11.99
  • (0)
  Add to cart