Introduction to Financial Statement Modeling

Which financial statement is generally the starting point for financial statement modeling for a manufacturing company?

Which approach to revenue modeling begins at the level of the overall economy?

A 'growth relative to GDP growth' forecast is an example of which modeling approach?

Which of the following is considered a bottom-up approach to modeling revenue?

A retailer forecasts revenue by multiplying the number of stores by the average sales per store. This is an example of:

If nominal GDP is forecast to grow at 5 percent and a company's revenue is expected to grow 100 basis points faster than GDP, what is the forecast revenue growth rate?

A company has a 10 percent market share of a total industry with sales of 500 million. If the industry is forecast to grow by 4 percent and the company maintains its market share, what is the revenue forecast for next year?

Nominal GDP growth is composed of:

In the context of financial statement modeling, what is the 'hybrid approach'?

Which type of cost is typically best modeled as a percentage of revenue?

How are fixed costs typically treated in financial models?

Economies of scale are typically indicated by which of the following correlations?

In Year 1, a company has Sales of 100 and EBIT of 20. In Year 2, Sales rise to 150 and EBIT rises to 45. What does the change in Operating Profit Margin (OPM) suggest?

Forecasting Cost of Goods Sold (COGS) as a percentage of sales is equivalent to forecasting:

Which component of Selling, General, and Administrative (SG&A) expenses is most likely to be variable?

When forecasting financing costs, interest income generally depends on:

Which tax rate is calculated as the reported income tax expense divided by pre-tax income?

Which tax rate is most relevant for forecasting cash flows?

A company has Pre-tax Income of 100, reports Tax Expense of 25, and pays Cash Taxes of 17. What is the Cash Tax Rate?

How should analysts typically handle 'unusual charges' when forecasting future earnings?

What is 'cannibalization' in the context of revenue modeling?

Normalized earnings represent:

Most Discounted Cash Flow (DCF) models rely on a perpetuity calculation which assumes:

Which balance sheet item typically flows directly from the income statement?

Working capital accounts such as inventory are best modeled using:

In a sales-based pro forma model, which is typically the first step?

When forecasting Capital Expenditures (Capex), maintenance capex should normally be:

The 'Illusion of Control' bias refers to:

Conservatism bias in forecasting is also known as:

If an analyst makes a small adjustment to a previous forecast despite significant new information, they are exhibiting:

Base-rate neglect is a form of which bias?

Using an 'outside view' in forecasting means:

Which bias is described as the tendency to look for and notice what supports prior beliefs?

What is a suggested method to mitigate confirmation bias?

According to the text, how should government be viewed in a competitive analysis?

If a company raises prices by 10 percent and unit volume falls by 5 percent, this implies demand is:

In an inflationary environment, what happens if a company raises prices too late?

If selling prices increase by 10 percent and input costs increase by 10 percent, while volume remains constant, what happens to the gross profit margin percentage?

High inflation in a company's export market relative to its domestic market generally implies:

Which competitive force involves the 'threat of substitute products'?

When using a 'market growth and market share' approach, the forecast for company revenue is:

When analyzing an industry with economies of scale, what is the expected relationship between sales and operating margins?

Which forecasting bias is mitigated by 'speaking only with those who are likely to have unique or significant perspectives'?

Which method is best for forecasting a bank's revenue?

If a company determines its 'Cash Taxes' were 15 million and 'Pre-tax Income' was 60 million, the Cash Tax Rate is:

Dividends are typically modeled based on:

What does a 'time-series' forecast rely on?

Which of the following is NOT one of Porter's Five Forces mentioned in the text?

In the context of balance sheet modeling, 'maintenance capital expenditures' are:

Why might a company in a deflationary environment lower prices 'too soon'?