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C-FAT
Basic Accounting Valuations Private Equity Credit Research
Question Number : 1
On a classified balance sheet the appropriate ordering of specific classification
s is?
Current assets; long-term investments; property plant and equipment; intangible a
ssets; other assets
Current assets; property plant and equipment; long-term investments; intangible a
ssets; other assets
Current assets; intangible assets; property plant and equipment; long-term invest
ments; other assets
Current assets; other assets; long-term investments; intangible assets; propert
y plant and equipment
Question Number : 2
Current assets are those assets which management intends to convert into cash or
consume within?
The operating cycle
One year
The longer of (a) or (b)
The shorter of (a) or (b)
Question Number : 3
How is an asset that is not fully depreciated is sold of mid-year recorded?
When the asset is disposed of it would be written off
A gain would be recognized because the depreciation would be less than the asse
t
Depreciation would be calculated up until the point of the disposal
A full year of depreciation would be taken against the asset at the time of dis
posal
Question Number : 4
Dividends omitted on preferred shares that must be paid before common shareholde
rs are entitled to be paid are referred to as:
Participating
Callable
Cumulative
In arrears
Question Number : 5
On a statement of cash flows which of the following types of activities would not
be disclosed in a separate section
Operating activities
Investing activities
Financing activities
Contractual activities
Question Number : 6
GenX had the following changes in their balance sheet accounts
$29
-$29
$85
$56
Question Number : 7
Specify whether the following statement about discounted cash flow valuation is
true or false assuming that all variables are constant except for the variable di
scussed below:
As the uncertainty about the expected cash flows increases the value of an asset
increases.
TRUE
FALSE
Question Number : 8
In a discounted cash flow excercise what is the discount factor (to 3 decimal pla
ces) for year 4 when the cost of capital is 11.5%
0.115
3.587
0.647
0.721
Question Number : 9
In applying the constant-growth dividend discount model lowering the required rat
e of return on the stock rate will cause a stock's intrinsic value to:
decrease.
increase.
decrease or increase depending upon other factors.
Question Number : 10
What would Jackie pay for a stock that is expected to pay a $1.50 dividend in on
e year if the expected dividend growth rate is 3% and she requires a 16% return
on her investment?
Jackie would pay $13.14
Jackie would pay $12.43
Jackie would pay $11.54
Jackie would pay $14.30
Question Number : 11
Which of the following multiple is suitable for valuation of sugar industry?
P/BV
P/CF
P/tons of sugar crushed
Dividend Yield
Question Number : 12
Which multiple is most suitable for valuing a Bank?
P/BV
EV/EBITDA
P/Sales
P/E
Question Number : 13
Which of these is not a benefit of preferred stock?
Usually preferred stock has certain rights that common stock does not have such a
s a specified dividend
senior priority in receiving proceeds from a sale or liquidation of the company
.
Provides downside protection due to its negotiated rights and allows investors
to profit from share appreciation through conversion.
Typically convertible preferred stock automatically converts to common stock if
the company makes an initial public offering (IPO)
None of these
Question Number : 14
Which one of the following gives an investor an exit vehicle should an IPO or sa
le of the company not materialize
Convertible debt
Mezzanine debt
Warrents
Redeemable preferred stock
Question Number : 15
Tag-along rights prevents the interests of
Minority Shareholders
Majority Shareholders
Question Number : 16
Why is EBITDA a useful measure of earnings?
it determines the exact amount of cash-flow
it eliminates the effect of both financial structuring and accounting policy an
d decisions
It's a GAAP accepted measure of accounting
None of the above
Question Number : 17
The lenders use ______________ ratio to assess debt servicing capacity of a firm
.
Interest Coverage ratio
Debt-Asset Ratio
Acid-test Ratio
Current Ratio
Question Number : 18
(Long term debt)/( capital) indicates what of a company
Profitability
Financial Strength
Financial Policy
Accounting Quality
Question Number : 19
Credit Rating is an advise to buy the rated security
TRUE
FALSE
Question Number : 20
In the event of a default what fraction of the exposure may be recovered through
bankruptcy proceedings or some other form of settlement? What describes this ter
m best?
Default Probability
Credit exposure
Recovery Rate
Corporate Bridge 2012
logo Time Available:
C-FAT
Basic Accounting Valuations Private Equity Credit Research
Question Number : 1
On a classified balance sheet the appropriate ordering of specific classification
s is?
Current assets; long-term investments; property plant and equipment; intangible a
ssets; other assets
Current assets; property plant and equipment; long-term investments; intangible a
ssets; other assets
Current assets; intangible assets; property plant and equipment; long-term invest
ments; other assets
Current assets; other assets; long-term investments; intangible assets; propert
y plant and equipment
Question Number : 2
Current assets are those assets which management intends to convert into cash or
consume within?
The operating cycle
One year
The longer of (a) or (b)
The shorter of (a) or (b)
Question Number : 3
How is an asset that is not fully depreciated is sold of mid-year recorded?
When the asset is disposed of it would be written off
A gain would be recognized because the depreciation would be less than the asse
t
Depreciation would be calculated up until the point of the disposal
A full year of depreciation would be taken against the asset at the time of dis
posal
Question Number : 4
Dividends omitted on preferred shares that must be paid before common shareholde
rs are entitled to be paid are referred to as:
Participating
Callable
Cumulative
In arrears
Question Number : 5
On a statement of cash flows which of the following types of activities would not
be disclosed in a separate section
Operating activities
Investing activities
Financing activities
Contractual activities
Question Number : 6
GenX had the following changes in their balance sheet accounts
$29
-$29
$85
$56
Question Number : 7
Specify whether the following statement about discounted cash flow valuation is
true or false assuming that all variables are constant except for the variable di
scussed below:
As the uncertainty about the expected cash flows increases the value of an asset
increases.
TRUE
FALSE
Question Number : 8
In a discounted cash flow excercise what is the discount factor (to 3 decimal pla
ces) for year 4 when the cost of capital is 11.5%
0.115
3.587
0.647
0.721
Question Number : 9
In applying the constant-growth dividend discount model lowering the required rat
e of return on the stock rate will cause a stock's intrinsic value to:
decrease.
increase.
decrease or increase depending upon other factors.
Question Number : 10
What would Jackie pay for a stock that is expected to pay a $1.50 dividend in on
e year if the expected dividend growth rate is 3% and she requires a 16% return
on her investment?
Jackie would pay $13.14
Jackie would pay $12.43
Jackie would pay $11.54
Jackie would pay $14.30
Question Number : 11
Which of the following multiple is suitable for valuation of sugar industry?
P/BV
P/CF
P/tons of sugar crushed
Dividend Yield
Question Number : 12
Which multiple is most suitable for valuing a Bank?
P/BV
EV/EBITDA
P/Sales
P/E
Question Number : 13
Which of these is not a benefit of preferred stock?
Usually preferred stock has certain rights that common stock does not have such a
s a specified dividend
senior priority in receiving proceeds from a sale or liquidation of the company
.
Provides downside protection due to its negotiated rights and allows investors
to profit from share appreciation through conversion.
Typically convertible preferred stock automatically converts to common stock if
the company makes an initial public offering (IPO)
None of these
Question Number : 14
Which one of the following gives an investor an exit vehicle should an IPO or sa
le of the company not materialize
Convertible debt
Mezzanine debt
Warrents
Redeemable preferred stock
Question Number : 15
Tag-along rights prevents the interests of
Minority Shareholders
Majority Shareholders
Question Number : 16
Why is EBITDA a useful measure of earnings?
it determines the exact amount of cash-flow
it eliminates the effect of both financial structuring and accounting policy an
d decisions
It's a GAAP accepted measure of accounting
None of the above
Question Number : 17
The lenders use ______________ ratio to assess debt servicing capacity of a firm
.
Interest Coverage ratio
Debt-Asset Ratio
Acid-test Ratio
Current Ratio
Question Number : 18
(Long term debt)/( capital) indicates what of a company
Profitability
Financial Strength
Financial Policy
Accounting Quality
Question Number : 19
Credit Rating is an advise to buy the rated security
TRUE
FALSE
Question Number : 20
In the event of a default what fraction of the exposure may be recovered through
bankruptcy proceedings or some other form of settlement? What describes this ter
m best?
Default Probability
Credit exposure
Recovery Rate
Corporate Bridge 2012
logo Time Available:
C-FAT
Basic Accounting Valuations Private Equity Credit Research
Question Number : 1
On a classified balance sheet the appropriate ordering of specific classification
s is?
Current assets; long-term investments; property plant and equipment; intangible a
ssets; other assets
Current assets; property plant and equipment; long-term investments; intangible a
ssets; other assets
Current assets; intangible assets; property plant and equipment; long-term invest
ments; other assets
Current assets; other assets; long-term investments; intangible assets; propert
y plant and equipment
Question Number : 2
Current assets are those assets which management intends to convert into cash or
consume within?
The operating cycle
One year
The longer of (a) or (b)
The shorter of (a) or (b)
Question Number : 3
How is an asset that is not fully depreciated is sold of mid-year recorded?
When the asset is disposed of it would be written off
A gain would be recognized because the depreciation would be less than the asse
t
Depreciation would be calculated up until the point of the disposal
A full year of depreciation would be taken against the asset at the time of dis
posal
Question Number : 4
Dividends omitted on preferred shares that must be paid before common shareholde
rs are entitled to be paid are referred to as:
Participating
Callable
Cumulative
In arrears
Question Number : 5
On a statement of cash flows which of the following types of activities would not
be disclosed in a separate section
Operating activities
Investing activities
Financing activities
Contractual activities
Question Number : 6
GenX had the following changes in their balance sheet accounts
$29
-$29
$85
$56
Question Number : 7
Specify whether the following statement about discounted cash flow valuation is
true or false assuming that all variables are constant except for the variable di
scussed below:
As the uncertainty about the expected cash flows increases the value of an asset
increases.
TRUE
FALSE
Question Number : 8
In a discounted cash flow excercise what is the discount factor (to 3 decimal pla
ces) for year 4 when the cost of capital is 11.5%
0.115
3.587
0.647
0.721
Question Number : 9
In applying the constant-growth dividend discount model lowering the required rat
e of return on the stock rate will cause a stock's intrinsic value to:
decrease.
increase.
decrease or increase depending upon other factors.
Question Number : 10
What would Jackie pay for a stock that is expected to pay a $1.50 dividend in on
e year if the expected dividend growth rate is 3% and she requires a 16% return
on her investment?
Jackie would pay $13.14
Jackie would pay $12.43
Jackie would pay $11.54
Jackie would pay $14.30
Question Number : 11
Which of the following multiple is suitable for valuation of sugar industry?
P/BV
P/CF
P/tons of sugar crushed
Dividend Yield
Question Number : 12
Which multiple is most suitable for valuing a Bank?
P/BV
EV/EBITDA
P/Sales
P/E
Question Number : 13
Which of these is not a benefit of preferred stock?
Usually preferred stock has certain rights that common stock does not have such a
s a specified dividend
senior priority in receiving proceeds from a sale or liquidation of the company
.
Provides downside protection due to its negotiated rights and allows investors
to profit from share appreciation through conversion.
Typically convertible preferred stock automatically converts to common stock if
the company makes an initial public offering (IPO)
None of these
Question Number : 14
Which one of the following gives an investor an exit vehicle should an IPO or sa
le of the company not materialize
Convertible debt
Mezzanine debt
Warrents
Redeemable preferred stock
Question Number : 15
Tag-along rights prevents the interests of
Minority Shareholders
Majority Shareholders
Question Number : 16
Why is EBITDA a useful measure of earnings?
it determines the exact amount of cash-flow
it eliminates the effect of both financial structuring and accounting policy an
d decisions
It's a GAAP accepted measure of accounting
None of the above
Question Number : 17
The lenders use ______________ ratio to assess debt servicing capacity of a firm
.
Interest Coverage ratio
Debt-Asset Ratio
Acid-test Ratio
Current Ratio
Question Number : 18
(Long term debt)/( capital) indicates what of a company
Profitability
Financial Strength
Financial Policy
Accounting Quality
Question Number : 19
Credit Rating is an advise to buy the rated security
TRUE
FALSE
Question Number : 20
In the event of a default what fraction of the exposure may be recovered through
bankruptcy proceedings or some other form of settlement? What describes this ter
m best?
Default Probability
Credit exposure
Recovery Rate
Corporate Bridge 2012
logo Time Available:
C-FAT
Basic Accounting Valuations Private Equity Credit Research
Question Number : 1
On a classified balance sheet the appropriate ordering of specific classification
s is?
Current assets; long-term investments; property plant and equipment; intangible a
ssets; other assets
Current assets; property plant and equipment; long-term investments; intangible a
ssets; other assets
Current assets; intangible assets; property plant and equipment; long-term invest
ments; other assets
Current assets; other assets; long-term investments; intangible assets; propert
y plant and equipment
Question Number : 2
Current assets are those assets which management intends to convert into cash or
consume within?
The operating cycle
One year
The longer of (a) or (b)
The shorter of (a) or (b)
Question Number : 3
How is an asset that is not fully depreciated is sold of mid-year recorded?
When the asset is disposed of it would be written off
A gain would be recognized because the depreciation would be less than the asse
t
Depreciation would be calculated up until the point of the disposal
A full year of depreciation would be taken against the asset at the time of dis
posal
Question Number : 4
Dividends omitted on preferred shares that must be paid before common shareholde
rs are entitled to be paid are referred to as:
Participating
Callable
Cumulative
In arrears
Question Number : 5
On a statement of cash flows which of the following types of activities would not
be disclosed in a separate section
Operating activities
Investing activities
Financing activities
Contractual activities
Question Number : 6
GenX had the following changes in their balance sheet accounts
$29
-$29
$85
$56
Question Number : 7
Specify whether the following statement about discounted cash flow valuation is
true or false assuming that all variables are constant except for the variable di
scussed below:
As the uncertainty about the expected cash flows increases the value of an asset
increases.
TRUE
FALSE
Question Number : 8
In a discounted cash flow excercise what is the discount factor (to 3 decimal pla
ces) for year 4 when the cost of capital is 11.5%
0.115
3.587
0.647
0.721
Question Number : 9
In applying the constant-growth dividend discount model lowering the required rat
e of return on the stock rate will cause a stock's intrinsic value to:
decrease.
increase.
decrease or increase depending upon other factors.
Question Number : 10
What would Jackie pay for a stock that is expected to pay a $1.50 dividend in on
e year if the expected dividend growth rate is 3% and she requires a 16% return
on her investment?
Jackie would pay $13.14
Jackie would pay $12.43
Jackie would pay $11.54
Jackie would pay $14.30
Question Number : 11
Which of the following multiple is suitable for valuation of sugar industry?
P/BV
P/CF
P/tons of sugar crushed
Dividend Yield
Question Number : 12
Which multiple is most suitable for valuing a Bank?
P/BV
EV/EBITDA
P/Sales
P/E
Question Number : 13
Which of these is not a benefit of preferred stock?
Usually preferred stock has certain rights that common stock does not have such a
s a specified dividend
senior priority in receiving proceeds from a sale or liquidation of the company
.
Provides downside protection due to its negotiated rights and allows investors
to profit from share appreciation through conversion.
Typically convertible preferred stock automatically converts to common stock if
the company makes an initial public offering (IPO)
None of these
Question Number : 14
Which one of the following gives an investor an exit vehicle should an IPO or sa
le of the company not materialize
Convertible debt
Mezzanine debt
Warrents
Redeemable preferred stock
Question Number : 15
Tag-along rights prevents the interests of
Minority Shareholders
Majority Shareholders
Question Number : 16
Why is EBITDA a useful measure of earnings?
it determines the exact amount of cash-flow
it eliminates the effect of both financial structuring and accounting policy an
d decisions
It's a GAAP accepted measure of accounting
None of the above
Question Number : 17
The lenders use ______________ ratio to assess debt servicing capacity of a firm
.
Interest Coverage ratio
Debt-Asset Ratio
Acid-test Ratio
Current Ratio
Question Number : 18
(Long term debt)/( capital) indicates what of a company
Profitability
Financial Strength
Financial Policy
Accounting Quality
Question Number : 19
Credit Rating is an advise to buy the rated security
TRUE
FALSE
Question Number : 20
In the event of a default what fraction of the exposure may be recovered through
bankruptcy proceedings or some other form of settlement? What describes this ter
m best?
Default Probability
Credit exposure
Recovery Rate
Corporate Bridge 2012