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Operational Modeling final answers.FMVA 2023 questions with solutions
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Operational Modeling final answersWhat are financial modeling guidelines and why are they relevant? - answerA set of
principles and guidance for financial modeling which promote consistency across
models used by all stakeholders.
What does the observed level of operational efficiency indicate? - answerThe company
should consider additional capital expenditure to increase the capacity of the plant.
Is the pricing forecast realistic? - answerNo. The degree of pricing power is not realistic
as increased competition has entered the market.
The only variable cost for your client's business is materials. Calculate the average
sales volume over the three-year historical period provided. - answer2.5 million units.
For 2022, your client is expecting a sales volume of 4.5 million units and an inflation rate
of 4.0%. Calculate the total variable costs in US dollars for 2022. - answer$29.0 million.
In terms of gross-profit, which of the following periods likely requires further
investigation or analysis? - answerFiscal 2016: Margins appear to be lower than
expected.
Consider EBITDA as a percentage of Revenue. What is a possible reason for the
observed EBITDA-margin in fiscal 2015? - answerAn increase in sales commissions to
boost sales volumes.
What is the cost of goods sold primarily driven by for a given period? - answerSales
volume.
Why would an increase in the company's days in A/P produce cash for a business? -
answerThe company is 'stretching its payables' and deferring a cash outflow.
Why would an increase in a businesses' days in inventory consume cash? - answerThe
business is expending cash to build up its inventory levels.
What is the Q2 2022 quarterly revenue amount implied by the accounts receivable
balance and days in A/R? - answer$26.8 million.
What is the Q3 2021 quarterly COGS amount implied by the inventory? - answer$12.1
million.
A real-estate holdings company has the following fixed asset detail:Buildings: $25.0
Million; Useful Life 20-years.Land: $5.0 Million.Assuming straight-line depreciation, what
would the company's total annual depreciation expense be? - answer$1.25 million.
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