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Operational Modeling final answers Questions with solutions 2024
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Operational Modeling final answers
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Operational Modeling final answersWhat are financial modeling guidelines and why are they relevant? - answer A 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? - answer The
company should consider additional capital expenditure to increase the capacity of the
plant.
Is the pricing forecast realistic? - answer No. 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. - answer 2.5 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? - answer Fiscal 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? - answer An increase in sales commissions
to boost sales volumes.
What is the cost of goods sold primarily driven by for a given period? - answer Sales
volume.
Why would an increase in the company's days in A/P produce cash for a business? -
answer The company is 'stretching its payables' and deferring a cash outflow.
Why would an increase in a businesses' days in inventory consume cash? - answer
The 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.
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