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BREAKING INTO WALL STREET EXAM STUDY GUIDE QUESTIONS AND ANSWERS $11.49
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BREAKING INTO WALL STREET EXAM STUDY GUIDE QUESTIONS AND ANSWERS
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BREAKING INTO WALL STREET EXAM STUDY GUIDE QUESTIONS AND ANSWERS company value - Cash Flow / (Discount Rate - Cash Flow Growth Rate) why do we need the 3 financial statements - estimate cash flow so you can estimate the value of the company order of line items of income statement - revenue - C...

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  • December 5, 2024
  • 7
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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  • breaking into wall street exam study guide questio

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  • Wall Street
  • Wall Street

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BREAKING INTO WALL STREET EXAM STUDY
GUIDE QUESTIONS AND ANSWERS


company value - ✔✔Cash Flow / (Discount Rate - Cash Flow Growth Rate)


why do we need the 3 financial statements - ✔✔estimate cash flow so you can estimate the value of the

company


order of line items of income statement - ✔✔revenue - COGS = Gross Profit - Operating Expenses =

Operating Income +/- Other Income/Expense = Pretax Income - taxes = net income


income statement - ✔✔tracks revenues and expenses over a specific period; shows the things that impact

taxes


Free Cash Flow - ✔✔cash flow from operations - CapEx


net working capital - ✔✔current assets (excluding cash and investments) - current liabilities (excluding

debt)


change in net working capital - ✔✔old net working capital - new net working capital


positive change in net working capital - ✔✔frees up cash


negative change in net working capital - ✔✔uses cash


EBIT - ✔✔earnings before interest and tax; operating income


EBITDA - ✔✔Earnings before interest, taxes, depreciation, and amortization; operating income + D&A


NOPAT - ✔✔net operating profit after taxes; operating income*(1- tax rate)




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Crafted for Academic Insight by KatelynWhitman. All rights reserved © 2025

, Is EBIT unlevered or levered - ✔✔unlevered


is EBITDA unlevered or levered - ✔✔unlevered


is NOPAT unlevered or levered - ✔✔unlevered


What does DCF stand for? - ✔✔Discounted Cash Flow Analysis


what kind of valuation is DCF - ✔✔intrinsic


what is intrinsic valuation - ✔✔valuing a company based on its cash flows


what is relative valuation - ✔✔looking at comparable companies that are similar to the company you are

valuing based on size, growth, industry, etc and determine if the company you're valuing should be at a

premium or not based on the valuation multiples of the comparable companies


what are examples of intrinsic valuation - ✔✔DCF, Leveraged buy out model, precedent transaction


valuation multiple - ✔✔


what is a DCF - ✔✔an intrinsic valuation method that can be broken down into 3 parts: historical and

projection period, WACC, and terminal model




first we use historical financial data and we project that data forward to find future cash flows for the

next 5 years




then we calculate WACC which is the weighted average cost of capital to represent the opportunity cost

of investing in the company


the WACC formula is WACC = (%debt)(cost of debt)(1-tax rate) + (%equity)(cost of equity)




Page 2/7
Crafted for Academic Insight by KatelynWhitman. All rights reserved © 2025

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