Financial Forecasting
 

  1. Question: What is meant by the term "pre-money valuation"?

    A
    The valuation of a company before collecting accounts receivable

    B
    The valuation of a company after collecting all accounts receivable

    C
    The valuation of a company after an investment round

    D
    The valuation of a company before an investment round

    Note: Not available
    1. Report

  2. Question: Which of the following would be the most useful forecasting interval?

    A
    Monthly

    B
    Quarterly

    C
    Yearly

    D
    Weekly

    Note: Not available
    1. Report

  3. Question: Why is it important to create assumptions for all possible changing variables?

    A
    It's not important; there is no real value in doing so.

    B
    It makes the model overly complex and difficult to use.

    C
    It allows the user to avoid paying taxes.

    D
    It makes future updates to the model easier because the user does not need to search for numbers embedded in formulas in the financial statements.

    Note: Not available
    1. Report

  4. Question: The most logical formatting convention for assumptions would be ___________________.

    A
    to use a 10-color coding scheme

    B
    to spread assumptions throughout the entire model

    C
    to outline and use red text in all input cells, and to add a note at the top of the assumptions stating that only red-text cells are to be changed, with uniform formatting and assumptions placement

    D
    to use no particular formatting, but to make the assumptions simple with black text and no highlighting

    Note: Not available
    1. Report

  5. Question: Which of the following decisions would best be made by looking at cash flow?

    A
    Decisions about inventory management

    B
    Decisions about tax planning

    C
    The decision to spend less on capital assets and pay down payables in the next period

    D
    The decision to increase production

    Note: Not available
    1. Report

  6. Question: To be as specific as possible, a revenue forecast should ______________.

    A
    be summarized by year

    B
    be summarized by quarter

    C
    be detailed month by month

    D
    show a total for five years

    Note: Not available
    1. Report

  7. Question: Ad Revenue, which is revenue generated by placing advertisements of other companies on your site, can be modeled by _________________.

    A
    assuming a fixed amount each year and applying it to all years

    B
    assuming that Google's ad rates apply

    C
    figuring the average revenue per ad multiplied by the expected number of advertisement spots in a given period

    D
    figuring the average sales revenue on other products

    Note: Not available
    1. Report

  8. Question: The majority ownership of a private company is typically held by __________________.

    A
    private bankers

    B
    venture capital firms

    C
    employees

    D
    company officers

    Note: Not available
    1. Report

  9. Question: In general, a financial plan can be defined as _____________________.

    A
    a plan for spending, saving, and generating revenue

    B
    a 10-year strategy plan

    C
    the prior year's financial reports

    D
    a plan to be used only by the Board of Directors

    Note: Not available
    1. Report

  10. Question: Why would an investor be interested in a company's pre-money valuation?

    A
    The investor is required by law to ask for the pre-money valuation.

    B
    Knowing the valuation allows the investor to secretly calculate how much he can expect in return.

    C
    Knowing the valuation helps the investor put his investment in perspective and understand how it is relative to the capital already in the company.

    D
    Knowing the valuation gives the investor the ability to calculate net income.

    Note: Not available
    1. Report
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