Financial Modelling Question Bank:

Q1. Write Short Notes on:

Each

5 Marks

a. Du Pont Analysis
b. Liquidity Ratios
c. Operating Cycle
d. Activity Ratios
e. Coverage Ratios
f. Utility of Financial Ratio Analysis
g. Takeovers and Control Premium
h. Usage of P/E multiple in valuing a company
i. Minority Discounts.
j. Competitive strategy of Business
k. Intrinsic P/E Ratio
l. Sustainable Growth Rate.
m. Classification of Financial Ratios.
Q2. How is book value more relevant to market value while considering
financial leverage ratios?
Q3. Is liquidation value a measure of benchmark of the companys floor
value? Justify your answer.
Q4. The riskier the investment, the higher the discount rate that should be
used. Explain the statement in detail.
Q5. Explain the correlation between Cost of Capital and the Discount Rate.
Q6. How does Market determines the discount rates?
Q7. How are comparable multiples used in Valuing a Business?
Q8. What is the relevance of managing Debt Financing and the Cash
component of offers during takeover?
Q9. Does the market Value control independent of Takeovers? Justify your
answer.
Q10. Enlist the Valuation effects of Mergers and Acquisitions.
Q11. How does Shareholders wealth get affected due to payment method?
Q12. Enlist desirable financial Characteristics of the Target Firm.
Q13. What issues does Macroeconomic research try to investigate?

Q14. Which are the Market Structures based on competitiveness are

considered while carrying out Industry Analysis?
Q15. Explain the S-Curve approach of Industry Life Cycle?
Q16. In what ways is Balance Sheet Growth analysis different from Common
Size Balance-Sheet analysis?
Q17. What components of cash flow are used in Valuation Process?
Q18. What are the Qualitative factors considered while doing Equity
Valuation which fall beyond the scope of Financial Statements?
Q19. What is Cash Flow Waterfall in Project Finance Model? How is it
Structured?
Q20. Explain Value management as an Anti-takeover Defense mechanism.