Challenging Content Questions:

1. is it possible to get video downloads, especially for the excel courses? [Unfortunately, CFI
does not allow video downloads at this time.]

2. I don't get your workout for capital employed. Why not total asset minus current liabilities?
Will there be any effect if I work with this formula? [The definition of capital employed is the
capital invested in the business. So, the calculation should be debt plus equity. It should only
include interest-bearing liabilities (debt), not current or all liabilities.]

3. From the correction of net asset you did, the formula now looks like net asset is the same as
equity (total assets - total liabilities). There was a correction in the formula for finding the Net
Asset ratio. Shade lighter on that correction. [Yes, they are synonyms.]

4. Can you please explain the Regression Analysis and how we go about performing the
analysis (under Math for Corporate Finance). [A regression analysis is a statistical measure
that fits the ‘best’ line through a series of data points. You can use the SLOPE function in
Excel to calculate slope of the line (the slope of the line is the same thing as Beta, which we
discuss in our valuation courses). Alternatively, you can use the Analysis ToolPak Excel Add-
in. Go to File -> Options -> Add-ins and enable the Analysis ToolPak.]

5. A detailed explanation on how the lease liability and the use of asset was ascertained [This is
covered in the Accounting Principles course. Basically, a company calculates the present
value of its future lease obligations, which is a liability on the balance sheet. For the balance
sheet to balance, the company sets up a right-of-use asset for the same amount.]

6. Difference between XNPV and NPV. A detailed explanation about the XNPV method of
discounting cash flows please. It's a bit confusing. [XNPV is more dynamic since it considers
dates on which cash flows are generated. Because of this, XNPV can perform the correct
calculation if the cash flows are unevenly spaced. NPV assumes all cash flows are 1 year
apart. We cover XNPV in more detail in our Business Valuation Modeling course.]

7. I am working on Excel Fundamentals, and I also got a bit of training on Google Sheets. Can
Google sheets work the same as Excel? [Excel has much more functionality than Google
Sheets, especially for power users like a financial analyst. Excel also has more keyboard
shortcuts. Google sheets might have a slight advantage when sharing documents, but this
can also be done in Excel.]

8. Upon completion of this program, can FMVA certification be used to further my Master’s
program? [No not directly as it is unlikely that your University will accept the FMVA as a
substitute for its Master’s requirements. However, the knowledge gained in the FMVA may
help you in certain accounting and/or finance courses.]

9. Please can you demonstrate a concrete example to calculate FCFE using FCFF from the
previous complete valuation excel file? Please review the file that we have included. Also,
please note that Free Cash Flow to Equity (FCFE) is sometimes called Levered Free Cash Flow
 (LFCF). Also, Free Cash Flow to Firm (FCFF) is sometimes called Unlevered Free Cash Flow
(UFCF). The file we have provided shows how a valuation between UFCF and LFCF are equal.]

10. Analysts receive the same information from Capital IQ for companies like Amazon. Why do
their estimates differ so much for future estimates? Is there external information used?
[Each analyst may have differing opinions and forecasts which lead to different estimates.]

11. Besides Capital IQ. What other platform do Analysts use? [Mostly Bloomberg and FactSet.]

12. When calculating capital structure impact ratio, why did you use income before tax /
operating income as opposed to debt/equity or assets/equity? [We walk through the algebra
for this in the Financial Analysis course.]

13. What is the difference between financial Internal Rate of Return (IRR), Financial NPV and
Economic IRR and ENPV? [Economic IRR and ENPV are used to evaluate the economy
whereas Financial IRR and Financial NPV are the traditional measures we teach and that are
used to evaluate an investment.]

14. Please how do I resolve #NUM and #VALUE errors I see in my XNPV, IRR calculations after
adding the offset formula on the Advance Excel Formulas course? [It is hard for us to
diagnose and solve without seeing the file with the errors. We recommend you compare
your formulas to make sure they exactly match the correct formulas in our solutions file.
For the XNPV, it’s possible the dates may be incorrectly formatted (make sure they are
formatted as dates and not text.]

15. To what extent is the FMVA Certificate credible since it has an open book exam? Is it wise to
add it as a professional certificate in my resume? [The Financial Modeling & Valuation
Analyst FMVA® certification can help you learn financial modeling skills, streamline a
budgeting and forecasting process, or improve competency levels across the entire
accounting and finance spectrum. The FMVA® certification provides all the skills, tools, and
techniques required to become a world-class financial professional. This should give you the
background and confidence to land a professional finance job at many organizations across
the world. Despite it being ‘open book’, the amount of knowledge and effort it takes to
acquire the certification would be looked on positively by employers. Many people add the
FMVA® to their resume and we would also recommend this.]

16. In DCF & sensitivity model, where did we get the forecast period hard coded assumption
value? Also, where did you get the interpretation of share price and IRR value? [We’re not
entirely sure which course you are specifically referring to. However, the interpretation of
share price and IRR is as follows: 1) if the calculated share price is higher than the company’s
current share price, then it would make sense to buy shares since they appear mispriced; 2)
if the IRR is higher than the cost of capital, this usually means you should invest in the
company or project.]
17. How do you calculate depreciation of new additions if you have asset salvage value (% of
capital additions) and asset useful value (new additions). [It would be no different than
calculating any depreciation: (cost minus salvage value) / useful life.]

18. On scenario analysis, is there a method to obtain base level assumptions if I have
corresponding assumptions for low and upside cases? [No, there’s no specific method. It’s
really up to you as an analyst!]

19. How do we determine the allowable and non-allowable tax deductions when reconciling the
tax returns noting that tax laws differ with jurisdiction? [Accurately calculating taxes is highly
specialized and really requires a tax specialist. As a financial analyst you will not be required
to do this.]

20. I can't add Macabacus to my Excel despite following all the instructions. [You might have to
make sure it is enabled as an Add-in. Go to Excel Options (shortcut Alt F T), then go down to
Add-ins. Select Excel Add-ins at the bottom and press Go. Make sure Macabacus is checked.
Then select COM Add-ins and make sure Macabacus is also checked there. If that doesn’t
work, then you might need to contact your IT administrator if you are using a work
computer.]

21. Hello. How does one login to the S&P Capital IQ? How do I login to the S&P Capital IQ? I could
not practice on Business Valuation Modeling Part II course and I feel so lost watching the
lessons. [Unfortunately, we do not provide access to Capital IQ. If you prefer, you may skip
over the Capital IQ lessons in Business Valuation Modeling II as these are not tested.]

22. I'd like to be very proficient in Excel please advise on how I can reach there. [Practice,
practice and more practice!]

23. How do you perform modeling for a project that has no track record? Also how do you value
said project? [Modeling a start-up is probably the most difficult task an analyst can do. You
could look at similar companies and value the start-up using an industry multiple.
Alternatively, you can perform a top-down analysis by starting with the total addressable
market (TAM) and estimating the company’s future market share. From there, you can build
out an income statement and estimate how much investment it will take to capture that
market share. This should get you started on the DCF.]

24. In the building of the 3-Statement Model where did you derive the assumptions that we
pasted on our model? [These are just estimates built into our model. As an analyst, you
would be required to have your own estimates based on your knowledge of the company
and industry. Or alternatively, another more senior member of your team may be able to
help you with the estimates.]

25. Please, I need help with the calculations on The initial recognition of balance sheet amount.
[Please review the Vadero solution file (we are assuming you are referring to this exercise).]
26. In the case of a retail store where the business pays rent on a monthly basis, is the store
considered an asset under PP&E. [Since it is a lease, it would be considered a right-of-use
asset.]

27. In the calculation of price of bonds, the par value of a bond is $100, is this an assumption or
it's the industry standard? Must the price be in USD? [A par value of 100 is an industry
standard and, no, it does not need to be priced in USD.]

28. The CFI certification, is it a professional certificate from a chartered institute or a

qualification for one to be certified as a degree holder? [The FMVA® is a certification, but it
does not certify you as a degree holder. Only a degree from a University can do that.]

29. So, I understand some formulas but not all. Do I have to memorize each formula in order to
succeed at this program? [No, you do not need to memorize every formula to succeed in this
program. You just need to demonstrate enough knowledge of the curriculum to pass the
assessments and the final FMVA® exam.]

30. Are we going to be provided with formulas during the final exam? [No. However, the exam is
‘open book.’]

31. In the balance sheet when liability supersedes asset how will you describe that analogy? [You
would have negative equity to balance the balance sheet.]

32. When an asset is leased, who between the lessor and the lessee has the full ownership of
the property? [The lessor maintains ownership.]

33. Does CFI provide accounting software knowledge like QuickBooks, Sage or Pastel. I have
really enjoyed Excel courses. [Unfortunately, we do not at this time.]

34. Kindly explain how to treat Yield to maturity and the coupons received for a semi annual
bond when calculating it's price [It’s the same math as for an annual pay bond, you just have
to divide the coupon in half, and also adjust for the fact that the coupons will be 6 months
apart instead of a year. In the ‘Math for Finance’ prep course, we have Excel examples of an
annual pay bond as well as a semi-annual pay bond.]