Core Contents for upcoming Mid-term Examinations

 Financial Statement Analysis through Balance Sheet, Profit and Loss Account, Cashflow
Statements,
 Common-size and Comparative Statements.
 Liquidity, Leverage (Operating and Financial) and Profitability Analysis,
 Financial Ratios as Predictor of Failure,
 DuPont Analysis (Evaluation of a Firm’s Earning Power)
 Analyzing Historical and Forecasting Future Performance
 Business Valuation: Basic Approaches,
 Features, Assumptions, Advantages and Disadvantages of different approaches
 Concept of Value, Techniques of Valuation
 Dividend Discount Model (No Growth, Constant Growth, Multi-Stage Growth Models): Steps,
Assumptions, Applications,
 Valuation Multiples

Some Practice Questions:

Q1: What would you comment about a company whose beta is -5.

Q2: What would you comment about a company whose beta is 0.

Q3: What do you understand by DuPont Analysis.

Q4: How would you interpret the value of Operating Leverage: 0.80

Q5 How would you interpret Debt-Equity Ratio: 4

Q6 Explain Financial Leverage

Q7 What is a Common-size balance sheet

Q8 Which indicators can be assessed through a Comparative Cash Flow Statement?

Q9 When we are estimating the beta of stock through regression method. What does the value
of Adjusted R-Squared suggest?

Q10 What do you understand by Holding Period Return? How will you calculate this for a stock?

Q11 Interpret the operational efficiency of following brands from their Asset Turnover ratio:
GLA univ: 7.5 Amity: 5

Q12 Write the Formula for constant growth Dividend Discount Model

Q13 Undertaker Ltd. Paid a dividend of $10 per share. Growth rate for 2 years is 20% after that
7%. Market capitalization rate is 10% Find Intrinsic value.

Q14 Estimate total assets, and debt-equity ratio from below dataset:

MS Dhoni Ltd. Kohli Ltd.

Sales 15 L 25 L
Net Profit 5L 8L
Asset Turnover 1.5 1.2
ROE 50% 45%
Capital 10 L 10 L