Your Answers Print ReportCorrect Q.1) What is another term used to describe the Income Statement? A. B. C. D.

Balance Sheet Profit or Loss Statement (Your Answer) Cash Flow Statement Capitalization Table

Correct Q.2) What is Revenue? A. B. C. D. The The The The cash cash cash cash that the promoters invested in the company that was borrowed from the bank to start the business customers pay to buy the company s products (Your Answer) the company pays to its suppliers

Correct Q.3) How is Operating Income calculated? A. Revenue B. Revenue C. Revenue D. Revenue Answer) Cost of Goods Sold = Operating Income Gross Margin = Operating Income Operating Expenses = Operating Income Cost of Goods Sold - Operating Expenses = Operating Income (Your

Correct Q.4) Which of the following industries has the highest Gross Margin? A. B. C. D. Retail Software Technology / IT (Your Answer) Manufacturing Restaurants

Correct Q.5) What kind of an expense is Marketing Expense? A. B. C. D. Operating Expense (Your Answer) Cost of Goods Sold Tax Expense Interest Expense

Correct Q.6) What is an Income Statement used for? A. B. C. D. To To To To find out the company s cash balance find out all the assets a company owns find out how much money the company has borrowed determine the company s profitability (Your Answer)

Correct Q.7) Which is the easiest way to find a company s Income Statement A. B. C. D. Google.com Call Dezyre.com Investor Relations section of a company s website (Your Answer) Call the company

Correct Q.8) Which of the following is a Cost of Goods Sold (COGS) for Dominos Pizza?

A. B. C. D.

Restaurant rent Pizza Ingredients Cheese, Vegetables etc (Your Answer) Employee Salaries Cost of buying baking ovens and other equipment

Correct Q.9) Which of the following is an Operating Expense (COGS) for Dominos Pizza? A. Tax B. Pizza Ingredients Cheese, Vegetables etc C. Employee Salaries (Your Answer) Correct Q.10) What is Dominos Pizza annual Revenue growth rate % ? A. B. C. D. 2% 35% (Your Answer) 100% 175%

Correct Q.11) Accrual accounting is used because? A. It s the best representation of the operations of a company (Your Answer) B. It s easier to use C. It s the most popular accounting method Correct Q.12) Which industry has a higher Cost of Goods Sold? A. Technology B. Restaurants (Your Answer) Correct Q.13) If Rs. 10,000 is received this month by a company to deliver a product ne xt month. What is the company s revenue this month? A. B. C. D. Rs.10,000 Rs.5,000 Rs. 0 Depends on how much work on the product was done this month (Your Answer)

Correct Q.14) Which Income Statement item is directly affected if a company borrows mon ey? A. B. C. D. Revenue Marketing Expense Interest Expense (Your Answer) Tax

Correct Q.15) Which of the following is too much to pay as salaries in a company? A. 5% of Revenue B. 25% of Revenue C. 40% of Revenue

D. 90% of Revenue (Your Answer) Correct Q.16) If a company reports a loss this year, how much Income Tax will the compa ny pay? A. B. C. D. 0% (Your Answer) 5% 15% 33%

Correct Q.17) Profitability of a Restaurant Company improves as it grows in size, chief ly because? A. It can charge more for its products B. It can borrow more money C. Economies of Scale (Your Answer) Correct Q.18) Why does a Company need a Balance Sheet? A. To keep track of Profit and Loses B. To keep track of where cash is being spend C. To keep track of what the company owns and owes others (Your Answer) Correct Q.19) The raw materials and ingredients used by Dominos to make Pizzas are? A. Assets (Your Answer) B. Liabilities C. Shareholders Equity Correct Q.20) A Loan taken by a company is a Liability because? A. The loan is used to expand the company s operations B. The company has to pay back that amount in the future (Your Answer) C. The company has already received the cash Correct Q.21) If a Company has to pay off a loan this month, is that a ? A. Current Liability (Your Answer) B. Non-Current Liability Correct Q.22) The main reason for the 2008 financial crisis was? A. Profits of company s reduced B. Stock Markets crashed C. Company s had too much debt (Your Answer) Correct Q.23) What is a Secured Loan? A. A loan that is backed up using some assets of the company to prevent defau lt (Your Answer) B. A special type of loan for a company s security operations C. A loan that the company has to pay back immediately

Correct Q.24) Money that the company is storing for anticipated future uses is called? A. Cash B. Reserves (Your Answer) C. Shareholders Equity Correct Q.25) When a restaurant company s revenue is growing significantly, which of the following will also definitely happen? A. Loans will increase B. Gross Block will increase (Your Answer) C. Reserves will decrease Correct Q.26) In a Balance Sheet, if cash increases by Rs.1 Lakh, which other line item will also increase? A. Current Liabilities B. Non-Current Liabilities C. Shareholders Equity (Your Answer) Incorrect Q.27) In a Balance Sheet, if Loans increases by Rs.5 Lakh, which other line ite m will also increase? A. Cash (Correct Answer) B. Inventory (Your Answer) C. Paid-Up Capital Correct Q.28) Working Capital is used to? A. Fund a company s expansion plans B. Pay back loans C. Fund day to day operations of a company (Your Answer) Correct Q.29) Which line item connects the Balance Sheet to the Income Statement? A. Interest Expense B. Net Income (Your Answer) C. Taxes Correct Q.30) In a Balance Sheet, if cash increases by Rs.1 Lakh, which other line item will also increase? A. Current Liabilities (Your Answer) B. Non-Current Liabilities Correct Q.31) If the P/E ratio of a share is 15x and price per share is Rs. 200, what i s the earnings per share? A. Rs.14.25 B. Rs.15.10

C. Rs. 13.33 (Your Answer) D. Rs. 16.00 Correct Q.32) If a company dilutes 10% for Rs.50 lakhs, what is the pre-money valuation of the company? A. B. C. D. Rs.5 Crores Rs.4 Crores Rs.4.5 Crores (Your Answer) Rs.5.5 Crores

Correct Q.33) If a company dilutes 10% for Rs.50 lakhs, what is the post-money valuatio n of the company? A. B. C. D. Rs.5 Crores (Your Answer) Rs. 4 Crores Rs.4.5 Crores Rs.5.5 Crores

Correct Q.34) Assume a Venture Capitalist invests Rs.10 crores in a company and has a 1 x liquidation preference and 20% equity. If the company is sold for Rs.20 crores , how much does the Venture Capitalist make? A. B. C. D. Rs.10 Rs.20 Rs.18 Rs.12 Crores Crores Crores Crores (Your Answer)

Correct Q.35) What is the typical dilution a company takes during an IPO offering ? A. B. C. D. 0-5% 10-15% (Your Answer) 30-40% 60-70%

Correct Q.36) Assume you are an Investment Banker advising a technology start-up to rai se Rs.10 Crores from investors. How would you recommend that they raise the mone y A. Debt or Loan from bank B. Equity Shares (Your Answer) Correct Q.37) What is the highest rating possible for debt A. B. C. D. AAAA+ AAA (Your Answer) AA+ A+

Correct Q.38) What is the yield of a bond with a Rs.1,000 face value and 10% interest? A. 11%

B. Rs.1,100 C. 10% (Your Answer) D. Rs.990 Correct Q.39) Which of these sectors is best suited to be valued using Discounted Cash Flow Analysis ? A. Steel Industry (Your Answer) B. Technology Industry Correct Q.40) If a company has 10 lakh shares outstanding and price per share is Rs.550 , what is the market value of the company ? A. B. C. D. Rs.56 Crores Rs.15 lakhs Rs.5.5 Crores Rs.55 Crores (Your Answer)

Correct Q.41) Typically a early stage startup that is raising Rs.50 lakhs from angel in vestors will dilute how much equity ? A. B. C. D. 10-15% (Your Answer) 25-35% 40-55% 55-65%

Correct Q.42) In an IPO, a company raises money mostly from A. B. C. D. The Public (Your Answer) Venture Capital Funds Private Equity Funds Pension Funds

Correct Q.43) If a new company has Rs.5 lakh loss in 2010 and Rs.11 lakh loss in 2011, how much income tax will it pay on a profit of Rs.2 lakhs in 2012 ? A. B. C. D. Rs.60,000 Rs.59,850 Rs.61,243 Rs.0 (Your Answer)

Correct Q.44) Which is the most important metric to consider while buying shares in a c ompany? A. B. C. D. Revenue growth rate Profitability P/E ratio (Your Answer) Number of Customers

Correct Q.45) Assume you own 35% of the shares in your start-up. If your start-up is so ld for Rs.300 crores how much money will you make ? A. 35% of Rs.300 crores

B. Depends on the companys current year profits C. Depends on the liquidation preference clause (Your Answer) D. Depends on the board of directors voting Correct Q.46) If your company buys 20 laptops this year for employee use at a cost of R s. 20 lakhs, then your company s A. B. C. D. Technology expense increases by Rs.20 lakhs Infrastructure expense increases by Rs.20 lakhs Capital Expenditure increases by Rs.20 lakhs (Your Answer) Employee expense increases by Rs.20 lakhs

Correct Q.47) The Working Capital of a company indicates A. B. C. D. Marketing Expenses Day to Day operating expenses (Your Answer) Tax Expenses Interest Expenses

Correct Q.48) Free Cash Flow of a company is A. Revenue B. Revenue Operating Expenses C. Revenue Operating Expenses - Taxes D. Revenue Operating Expenses Taxes + Depreciation Capital (Your Answer) Incorrect Q.49) The DCF Valuation method is used to arrive at the A. B. C. D. Enterprise Value (Your Answer) Equity Value (Correct Answer) Enterprise Value Net Debt Free Cash Flow

Capex + Change in working

Correct Q.50) If you hired a Vice President Marketing for your startup and gave him/her shares in your company. The rate of return of his/her shares upon exit will dep end on A. Number of other employees to whom shares were granted B. Pre-money valuation of the company when shares were granted (Your Answer) C. Number of Outstanding shares in the company D. Number of years the Vice President has been working for your company Correct Q.51) What is Synergy in a Merger or Acquisition between 2 companies

A. The working relationship between the senior management of the 2 companies B. The cost savings achievable when the 2 companies are joined together (Your Answer) C. The new customers that the combined company will get D. The price per share paid for the acquisition Correct

Q.52) Why do companies do an IPO A. B. C. D. To To To To

Initial Public Offering?

raise money from public investors (Your Answer) confirm with government regulations confirm with tax laws confirm with investor agreements

Correct Q.53) If you are performing a comparable trading valuation on Google, which of the following is the most comparable company to Google A. B. C. D. Airtel Yahoo (Your Answer) Cisco HP

Correct Q.54) When raising money from Venture Capital investors, they like to see finan cial projections for how many years A. B. C. D. 1-3 3-5 5-7 7-8 years years (Your Answer) years years

Correct Q.55) What is the Capitalization Structure of a company A. B. C. D. How much capital the company has raised Who owns how many shares in the company (Your Answer) Total capital in the company s bank account Capital Expenses of the company

Correct Q.56) If an Investor invests Rs.50 lakhs in your company and this becomes Rs.1 crore in 4 years. What is the rate of return for the investor? A. B. C. D. 20% 22% 21% 25% (Your Answer)

Correct Q.57) Why is market value of a company generally higher than book value of the company? A. B. C. D. Market is inefficient at valuing a company Because the book value is done by a qualifies Chartered Accountant Intangible assets like R&D, Proprietary methods, Team etc (Your Answer) Government of India regulations

Correct Q.58) The department in a Bank responsible for providing unbiased financial ana lysis reports on companies is A. B. C. D. Investment Banking Equity Research (Your Answer) Sales and Trading IT

Correct Q.59) Which of these companies is an Investment Bank? A. B. C. D. Goldman Sachs (Your Answer) Reliance Mutual Fund Kotak Mahindra Bank ING Vysya

Incorrect Q.60) If Revenue = Rs. 10 lakhs, Operating Expense = Rs. 6 lakhs, Capital Expen diture = Rs. 2 lakhs with no depreciation in Year 1. What is the operating profi t ? A. B. C. D. Rs.14 lakhs (Correct Answer) Rs.12 lakhs (Your Answer) Rs.12.4 lakhs Ra. 13 lakhs