Financial Modeling Exam Wall Street Prep Questions and Answers 2026

Financial Modeling Exam Wall Street Prep 

1. Why do you never want to re-enter the same input more than once in your model?: Bc. you want your model to be dynamic 2. Components of a financial statement model?: Income statement Balance sheet Statement of cash flows Both historical results and forecasts 3. What colour text should you use for: Hard-coded inputs Formulas Links to other worksheets Links to other files Links to data providers: Hard-coded inputs -> blue Formulas -> black Links to other worksheets -> green Links to other files -> red Links to data providers -> dark red 4. Should you hide rows?: No, grouping is better 5. Should you merge cells?: No, centering across selection is better 6. Footnotes vs comments?: Footnotes will show up when model is printed Comments for internal purposes 7. If you want to delete a worksheet and want to know if there are any links to that worksheet, how can you do this?: Ctrl + F and then search for the name of the worksheet you want to delete 8. What documents would you gather prior to starting to model?: Latest annual report and corresponding 4th quarter press release and earnings call transcript Latest equity research & EPS consensus estimates Last 6 months news run (stock splits, acquisitions and other material changes) For quarterly models and LTM calculations... -also get latest 3 quarterly reports and corresponding press releases & earnings calls 9. Why pay attention to press releases and earnings calls?: Available weeks before the relevant annual/quarterly report -- if you ignore the press release, you could be ignoring an entire quarter of availabe results Has non-GAAP disclosures May have management guidance 10. What kind of equity research reports are very helpful if you're trying to get up to speed with an industry?: initiating coverage research reports 11. How many years of historicals are typically used in investment banking models?: 3 years 12. How many years of forecasts are typically used in investment banking models? Why not make it longer? Why not make it shorter?: 5 years Longer the forecast, the more tenuous they are. The shorter the forecast, the less useful it is for valuation. 13. What do you add back to EBIT to get EBITDA?: Depreciation and ammorti- sation Stock-based compensation (if you want to) (both non-cash expenses) 14. Most investment banking models use to frame their "base case". Why?: equity research reports