Financial Modeling & Forecasting Flashcards
7 cards from real CFP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Financial Modeling & Forecasting flashcards as text
A fintech company uses a 'cohort analysis' in its financial model. What does this technique primarily reveal?
Answer: Behavioral and revenue trends of customer groups acquired in the same period
Cohort analysis tracks groups of customers acquired in the same period over time, revealing retention curves, LTV development, and payback periods by acquisition vintage.
In a fintech model, what is the primary purpose of a 'bridge' or 'waterfall' chart from EBITDA to Free Cash Flow?
Answer: To reconcile EBITDA to FCF by itemizing each cash adjustment
A bridge chart visually steps from EBITDA through taxes, capex, and working capital changes to arrive at FCF, making each adjustment transparent.
When modeling crypto exchange revenue, which fee structure component is most volatile and hardest to forecast?
Answer: Trading volume-based transaction fees
Trading volume fees are directly tied to market activity and crypto price volatility, making them the most difficult to predict compared to fixed-fee revenue.
A fintech model applies a terminal value using the Gordon Growth Model. If WACC is 12% and terminal growth rate is 4%, what is the terminal value capitalization rate?
Answer: 8%
The capitalization rate in the Gordon Growth Model equals WACC minus terminal growth rate: 12% - 4% = 8%.
In a fintech merger model, the 'accretion/dilution analysis' determines:
Answer: Whether the acquisition increases or decreases the acquirer's earnings per share
Accretion/dilution analysis compares the acquirer's pro forma EPS post-acquisition to standalone EPS to assess whether the deal is financially beneficial.
A rolling 12-month revenue forecast model is updated monthly by dropping the oldest month and adding a new forecast month. This technique is called:
Answer: Rolling forecast
A rolling forecast continuously extends the forecast horizon by one period as each period closes, keeping the outlook at a constant forward-looking window.
In a fintech payments model, gross profit is calculated as revenue minus cost of revenue. Which item is typically included in cost of revenue for a payments company?
Answer: Interchange fees paid to card networks
Interchange fees paid to card networks (Visa, Mastercard) are a direct cost of processing payments and are included in cost of revenue for payments fintechs.