RIA Valuation & Analysis

Question 1

The Discounted Cash Flow (DCF) valuation method determines intrinsic value by:

Accepted Answer

Discounting future cash flows to present value using an appropriate discount rate

Answer

Comparing P/E ratios to industry peers

Answer

Adding total assets minus total liabilities

Answer

Multiplying earnings by the sector average multiple

Question 2

Enterprise Value (EV) differs from market capitalization because EV:

Accepted Answer

Accounts for both debt and cash in addition to equity market cap

Answer

Includes only equity value

Answer

Is always lower than market cap

Answer

Excludes minority interests

Question 3

A company's EBITDA represents:

Accepted Answer

Earnings Before Interest, Taxes, Depreciation, and Amortization

Answer

Earnings after all expenses including taxes and interest

Answer

Total revenue minus cost of goods sold

Answer

Net income divided by total assets

Question 4

Technical analysis primarily uses which information to forecast security prices?

Accepted Answer

Price patterns, trading volume, and historical market data

Answer

Financial statements and earnings reports

Answer

Economic indicators and central bank policy

Answer

Management quality and competitive positioning

Question 5

Return on Equity (ROE) measures:

Accepted Answer

Net income generated per dollar of shareholders' equity

Answer

Total return on an investment portfolio

Answer

Asset turnover efficiency

Answer

Debt servicing capability

Question 6

The Price-to-Book (P/B) ratio compares a company's market value to:

Accepted Answer

Net asset value (book value) per share

Answer

Annual revenue

Answer

Earnings per share

Answer

Dividend yield