Start learning →

CA Final Valuation (Finance) — practice questions

Explore 71 free Valuation (Finance) questions in CA Final Strategicfinancialmanagement. Open each question or exercise to read its content, reference answers and available explanation.

Practise Valuation (Finance) with Quill →

Valuation (Finance) questions and exercises with answers

Showing questions 1–30 of 71.

Before valuing a suffering company, its financial statements are first:Read the answer and worked solution →Buying a distressed firm's debt cheaply to profit on recovery is a:Read the answer and worked solution →Which adjustment is made when recasting a private distressed company's statements?Read the answer and worked solution →Weighting market, income and asset-based values into one average is called:Read the answer and worked solution →Real options analysis of a distressed firm's equity is linked with which model?Read the answer and worked solution →Startups like Uber are typically given post-money valuations based on:Read the answer and worked solution →A startup valuation rests mainly on the firm's:Read the answer and worked solution →Who mostly supplies the money that sets startup valuations?Read the answer and worked solution →Which episode shows that startup investors are not infallible?Read the answer and worked solution →Why is comparative valuation less accurate for early-stage startups?Read the answer and worked solution →Early-stage startup valuation is more nuanced mainly because they lack:Read the answer and worked solution →Which reference points are used for pre-revenue startup valuation?Read the answer and worked solution →Which kind of asset is a patent?Read the answer and worked solution →Few sales of benchmark intangibles are observable, so valuers use present value or:Read the answer and worked solution →A stock market indirect estimate of intangibles equals market cap minus:Read the answer and worked solution →A firm's market cap is 900 crore and book value of hard assets is 650 crore. Implied intangibles are:Read the answer and worked solution →Which technique is especially used for a drug pipeline of products under development?Read the answer and worked solution →Which specialised ratio is used in relative valuation of R&D-heavy firms?Read the answer and worked solution →Why do pharma valuers also estimate expiring patents?Read the answer and worked solution →Valuations of intangibles are often needed for financial reporting and:Read the answer and worked solution →Valuing data as an asset is seen as needing:Read the answer and worked solution →For a bank or insurer's DCF, free cash flow to equity is net income less reinvestment in:Read the answer and worked solution →For a financial services firm, debt is more akin to:Read the answer and worked solution →A DCF of a financial firm discounts equity cash flows at the:Read the answer and worked solution →Which measure is industry-specific for insurance companies?Read the answer and worked solution →Which measure suits wealth and investment management firms?Read the answer and worked solution →Which pair suits comparing investment banks?Read the answer and worked solution →Banks are compared using net interest margin and:Read the answer and worked solution →The ESG investing principle prioritizes environmental issues, social issues and:Read the answer and worked solution →The term ESG first came to prominence in a 2004 report titled:Read the answer and worked solution →

Worked practice questions

Before valuing a suffering company, its financial statements are first:

  1. Restated at replacement cost
  2. Frozen at the last audited date
  3. Converted to a cash basis only
  4. Recast to show true debt and earnings
Show answer and solution

Correct answer: D. Recast to show true debt and earnings

Recasting adjusts the statements so that indebtedness, financing costs and recurring earnings are shown fairly before any method is applied.

Open this question →

Buying a distressed firm's debt cheaply to profit on recovery is a:

  1. Currency hedge plan
  2. Tax saving plan
  3. Fixed dividend plan
  4. Recovery profit play
Show answer and solution

Correct answer: D. Recovery profit play

Buying the company or its debt at a discount is an investment strategy aimed at profit when the firm recovers.

Open this question →

Which adjustment is made when recasting a private distressed company's statements?

  1. Adding back goodwill
  2. Capitalizing all R&D
  3. Normalizing excess salaries
  4. Deleting all the debt
Show answer and solution

Correct answer: C. Normalizing excess salaries

Excess owner salaries in private companies are normalized so that recurring earnings are not understated.

Open this question →

How to practise

  1. Choose a Valuation (Finance) question and try to work out your answer.
  2. Open the question to check the correct answer and read its worked solution.
  3. Continue in the app for bite-sized lessons, explanations and review with Quill. You can start without creating an account.

More Strategicfinancialmanagement topics

Mergers Acquisitions and Corporate RestructuringBusiness ValuationCapital BudgetingForeign Exchange Exposure and Risk ManagementInterest Rate RiskModern Portfolio TheoryPortfolio ManagementFutures Contract