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Financial Modeling & Forecasting Flashcards

7 cards from real CFP practice questions. Tap to flip, then mark Knew It or Still Learning โ€” missed cards come back until you master them.

Read the first 7 Financial Modeling & Forecasting flashcards as text
  1. In a three-statement financial model, which statement serves as the primary driver that links the income statement to the balance sheet?

    Answer: Cash flow statement

    The cash flow statement bridges the income statement and balance sheet by reconciling net income to cash movements and updating ending cash on the balance sheet.

  2. A fintech startup projects 40% YoY revenue growth for three years, then 10% terminal growth. Which modeling technique best captures this transition?

    Answer: Two-stage DCF model

    A two-stage DCF separates high-growth phases from stable terminal growth, making it ideal for high-growth fintech companies transitioning to maturity.

  3. When building a revenue forecast for a SaaS fintech platform, which metric is most critical to model first?

    Answer: Monthly Recurring Revenue (MRR) and churn rate

    MRR combined with churn rate drives all downstream revenue projections for subscription-based SaaS fintech businesses.

  4. A sensitivity analysis table in Excel shows NPV values across different WACC and growth rate combinations. What type of analysis is this?

    Answer: Data table sensitivity analysis

    A two-variable data table in Excel is the standard tool for sensitivity analysis, showing NPV outcomes across a matrix of input combinations.

  5. In modeling loan loss provisions for a fintech lender, which approach aligns with CECL (Current Expected Credit Loss) accounting?

    Answer: Lifetime expected loss model using forward-looking data

    CECL requires recognition of lifetime expected credit losses using forward-looking information, replacing the incurred loss model.

  6. Which forecasting method assigns exponentially decreasing weights to older historical data points?

    Answer: Exponential smoothing

    Exponential smoothing weights recent observations more heavily than older data, making it effective for time series with trends.

  7. A fintech model shows Days Sales Outstanding (DSO) increasing from 30 to 45 days. What is the most likely balance sheet impact?

    Answer: Accounts receivable increases

    Higher DSO means customers are taking longer to pay, which directly increases the accounts receivable balance on the balance sheet.