Ryboa Haima Trading Company Interview Questions and Answers

The treasury stock method is used to calculate the potential dilution of stock options and warrants. It assumes that the proceeds from the exercise of options and warrants are used to buy back shares at the average market price.

• TSM calculates the dilutive effect of stock options and warrants

• It assumes that the proceeds from the exercise of options and warrants are used to buy back shares at the average market price

• The difference between the number of shares issued and the num...read more

The 3 financial statements are linked through the flow of information and transactions between them.

• The income statement shows revenue and expenses for a period of time, which affects the retained earnings on the balance sheet.

• The balance sheet shows assets, liabilities, and equity at a specific point in time, which affects the cash flow statement.

• The cash flow statement shows the inflow and outflow of cash during a period of time, which affects the balance sheet.

• Changes in t...read more

WACC stands for Weighted Average Cost of Capital. It is the average cost of all the capital used by a company.

• WACC is used to determine the minimum return a company must earn on its investments to satisfy its investors.

• It is calculated by taking the weighted average of the cost of debt and the cost of equity.

• The formula for WACC is: WACC = (E/V x Re) + ((D/V x Rd) x (1 - Tc)), where E is the market value of the company's equity, V is the total market value of the company's ca...read more

Adj. EBITDA is calculated by adding back non-recurring expenses to EBITDA. Non-recurring items include one-time expenses or gains.

• Adj. EBITDA = EBITDA + non-recurring expenses

• Non-recurring items include one-time expenses or gains such as restructuring costs, legal settlements, or gains from asset sales

• Non-recurring items are typically disclosed in the footnotes of financial statements

Enterprise value is the total value of a company, including debt and equity.

• EV is calculated by adding market capitalization, debt, and minority interest, and then subtracting cash and cash equivalents.

• It represents the amount of money required to acquire the entire business.

• EV is a more comprehensive measure of a company's value than market capitalization alone.

• EV can be used to compare companies with different capital structures.

• Example: Company A has a market cap of $1 bil...read more

Trading comps and transaction comps are valuation methods used in investment banking.

• Trading comps involves comparing a company's financial metrics to those of its peers in the same industry.

• Transaction comps involves analyzing the financial metrics of companies that have recently been acquired or sold.

• Both methods are used to determine the value of a company in a potential merger or acquisition.

• Trading comps are based on public information, while transaction comps are based ...read more

I am a finance professional with expertise in financial projects, financial ratios, and their impact on share prices.

• I have experience in leading finance projects from start to finish

• I am well-versed in analyzing financial ratios and interpreting their implications

• I understand how financial ratios can impact share prices and can provide insights on this

• I have worked with various financial ratios such as liquidity ratios, profitability ratios, and solvency ratios

• I am familiar ...read more