Challenging Content Questions:

• On Page 66-67 of the Accounting Fundamentals slides, kindly help with how to calculate Net
Capex, still confused about that 10. [We are simply solving for the missing variable. The
beginning balance is 810, depreciation reduces that by 90. However, the ending balance is 730
so that implies net capex of 10.]

• On Page 10 of the Accounting Fundamentals slides, why is cash recorded as negative (100)
under current assets? Double Entry Accounting option 1. [There are 2 components to every
accounting transaction. In the example you cite, the company is paying down debt of 100 so
cash must also decline by 100 to balance the balance sheet.]

• Could you explain what exactly is a leveraged buyout? I didn't fully understand this concept.
[Buying a company or an asset using a large amount of leverage (debt).]

• What is the difference between Economic Modeling and Financial Modeling? Does Financial
Modeling provide a foundation if I want to be an economist? [Economic modeling would entail
projecting interest rates, inflation, GDP/GNP, unemployment, and things of that nature.
Financial modeling is primarily concerned with projecting the profitability and/or cash flow for a
business or project. Financial modeling also involves valuation and mergers and acquisitions.
While Economic and Financial Modeling are different, a lot of the modeling concepts and best
practices are transferrable.]

• What’s the best way to grasp, remember or master Excel formulas for finance? How long does it
usually take to master the concepts? [Repetition is the key. Our Excel courses will provide you
with a foundation focusing on the formulas that come up most frequently in financial modeling.
The timeframe is up to the learner and how much they practice.]

• In terms of the following financial statement line items, what effect do they have on the cash
flow statement: tax charge, finance interest paid and received. [See screenshot below.]

• With respect to cash flow statement which, between direct and indirect method of arriving at
net cash flow is generally and currently in use and acceptable? [Indirect is more common in
North America and may be more common in the African continent as well.]
• Looking at the professional ethics we learn today, does code of conduct change with time, or
adjusted due to instances? [No, ethics does not change too much over time.]

• For the sake of this training, when looking at the income statement, will revenue/sales/income
be showing a positive amount while expenses negative amounts? [Revenue and expenses are
usually both presented as positive numbers. This has been the trend recently, but some
companies express costs as negative numbers. On the cash flow statement, a positive number
always indicates a cash inflow and a negative number is a cash outflow.]

• It’s almost impossible to know all shortcuts by heart. So, what are your go to Excel shortcuts
that you would recommend a rookie Financial Analyst to know by heart? Thank you! [Some of
the basics should include Ctrl C (Copy) and Ctrl V (Paste), Ctrl R (Fill Right), Ctrl D (Fill Down), Ctrl
S (Save), Ctrl Z (Undo). Ctrl 1 opens up the formatting dialog box. We recommend finding the
shortcut for something you are constantly using the mouse for, memorize that shortcut and
then continue the process. With repetition, this will become second nature!]

• Can we have a good summary to help us revise what we learnt after taking each course.
[Unfortunately, we don’t have extra summaries available. Please review back through the
downloaded materials and the videos. Our learning management system (LMS) also allows you
to take notes which can be reviewed later.]

• How relevant are the Qualified Assessments in preparing for the final exam, in terms of
questions standard? [They are very relevant.]

• Could you please go through slide 36 under Professional Ethics and provide examples if
possible? "Independence and Objectivity” [Independence relates to lack of conflicts of interest
whereas objectivity relates to the ability to remain unbiased.]

• What is a stub period? [This is simply a fractional year. Valuations are done throughout the year
so there will usually be some portion of the year that is still remaining. The cash flows for this
stub period should be included in a DCF valuation.]

• I don't understand the cash flow statement if there is a further explanation that will be great
[See our demonstration file from our first expert panel on June 9, 2022.]

• After completing the program and acquiring the FMVA certification, how does CFI help their
certified members keep tab with the updates & trends in the industry? [Keeping up to date on
the industry is the responsibility of the individual.]

• I really love the lessons. Shall we be provided with Excel templates for some of the lessons that
have formulas/calculations? That would be really great. [Yes there are plenty of Excel templates
that are available for download.]

• Why could the year frac calculated by me be relatively different from the yearfrac
demonstrated? [The last argument in YEARFRAC is optional and has different “day-convention”
parameters. For example, one of the options is to use a 30-day month and 360-day year. This is
the day-convention used for US Corporate bonds (and other debt securities), for example.]
• Need more explanation in having the iterative calculation checked or unchecked? [This setting
needs to be checked if there are circular loops in the model. Excel can perform linear
calculations and circular calculations. But, in order for Excel to perform circular calculations, it
requires the iterative calculation box to be activated.]

• Why is unearned revenue a liability while accounts receivable is an asset ? They look alike in
definition but what is the difference? [Revenue is recognized when it has been earned but not
necessarily when the cash associated with the revenue is received. If the revenue is recognized,
but there has not been a cash collection, then accounts receivable is created. Unearned revenue
is cash that the company has already received, but has not yet recognized the revenue because
the revenue has not be earned.]

• In preparing a statement of cashflow, how do you know if it is an increase/decrease in accounts

receivables and/or accounts payable? [An increase in an asset is a use of cash. Think of it this
way: a company uses cash to purchase inventory. The inventory account increases and cash
decreases. Conversely, a decrease in an asset is a source of cash. An example of this would be a
company selling PP&E. The PP&E account would decrease but cash would increase. Regarding
the other side of the balance sheet (liabilities & equity), if a liability or equity account increases
this is a source of cash. An example would be a company issuing debt: a liability for the debt
would increase but cash would also increase.]

• Good day, please what kind of real-life decisions/ scenarios would require us to use regression
analysis? [Calculating beta for a company’s cost of equity would be one example.]

• Kindly elaborate on deferred taxes and the difference between taxable income and accountable
income. [Accounting income is based on accounting rules while taxable income is based on
government rules. Deferred taxes are effectively a reconciliation between the two different sets
of rules.]

• Is there a way you can give a deeper explanation on the weighted average cost of capital
(WACC) section of the Corporate Finance Overview? Particularly Slide 39. [Debt financing is
‘cheaper’ than equity financing since it carries less risk (it has a priority claim on a company’s
cash flows and assets). Equity financing is the most expensive form of financing as it is the
residual claim on a company’s assets/cash flows and thus is the most risky. Equity only has value
if the cash flows are able to first pay off the debt. In theory, there is an optimal mix of debt and
equity financing, that lowers the overall cost of capital, thereby increasing company value.]

• How is the salvage value of PP&E determined? What are the factors to consider when doing
that? [Management often estimates the salvage based on the type of business.]

• Calculating the weighted average cost of capital (WACC) gets me confused. How do you come
with the percent of net debt and the percent of equity for the capital structure? [This is based
on the company’s target capital structure (percentage debt and percentage equity). Often, the
current capital structure is used as the target capital structure.]
 • How does the analyst course from CFI defer from CFA? [The CFA materials tend to focus more
on theory, whereas the CFI is more about how to apply the theories in a practical sense. At CFI,
we want our learners to be able to perform day-to-day tasks with a high degree of productivity.]

• Can a company incur losses but have a favourable cash flow and vise versa. How so? [Yes, this is
possible. High non-cash expenses will reduce net income and can create losses, but the
company can still be cash flow positive. Conversely, if a company generates positive net income,
it can still be cash flow negative if it spends a lot of money on capital expenditure or
reinvestment in the business to grow more quickly.]

• Which accounting principles are used by CFI in preparing course materials? US GAAP or IFRS?
Thank you. [We try to remain jurisdictionally neutral but for the purposes of our materials we
tend to present mostly following IFRS. Over time, IFRS and US GAAP have become more similar.]

• Is cost of sales the same as inventory sold ? [Yes, these are effectively the same, although there
may be some other expenses allocated to the cost of sales category.]

• Is it possible for a company to be financed with 100% debt? [Theoretically yes, but this does not
happen in reality. Lenders would never accept an all-debt capital structure as the potential for
the company to enter financial distress would be extremely high.]

• The exam had a question about non-cash working capital and I did not know how to go about
that. [Working capital is often described as current assets and current liabilities. Cash is
technically a current asset. However, we do not calculate the change in the cash account on the
cash flow statement since determining the ending cash balance is precisely what we are aiming
for on the cash flow statement.]

Softer Content Questions:

• Hello, I’d like to know what roles are available for someone with the FMVA certification in the
Labour market. [Any role requiring a person to have financial modeling skills could be a good fit.
Some examples include a Financial Analyst at a corporation, Investment Banking Analyst, Equity
Research Associate.]

• Is it necessary to download the Macabacus for Excel [It is not necessary to download and install
the Macabacus Add-in. All the exercises in the FMVA certification can be done without the
Macabacus Add-in. However, it greatly increases productivity in the Microsoft Office Suite.
Unfortunately, Macabacus is only available to run on a PC version of Microsoft Office. If you
have a Mac, you can install an emulator like Bootcamp or Parallels and run the PC version of
Microsoft Office. In that case you can install Macabacus.]

• How authenticate is the CFI certificate? [We’re not sure we understand the question, but the
FMVA is blockchain-authenticated.]

• After doing the final exam will we get the FMVA certificate and is it recognized by employers in
Africa? How can we use the FMVA certification for our advantage? Also will the exam be timed?
[Yes, you will receive the FMVA certificate after completing all the requirements. It is 3 hours
 long and consists of 50 multiple choice questions. The Financial Modeling & Valuation Analyst
FMVA® certification can help you learn financial modeling skills, streamline a budgeting and
forecasting process, or improve competency levels across the entire accounting and finance
spectrum. The FMVA® certification provides all the skills, tools, and techniques required to
become a world-class financial professional. This should give you the background and
confidence to land a professional finance job at many organizations across the world.]

• Will the final exam include all we have done or just the last course? [The exam includes
questions from the all the Prep and the Core courses.]

• Is there a possibility of giving more exercises on the financial accounting for personal practice?
[We don’t have additional exercises, but there are lots of exercises inside all the courses.]

• Is the FMVA certificate renewal every year [No. You do not need to renew your FMVA each
year.]

• Will the final exams be per each unit or its one exam for the entire course and does the
assessments form part of it? [To complete each course, you need to complete a Qualified
Assessment which is at the end of the course. Then, to complete your FMVA, you need to pass
the FMVA exam after completing all the course requirements.]

• Hello how can I download lecturer's notes. [There is a download ‘lesson’ near the beginning of
each course and often at the end as well.]

• What I have to do exactly to complete the program and get the certificate? [You need to
complete all the required courses and pass the FMVA exam.]

• What is a CPE certificate? It is not available in some course. Is there any explanation? [CPE is
short for Continuing Professional Education, which is required for some professional
certifications. Not all courses qualify for the CPE credit.]

• I would love a career with CFI after my FMVA & BIDA certification. How best should I pursue
this? [Please monitor our website for postings for available positions.]

Prerequisite Concerns:
• Is there a finance or accounting prerequisite to fully understand (not complete) the course? Do I
need an accounting background or a business background to successfully complete CFI training?
[The courses we’ve planned at the beginning of the learning path are tailored to learners that
might not have much of an accounting or business background. These courses provide a
foundational understanding of accounting and corporate finance. The materials build on this
content as you progress through the FMVA.]

• For the hours attached to each module, are these recommended times to complete the learning
or it shows the hours of video content? [Roughly 2 times the video content length is typical for
the total time to complete the course.]
Technical Issues:
• Is it possible to download the video? [No. This is not an option. But, you have access to the
materials for 12-months.]

• Will we be getting access to Capital IQ platform? I can’t see it in my dashboard. [No. The
program does not provide access to Capital IQ. However, we have included the Capital IQ
Fundamentals Course in the program to provide everyone with an understanding of what
Capital IQ is and what it can do.]