Question
In company analysis, why do working capital items often rise with business activity?
Tap to flip
Answer
They generally scale with revenue or COGS.
Tap to flip back
Question
What does a firm's capital structure tell you about forecasting profitability and risk?
Tap to flip
Answer
Debt and interest depend on leverage, refinancing, and growth financing assumptions.
Tap to flip back
Question
Why would an analyst use sensitivity analysis on revenue growth or margins?
Tap to flip
Answer
To identify which assumption drives valuation risk most.
Tap to flip back
Question
Why is company analysis often more interpretive than mechanical?
Tap to flip
Answer
It tests understanding of business model elements, not heavy calculation.
Tap to flip back