IMCP / CENEVAL Examen Uniforme de Certificación en Finanzas Empresariales (EUC-FINEM)

Under Mexican financial reporting standard NIF B-2 (Estado de flujos de efectivo), what is the conceptual difference between the direct and the indirect method for presenting cash flows from operating activities?

• AThe direct method reports operating cash flow before interest and taxes, while the indire…
• BThe direct method shows gross operating receipts and payments; the indirect method starts…
• CThe direct method is required for listed companies, while the indirect method is reserved…
• DThe direct method classifies changes in working capital as investing activities, while th…

Under NIF B-10 (Efectos de la inflación), how must an entity report when its economic environment is non-inflationary (cumulative inflation for the three preceding years below 26%)?

• AIt keeps applying the comprehensive restatement method, using the UDI to restate all non-…
• BIt restates fixed assets at replacement cost appraisals and ignores monetary items
• CIt stops recognizing inflation effects (no restatement or REPOMO) but keeps prior restate…
• DIt may no longer present comparative financial statements from prior periods, because the…

Under NIF D-5 (Arrendamientos), how does a lessee account for a long-term lease that in the past would have been treated as an operating lease (arrendamiento puro), and why does this matter for ratio analysis?

• AIt keeps the lease off balance sheet and records rent expense, so leverage ratios and EBI…
• BIt records the full fair value of the property as its own property, plant and equipment,…
• CIt records the lease as a contribution to equity, which reduces reported leverage
• DIt recognizes a right-of-use asset and a lease liability, so reported debt and EBITDA rise

Using the aumentos y disminuciones (increases and decreases) method, an analyst compares two years: accounts receivable rose from MXN 12,500,000 to MXN 15,000,000 while net sales rose from MXN 80,000,000 to MXN 88,000,000. What is the change in receivables, and what does it suggest?

• AAn increase of MXN 2,500,000 (+20.0%); receivables grew about twice as fast as sales (+10…
• BAn increase of MXN 2,500,000 (+16.7%); receivables grew in line with sales, so collection…
• CAn increase of MXN 2,500,000 (+20.0%); faster growth in receivables than in sales shows i…
• DAn increase of MXN 8,000,000 (+10.0%); receivables and sales grew at the same rate

Nominal sales grew from MXN 80,000,000 to MXN 92,000,000 in one year, while the INPC rose 4.50%. What is the real (inflation-adjusted) growth in sales?

• A15.00%
• B10.50%
• C10.05%
• D8.74%

In a vertical (porcentajes integrales) analysis of the statement of comprehensive income, which line item is taken as 100%?

• AGross profit (utilidad bruta)
• BOperating profit (utilidad de operación)
• CTotal assets (activo total)
• DNet sales or revenue (ingresos netos)

A company's statement of financial position shows total assets of MXN 250,000,000, current assets of MXN 90,000,000, total liabilities of MXN 150,000,000 and inventories of MXN 45,000,000. In a porcentajes integrales analysis of the balance sheet, what percentage do inventories represent?

• A18.0% of total assets
• B50.0% of current assets, the standard base for balance sheet analysis
• C30.0% of total liabilities
• D45.0% of stockholders' equity

A company's current assets of MXN 45,000,000 include unrestricted cash of MXN 8,000,000, cash restricted in escrow for debt service for more than 12 months of MXN 4,000,000, accounts receivable of MXN 16,000,000, inventories of MXN 14,000,000 and prepaid expenses of MXN 3,000,000. Current liabilities are MXN 20,000,000. What is the acid-test ratio (prueba del ácido)?

• A1.40x
• B2.25x
• C1.20x
• D0.40x

A company has total liabilities of MXN 120,000,000 and stockholders' equity of MXN 80,000,000. What are its debt-to-equity ratio and its debt ratio (total liabilities / total assets)?

• ADebt-to-equity 0.67; debt ratio 40.0%
• BDebt-to-equity 1.50; debt ratio 60.0%
• CDebt-to-equity 2.50; debt ratio 60.0%
• DDebt-to-equity 1.50; debt ratio 150.0%

A loan agreement requires interest coverage (EBIT / interest) of at least 3.50x and net debt to EBITDA of at most 3.00x. The borrower reports EBIT of MXN 42,000,000, depreciation and amortization of MXN 14,000,000, interest expense of MXN 10,500,000, financial debt of MXN 180,000,000 and cash of MXN 25,000,000. Does it comply?

• ANo: interest coverage is 4.00x, but net debt to EBITDA is 3.21x
• BNo: interest coverage is 3.00x, while net debt to EBITDA is 2.77x
• CNo: interest coverage is 2.67x and net debt to EBITDA is 3.69x
• DYes: interest coverage is 4.00x and net debt to EBITDA is 2.77x

A distributor's cost of sales was MXN 72,000,000 and its net sales MXN 96,000,000. Inventory was MXN 18,000,000 at the start of the year and MXN 6,000,000 at the end. Using average inventory and a 360-day year, what are inventory turnover and days of inventory?

• A8.0 times; 45 days
• B12.0 times; 30 days
• C4.0 times; 90 days
• D6.0 times; 60 days

A distributor has annual credit sales of MXN 109,500,000 and cost of sales of MXN 73,000,000. Accounts receivable are MXN 18,000,000, inventories MXN 15,000,000 and accounts payable MXN 9,000,000. Using a 365-day year, what is the cash conversion cycle?

• A180.0 days
• B90.0 days
• C45.0 days
• D105.0 days

A company has days sales outstanding of 42, days inventory of 68 and days payable of 35. It renegotiates so that days inventory falls to 48 and days payable rise to 45. How do the operating cycle and the cash conversion cycle change?

• AOperating cycle falls by 30 days; cash conversion cycle falls by 20 days
• BOperating cycle rises by 10 days; cash conversion cycle falls by 10 days
• COperating cycle falls by 20 days; cash conversion cycle falls by 30 days
• DOperating cycle falls by 20 days; cash conversion cycle does not change

Over two years a company's current ratio fell from 1.8 to 1.1, its debt-to-equity ratio rose from 0.8 to 1.9, its interest coverage fell from 6.0x to 1.7x, and its return on equity rose from 12% to 16%. Which assessment of its financial situation is most reasonable?

• AHigher leverage drives the better ROE, while liquidity and debt-service capacity have wea…
• BSolvency has improved, because the company now uses more external financing for its growth
• CThe rise in ROE proves that operating efficiency improved and that financial risk is unch…
• DLiquidity has improved, because current liabilities now finance a larger share of total a…

A company reports operating profit of MXN 25,000,000, interest expense of MXN 6,000,000, interest income of MXN 1,000,000 and a foreign exchange loss of MXN 2,500,000 on its dollar debt. Under NIF B-3, these financing items form the resultado integral de financiamiento (RIF). What is profit before income taxes?

• AMXN 20,000,000
• BMXN 17,500,000
• CMXN 22,500,000
• DMXN 16,500,000

Under NIF B-3, which items are presented in other comprehensive income (otro resultado integral, ORI) rather than in net income?

• AThe foreign exchange loss on the company's US dollar bank loan
• BAn impairment loss recognized on goodwill from a past acquisition
• CThe result of a discontinued operation sold during the year
• DTranslation effects of foreign operations and effective cash flow hedges

When analyzing a company's ability to cover its interest expense, which profit level is normally used, and why?

• AOperating profit (EBIT), because interest is paid from it
• BNet income, because it is the profit that remains available to shareholders
• CGross profit, because it excludes all operating expenses of the period
• DProfit before income taxes, because interest has already been deducted from it

A plant's fixed operating costs are MXN 4,800,000 per year. Each unit sells for MXN 400 and has a variable cost of MXN 250. What is the operating break-even point in units and in sales?

• A19,200 units; MXN 7,680,000
• B12,000 units; MXN 4,800,000
• C32,000 units; MXN 12,800,000
• D32,000 units; MXN 8,000,000

A plant sells 100,000 units a year at MXN 50 each, with a variable cost of MXN 30 per unit and fixed operating costs of MXN 1,200,000. What is the degree of operating leverage at this volume?

• A1.67x
• B2.50x
• C4.17x
• D0.40x

A company has EBIT of MXN 12,000,000, annual interest of MXN 4,000,000 and preferred dividends of MXN 1,400,000. The income tax rate is 30%. What is its degree of financial leverage?

• A1.50x
• B1.82x
• C2.80x
• D2.00x

A company's degree of operating leverage is 2.50x and its degree of financial leverage is 1.60x. If sales rise 8.00%, by how much should earnings per share rise?

• A32.00%
• B20.00%
• C12.80%
• D4.00%

A company's net income is MXN 36,000,000 and preferred dividends are MXN 2,000,000. It had 10,000,000 common shares outstanding on 1 January and issued 2,000,000 more on 1 July. What is basic earnings per share?

• AMXN 3.27
• BMXN 2.83
• CMXN 3.40
• DMXN 3.09

A company reports sales of MXN 120,000,000, net income of MXN 10,800,000, total assets of MXN 80,000,000 and stockholders' equity of MXN 32,000,000. Using the three-factor DuPont model, what are its net margin, asset turnover, equity multiplier and return on equity (ROE)?

• ANet margin 13.50%, asset turnover 0.67x, equity multiplier 2.50x, ROE 22.50%
• BNet margin 9.00%, asset turnover 1.20x, equity multiplier 1.80x, ROE 19.44%
• CNet margin 9.00%, asset turnover 1.50x, equity multiplier 2.50x, ROE 33.75%
• DNet margin 10.80%, asset turnover 1.50x, equity multiplier 2.00x, ROE 32.40%

A company has sales of MXN 200,000,000, EBIT of MXN 40,000,000, interest of MXN 10,000,000, income taxes of MXN 9,000,000, total assets of MXN 160,000,000 and equity of MXN 80,000,000. Using the five-factor DuPont model, which decomposition is correct?

• ATax burden 0.300, interest burden 0.250, EBIT margin 20.00%, asset turnover 1.25x, levera…
• BTax burden 0.700, interest burden 0.750, EBIT margin 20.00%, asset turnover 1.25x, levera…
• CTax burden 0.700, interest burden 0.800, EBIT margin 15.00%, asset turnover 1.00x, levera…
• DTax burden 0.775, interest burden 0.750, EBIT margin 25.00%, asset turnover 1.50x, levera…

A company reports net income of MXN 21,000,000, income taxes of MXN 9,000,000, net interest expense of MXN 6,000,000, depreciation of MXN 8,000,000 and amortization of MXN 2,000,000. What is its EBITDA?

• AMXN 36,000,000
• BMXN 31,000,000
• CMXN 44,000,000
• DMXN 46,000,000

Why is EV/EBITDA often preferred to the price-to-earnings (P/E) ratio when comparing companies with very different capital structures?

• AEBITDA is before interest and EV includes debt and equity, so financing mix matters less
• BBecause EBITDA includes non-operating gains, it gives a truer picture of the company's ne…
• CBecause EV/EBITDA ignores taxes, depreciation and capital intensity, it is the same acros…
• DBecause the Ley del Mercado de Valores forbids using P/E ratios in fairness opinions

A company's target structure is 40% debt and 60% equity. Its debt yields 11.00% before tax, its cost of equity is 16.50%, and the income tax rate is 30%. What is its weighted average cost of capital (WACC)?

• A14.30%
• B12.98%
• C12.10%
• D11.22%

A listed company's share trades at MXN 40.00. It has just paid a dividend of MXN 2.40, and dividends are expected to grow 5.00% a year indefinitely. Using the Gordon model, what is its cost of equity?

• A11.00%
• B6.30%
• C11.30%
• D11.62%

When estimating the cost of equity as the company's own long-term bond yield plus a premium, what justifies adding the premium?

• AInterest is tax-deductible for the company, while dividends paid to shareholders are not
• BShareholders' claim ranks behind creditors, so they bear more risk
• CShares have a fixed maturity, so investors need compensation for reinvestment risk
• DStock exchange listing rules require equity to yield more than the issuer's debt

A comparable listed company has a levered beta of 1.45, a debt-to-equity ratio of 0.50 and a 30% tax rate. The unlisted company being valued will use a debt-to-equity ratio of 0.80 with the same tax rate. Using Hamada's equation, what is the relevered beta?

• A1.07
• B1.93
• C1.13
• D1.68

According to Modigliani and Miller's Proposition I, in perfect markets with no taxes, bankruptcy costs or transaction costs, how does capital structure affect firm value?

• AFirm value rises steadily with leverage, because debt is always cheaper than equity
• BIt does not: levered and unlevered firm values are equal
• CFirm value reaches its maximum at a 50/50 mix of debt and equity
• DFirm value falls with leverage, because creditors demand higher yields as debt grows

An all-equity company worth MXN 100,000,000 issues MXN 40,000,000 of perpetual debt to buy back shares. Under Modigliani-Miller with corporate taxes at 30% and no distress costs, what are the new firm value and equity value?

• AFirm value MXN 140,000,000; equity MXN 100,000,000
• BFirm value MXN 100,000,000; equity MXN 60,000,000
• CFirm value MXN 128,000,000; equity MXN 88,000,000
• DFirm value MXN 112,000,000; equity MXN 72,000,000

Under the static trade-off theory, what determines a company's optimal capital structure?

• AThe balance between the marginal tax benefit of debt and the marginal cost of financial d…
• BThe comparison between share issuance costs and bank loan fees
• CThe preference for retained earnings over short-term bank debt
• DThe legal reserve required by the Ley General de Sociedades Mercantiles compared with emp…

Under the pecking order theory (Myers and Majluf), why do companies prefer internal funds, then debt, and use new equity last?

• ABecause Mexican rules prohibit profitable companies from issuing new shares to the public
• BBecause debt carries no agency costs, unlike equity financing
• CBecause retained earnings give companies an income tax deduction
• DBecause issuing shares signals to investors that they may be overvalued

A subsidiary has total assets of MXN 120,000,000 and non-interest-bearing current liabilities of MXN 20,000,000. EBIT is MXN 20,000,000, the tax rate is 30% and WACC is 10.50%. What is its economic value added (EVA)?

• AMXN 9,500,000
• BMXN 3,500,000
• CMXN 1,400,000
• DMXN 6,650,000

How is market value added (MVA, valor de mercado agregado) related to economic value added (EVA)?

• AMVA equals the latest year's EVA multiplied by the price-to-book ratio
• BMVA equals the book value of debt subtracted from cumulative historical EVA
• CMVA is, in theory, the present value of all expected future EVA
• DMVA is an equity reserve under NIF for future share repurchases

In a FODA (SWOT) analysis based on a company's financial diagnosis, which item is a threat (amenaza)?

• AMore than half of revenue comes from a single customer with strong bargaining power
• BLow leverage and unused committed credit lines with two banks
• CA rise in market rates that will increase the cost of its floating-rate debt
• DNew nearshoring demand from manufacturers relocating plants to Mexico

A company has cash of MXN 8,000,000, accounts receivable of MXN 20,000,000, inventories of MXN 25,000,000 and prepaid expenses of MXN 5,000,000. Its current liabilities are suppliers MXN 18,000,000, short-term bank loans MXN 12,000,000 and accrued expenses MXN 6,000,000. What is its net working capital (capital de trabajo neto)?

• AMXN 34,000,000
• BMXN 17,000,000
• C-MXN 8,000,000
• DMXN 22,000,000

Which working capital financing policy finances fixed assets and the permanent part of current assets with long-term debt and equity, and only the seasonal part of current assets with short-term debt?

• AAggressive policy
• BConservative policy
• CMatching (hedging) policy
• DRestrictive current-asset investment policy

A company's ROE, measured on ending equity, is 20% and its dividend payout ratio is 35%. If it keeps its margins and capital structure and issues no new shares, what is its sustainable growth rate?

• A13.00%
• B7.00%
• C16.25%
• D14.94%

A company's ROA, measured on ending assets, is 12% and it retains 60% of its earnings. If it uses no external financing at all, what is its internal growth rate?

• A7.76%
• B7.20%
• C12.00%
• D4.80%

A company with sales of MXN 100,000,000 expects a 25% increase. Operating assets are 80% of sales and spontaneous liabilities 20% of sales. Net margin is 8% and the payout ratio 40%. Using the percentage-of-sales method, how much external financing does it need?

• AMXN 15,000,000
• BMXN 11,000,000
• CMXN 9,000,000
• DMXN 5,000,000

A distributor expects annual demand of 40,000 units. Each order costs MXN 450 to place and receive, and holding one unit for a year costs MXN 25. Using the economic order quantity (EOQ) model, what are the optimal order size and the total annual ordering plus holding cost?

• AEOQ 849 units; total cost MXN 21,225
• BEOQ 1,200 units; total cost MXN 30,000
• CEOQ 1,440 units; total cost MXN 36,000
• DEOQ 1,200 units; total cost MXN 15,000

A profitable company has a cash conversion cycle of 120 days. Its days sales outstanding are 90 against an industry average of 45, and it funds the gap with expensive short-term bank loans. Which recommendation is most viable to correct the problem?

• ATighten credit and collection to reduce days sales outstanding
• BExtend customer credit terms to 120 days to increase sales and market share
• CIncrease inventory levels to avoid stockouts during peak season
• DPay a special dividend to show shareholders confidence in the business

A supplier offers terms of 2/10, net 30. If the buyer skips the discount and pays on day 30, what are the nominal annual cost and the effective annual cost of that financing, using a 365-day year?

• ANominal 37.24%; effective 44.59%
• BNominal 36.50%; effective 43.53%
• CNominal 24.83%; effective 27.86%
• DNominal 37.24%; effective 37.24%

A company issues 90-day short-term certificados bursátiles with a face value of MXN 10,000,000 at a discount rate of 10.00% a year (360-day basis). What does it receive, and what is its annualized cost on the funds received?

• AMXN 9,000,000; 11.11%
• BMXN 9,750,000; 10.00%
• CMXN 9,756,098; 10.00%
• DMXN 9,750,000; 10.26%

A supplier factors MXN 5,000,000 of 60-day invoices without recourse. The factor advances 85% (MXN 4,250,000), charges an upfront fee of 2% of face value (MXN 100,000) and deducts interest at 14% a year on the advance for 60 days (360-day basis, MXN 99,167). What is the nominal annual cost based on the net cash received?

• A16.00%
• B29.50%
• C14.00%
• D23.90%