Financial Forensics End Term: 24 December 2023, Set ADB3 (September 2023 term)

Calculate the given financial ratios in the subquestions based on the following information provided:

A company has the following financial statements:

Balance sheet:

Assets
Cash and cash equivalents: $8 million
Accounts receivable: $3 million
Inventory: $5 million
Total assets: $16 million

Liabilities
Accounts payable: $1 million
Short-term debt: $4 million
Long-term debt: $6 million
Total liabilities: $11 million

Shareholder's equity: $5 million

Income statement:
Revenue: $10 million
Cost of goods sold: $6 million
Operating expenses: $3 million
Net income: $1 million

Current Ratio

Calculate the given financial ratios in the subquestions based on the following information provided:

A company has the following financial statements:

Balance sheet:

Assets
Cash and cash equivalents: $8 million
Accounts receivable: $3 million
Inventory: $5 million
Total assets: $16 million

Liabilities
Accounts payable: $1 million
Short-term debt: $4 million
Long-term debt: $6 million
Total liabilities: $11 million

Shareholder's equity: $5 million

Income statement:
Revenue: $10 million
Cost of goods sold: $6 million
Operating expenses: $3 million
Net income: $1 million

Quick Ratio

Calculate the given financial ratios in the subquestions based on the following information provided:

A company has the following financial statements:

Balance sheet:

Assets
Cash and cash equivalents: $8 million
Accounts receivable: $3 million
Inventory: $5 million
Total assets: $16 million

Liabilities
Accounts payable: $1 million
Short-term debt: $4 million
Long-term debt: $6 million
Total liabilities: $11 million

Shareholder's equity: $5 million

Income statement:
Revenue: $10 million
Cost of goods sold: $6 million
Operating expenses: $3 million
Net income: $1 million

Inventory turnover ratio

Calculate the given financial ratios in the subquestions based on the following information provided:

A company has the following financial statements:

Balance sheet:

Assets
Cash and cash equivalents: $8 million
Accounts receivable: $3 million
Inventory: $5 million
Total assets: $16 million

Liabilities
Accounts payable: $1 million
Short-term debt: $4 million
Long-term debt: $6 million
Total liabilities: $11 million

Shareholder's equity: $5 million

Income statement:
Revenue: $10 million
Cost of goods sold: $6 million
Operating expenses: $3 million
Net income: $1 million

Gross Profit Margin – Expressed in Ratio

Calculate the given financial ratios in the subquestions based on the following information provided:

A company has the following financial statements:

Balance sheet:

Assets
Cash and cash equivalents: $8 million
Accounts receivable: $3 million
Inventory: $5 million
Total assets: $16 million

Liabilities
Accounts payable: $1 million
Short-term debt: $4 million
Long-term debt: $6 million
Total liabilities: $11 million

Shareholder's equity: $5 million

Income statement:
Revenue: $10 million
Cost of goods sold: $6 million
Operating expenses: $3 million
Net income: $1 million

Net profit margin – Expressed in Ratio

Calculate the given financial ratios in the subquestions based on the following information provided:

A company has the following financial statements:

Balance sheet:

Assets
Cash and cash equivalents: $8 million
Accounts receivable: $3 million
Inventory: $5 million
Total assets: $16 million

Liabilities
Accounts payable: $1 million
Short-term debt: $4 million
Long-term debt: $6 million
Total liabilities: $11 million

Shareholder's equity: $5 million

Income statement:
Revenue: $10 million
Cost of goods sold: $6 million
Operating expenses: $3 million
Net income: $1 million

Debt to Capitalization Ratio – Expressed in Ratio
**NOTE:**Round to two decimal places wherever necessary

Which of the following ratios can be considered when we are analysing the profitability of a company?

You have devised a 10 year retirement plan whereby you pay your subscribers 1000$ per annual for the first 5 years, and then 8000$ for the next 5 years. Assuming a discount rate of 6% for the first 5 years and 8% for the next 5 years, what should be the minimum price at which you have to sell the plan so that you don't incur any loss?
**NOTE:**Round to two decimal places wherever necessary

Suppose the risk free rate in the market is 5%, the expected market return is 7% and the beta of the stock is 1.2, at what rate the expected return of a stock changes with respect to the market premium?

Holmes, Inc., is a 90% equity and 10% debt financed firm. The unlevered beta is 0.60, the market risk premium is 6.67 percent, and the risk-free rate is 3.30 percent. What is the expected rate of return on this stock? Consider the tax rate as 30%. Express your answer as a fraction. **NOTE:**Round to two decimal places wherever necessary

A company has built a ML-Based Fraud detection system and was testing it out in the test environment. During the experiment that they conducted for 15 transactions the following was observed:

Based on the above table which of the following statement is correct (consider the positive class as Fraud and negative class as Non-Fraud).

The following are the number of payments attempts on a regular day that a fintech giant is seeing in its platform. You are hired as a data scientist to find the pattern in the payment attempts and you decide to perform a MLE with a gaussian distribution as an assumption. Which of these correctly represents the parameters of the normal distribution based on MLE for the given data: # Daily Payment Attempts = 100, 145, 120, 250, 124, 364, 124, 237, 365, 143

Which of the following is not True about using rules for Fraud Detection in the world of FinTech:

Which of the following statement(s) is/are correct about isolation forest:
I. Isolation Forest is a tree based algorithm, so it is a supervised learning model.
II. In Isolation Forest the data points that are easy to separate from the population are more likely to be anomalous.
III. Isolation Forest can be used only for fraud detection.
IV. Isolation Forest can be used only when the type of Fraud is known before building the ML system.

When we do anomaly detection, a Univariate Gaussian distribution is a good choice for representing two features that are positively correlated?

X is a characteristic of a time series in which the data experiences regular and predictable changes that recur at an irregular interval of time. What is X?

Given an AR(3) model with autoregressive coefficients of 0.6, 0.2 and -0.1 and initial values at t=0, t=1 and t=2 being 8, 10 and 12, respectively. Calculate the predicted value at t = 3.

Which of the following is/are example(s) of a autocorrelation process:

Which of the following can be solved by the differencing technique in time series analysis?

Considering the following data answer the subquestions:
The Hosmer Company had June sales of $275,000.
The cost of goods sold was $164,000
Other cash expenses were:
Rent $ 3,300
Taxes $ 1,375
Salaries $ 27,400
Other $ 50,240

What were the company Revenues?

Considering the following data answer the subquestions:
The Hosmer Company had June sales of $275,000.
The cost of goods sold was $164,000
Other cash expenses were:
Rent $ 3,300
Taxes $ 1,375
Salaries $ 27,400
Other $ 50,240

What were the company Expenses?

Considering the following data answer the subquestions:
The Hosmer Company had June sales of $275,000.
The cost of goods sold was $164,000
Other cash expenses were:
Rent $ 3,300
Taxes $ 1,375
Salaries $ 27,400
Other $ 50,240

What were the company Net income in June?

Prepare a balance sheet as of today by assigning the following entries to right headers (Asset, Liability/Equity, Income, Expense) for the J. L. Gregory Company, using the following data, and answer the subquestions

• Accounts payable $ 241,000
• Cash Balance $ 89,000
• Accounts receivable $ 505,000
• Equipment (at cost) $ 761,000
• Prepaid expenses $ 107,000
• Estimated tax liability $ 125,000.
• Buildings (at cost) $ 1,120,000
• Inventories $ 513,000
• Investment in the Peerless Company $ 320,000
• Land (at cost) $ 230,000
• Bonds payable $ 700,000
• Marketable securities $ 379,000
• Equity $ 1,000,000
• Accumulated depreciation on buildings $ 538,000
• Accumulated depreciation on equipment $ 386,000

The income in the income statement is? (Hint: Balance Sheet should Balance):

Prepare a balance sheet as of today by assigning the following entries to right headers (Asset, Liability/Equity, Income, Expense) for the J. L. Gregory Company, using the following data, and answer the subquestions

• Accounts payable $ 241,000
• Cash Balance $ 89,000
• Accounts receivable $ 505,000
• Equipment (at cost) $ 761,000
• Prepaid expenses $ 107,000
• Estimated tax liability $ 125,000.
• Buildings (at cost) $ 1,120,000
• Inventories $ 513,000
• Investment in the Peerless Company $ 320,000
• Land (at cost) $ 230,000
• Bonds payable $ 700,000
• Marketable securities $ 379,000
• Equity $ 1,000,000
• Accumulated depreciation on buildings $ 538,000
• Accumulated depreciation on equipment $ 386,000

As it is “The Balanced Sheet”, the Retained Earnings equal _____

D. Carson and F. Leggatt formed a partnership on June 1 to operate a shoe store. Carson contributed $50,000 cash and Leggatt contributed $50,000 worth of shoe inventory.
During the month of June, the following transactions took place:
1. Additional shoe inventory was purchased at a cost of $24,000 cash.
2. Total cash sales for the month were $31,000. The inventory that was sold had a cost of $15,500. 3. Carson withdrew $6,200 of cash drawings. Leggatt withdrew only $3,700 of cash drawings. 4. The partnership borrowed $50,000 from the Third National Bank.
5. Land and a building were purchased at a cash cost of $25,000 and $50,000,
Based on the given information answer the subquestions:

Cash inflow is ___ ?

D. Carson and F. Leggatt formed a partnership on June 1 to operate a shoe store. Carson contributed $50,000 cash and Leggatt contributed $50,000 worth of shoe inventory.
During the month of June, the following transactions took place:
1. Additional shoe inventory was purchased at a cost of $24,000 cash.
2. Total cash sales for the month were $31,000. The inventory that was sold had a cost of $15,500. 3. Carson withdrew $6,200 of cash drawings. Leggatt withdrew only $3,700 of cash drawings. 4. The partnership borrowed $50,000 from the Third National Bank.
5. Land and a building were purchased at a cash cost of $25,000 and $50,000,
Based on the given information answer the subquestions:

Cash outflow is ___?

D. Carson and F. Leggatt formed a partnership on June 1 to operate a shoe store. Carson contributed $50,000 cash and Leggatt contributed $50,000 worth of shoe inventory.
During the month of June, the following transactions took place:
1. Additional shoe inventory was purchased at a cost of $24,000 cash.
2. Total cash sales for the month were $31,000. The inventory that was sold had a cost of $15,500. 3. Carson withdrew $6,200 of cash drawings. Leggatt withdrew only $3,700 of cash drawings. 4. The partnership borrowed $50,000 from the Third National Bank.
5. Land and a building were purchased at a cash cost of $25,000 and $50,000,
Based on the given information answer the subquestions:

How much is the total profit/loss?

Which of the following represents a liability on a balance sheet?

What does the cash flow statement intend to do?

If cosine similarity between two string vectors is low, it means

You had converted two words to a vectors having following values:
A = [2,1,4,2,8]
B = [3,4,2,5,4]
The cosine similarity between them is:

What is the KS of the below table?

What is the capture rate of Positives at the top 15% from the below gains table?

What is the rollback rate for 90-119 DPD after 18 MOB?

“went” became “go”. This is an example of which of the following?

Input – The cats are playing in the garden, and one of them is chasing a butterfly.
Output – The cat be play in the garden, and one of them be chase a butterfly.
Which of the following pre-processing to input results in this output?

As given in the confusion matrix of the classifier in Table 1, a bank provides loan to 300 prospects from a database. Selection of an actual good customer leads to an average profit of ₹12,000. Due to misclassification, if a bad applicant is selected for loan, an average loss of ₹40,000 will be incurred. Based on the data given in the confusion matrix (Table 1), what is the additional profit bank could have earned by giving loans to declined good customers?

Table 1

Classification confusion matrix

What is the Shapley value conceptually based on in cooperative game theory?

In SHAP summary plots, what does the x-axis represent?

In the following waterfall plot , identify the model predicted value

Which of the following visualizations is commonly used to display SHAP values for a single prediction?

In SHAPley values, what does a negative value for a feature indicate?