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CFI CBCA CORE COURSE ASSESSMENTS & QUIZZES
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What is the main goal of using business writing fundamentals? - CORRECT ANSWERS-To reduce mental effort Which of the following statements describes a "Capacity" strength or weakness for a company in the 5 Cs of credit framework? - CORRECT ANSWERS-The net profit margin ratio is high. Which of the following statements describes a "Condition" strength or weakness for a company in the 5 Cs of credit framework? - CORRECT ANSWERS-The risks associated with the industry are high. Which of the following scenarios would NOT be considered a strength when assessing the management team as part of evaluating a company's character? - CORRECT ANSWERS- Financial reports are not widely shared and performance measures have not been identified. Which of the following ratios most likely indicates strong "Capacity" for a company? - CORRECT ANSWERS-High asset turnover ratio Select the correct formula to calculate the operating margin ratio. - CORRECT ANSWERS-Operating Margin Ratio = EBIT / Revenue
Select the correct formula to calculate the inventory turnover ratio. - CORRECT ANSWERS-Inventory Turnover Ratio = Cost of Goods Sold / Average Inventory Which of the following most likely indicates strong "Capital" for a company? - CORRECT ANSWERS-Unutilized lines of credit or loans Which of the following statements on collateral is NOT correct? - CORRECT ANSWERS-Collateral can be used as the main determinant of a credit decision. Which of the following tools or methods is used to assess the general business environment? - CORRECT ANSWERS- PEST analysis Select the loan contract with the lowest risk. - CORRECT ANSWERS-A demand loan with monthly payments secured by assets Which is not one of the three main financial statements? - CORRECT ANSWERS-Statement of equity What does the balance sheet indicate? - CORRECT ANSWERS- The financial strength of the business Financing activities - CORRECT ANSWERS-Issuing shares and bonds
Authorized shares - CORRECT ANSWERS-The total number of shares a company can sell Contingencies - CORRECT ANSWERS-Events that may or may not happen, depending on certain circumstances Commitments - CORRECT ANSWERS-Future obligations that a company has agreed to If a company issues 60,000 shares at $0.25 each but the shares have a par value of $0.20 each, what is the resulting contributed surplus? - CORRECT ANSWERS-$3, What line item is not found in the statement of shareholders' equity? - CORRECT ANSWERS-Debt issued or repurchased What is not true about a partnership? - CORRECT ANSWERS- Partners cannot be held liable for a debt Which line item usually accounts for direct labor? - CORRECT ANSWERS-Cost of goods sold Select the statements below which are true. Select all that apply. - CORRECT ANSWERS-Depreciation and amortization are non-cash expenses; A company can be profitable but experience negative cash flows
What are the 4 types of audit opinions? - CORRECT ANSWERS- Adverse, unqualified, qualified, and disclaimer of opinion Which of the following statements regarding a review engagement is false? - CORRECT ANSWERS-A review engagement is used for financial statements prepared for internal use Select the following key lending ratios used to evaluate the financial capacity of a business (select all that apply). - CORRECT ANSWERS-Debt to equity ratio; Working capital ratio Which of the following tools is NOT used to analyze a company? - CORRECT ANSWERS-Porter's five forces Which of the following tools are used to analyze a company? - CORRECT ANSWERS-Firm lifecycle, Ansoff's matrix, SWOT analysis In assessing the PESTEL factors, consumer disposable income is an example of: - CORRECT ANSWERS-Economic factors Read the following passage and determine which of the PESTEL factors the described business is facing: Fresh and Co. is a local grocery store operating in a small town in Seattle since 2010. The store sells fresh vegetables, fruits, meat, dairy, and other packaged products. In recent years, people in the neighborhood
According to the growth/share matrix, companies at maturity have: - CORRECT ANSWERS-Low market growth and high market share At which stage of the firm lifecycle would a company most likely have high business risk, low financial risk, and generate neutral net cash flow? - CORRECT ANSWERS-Growth Read the following passage and determine which of the following strategies the business uses in creating solid relationship with its customers. Innovation Co. is an international smartphone manufacturer which currently holds more than 15% of global smartphone market share. One of the superior product features it offers (seamless integration with any smart devices including televisions, smart home electronics, and home assistance) is the selling point of the company's latest smartphone series, creating a huge competitive advantage over its competitors. This premium feature also allows Innovation Co. to charge an above- average price while maintaining a loyal customer base. - CORRECT ANSWERS-Best product Which of the following strategies describes a company's attempt to enter into new markets with its existing products? - CORRECT ANSWERS-Market development Which of the following strategies describes a company's attempt to enter into new markets with new products? - CORRECT ANSWERS-Diversification
According to the course, which is the most important section of the business plan? - CORRECT ANSWERS-Executive Summary In which section of a business plan can you find the name of the company's lawyer? Select the best answer. - CORRECT ANSWERS-Company Description Which SMART component is the following goal missing? In 2020, Company ABC's Canadian operations generated $90M of revenue, and in 2021 the Canadian operations generated $98M of revenue. Their goal is to achieve $100M of revenue in their Canadian operations in the near future. - CORRECT ANSWERS-Timely Where would you most likely find information regarding the hierarchical or flat structure of the organization? Select the best answer. - CORRECT ANSWERS-Management and Operations What is a benefit of having a small number of suppliers for a company's products? - CORRECT ANSWERS-Better relationship which can result in better repayment terms Which risks may be associated with the location of a firm's operations? Select all that apply. - CORRECT ANSWERS- Regulatory risk, Foreign exchange risk, Geo-political risk Company XYZ sells women's running shoes in two U.S. states. Which option would be considered their SAM
Which is not an example of a strategy scorecard measure?
- CORRECT ANSWERS-Sales growth Which is not a questioning skill used to gather more information? - CORRECT ANSWERS-Using straightforward yes/no questions Which type of attitude is specific to management looking into a strategy if the firm's largest customers stopped purchasing from the firm tomorrow? - CORRECT ANSWERS- Attitude to business risk According to the study conducted on internal barriers to growth, which was the least important factor out of this list? - CORRECT ANSWERS-Lack of successful innovation If a company has an aim to grow and plans to exit by sale of the business or flotation, what type of ownership style is this? - CORRECT ANSWERS-Business-oriented What level of strategy would focus on market positioning strategies to gain a competitive advantage? - CORRECT ANSWERS-Business-level Which of the following is an example of a strategy? - CORRECT ANSWERS-Create a promotional offer to increase the sale of food products Which components should be analyzed when assessing the track record of a company? Select all that apply. - CORRECT
ANSWERS-Previous statements, Budget vs. actual, Historic promotional success What is the difference between budget and actual performance called? - CORRECT ANSWERS-Budget variance Which of the following activities impacts the long-term cash flow? - CORRECT ANSWERS-Purchase PP&E Which of the following strategies is most likely to shorten the working capital funding gap? - CORRECT ANSWERS- Extend payments to suppliers Calculate accounts receivable days based on the information below: Revenues: 2,500, Costs of goods sold: 1,600, Days in period: 365 Receivables: 300, Inventories: 150, Payables: 200,000 - CORRECT ANSWERS-43.8 = (AR/Revenue)*Number of days in year What's the company's working capital funding gap in days based on the information below? Receivable days: 47. Inventory days: 34. Payable days: 45.
2023 Cash Flows $ 2024 Cash Flows $ 2025 Cash Flows $900 - CORRECT ANSWERS-ROI = 25% = 2025 Cum. Cash Flows / Minimum Cum. Cash Flows Calculate the net cash provided by the operating activities based on the information below: Net income: 60, Depreciation: 25, Increase in accounts receivable: 12, Increase in inventory: 8, Increase in accounts payable: 15,000 - CORRECT ANSWERS- 80,000 = Net Income + Depreciation - Increase in accounts receivable - Increase in inventory + Increase in accounts payable Calculate the total capital expenditure of 2018 based on the information below: 2017 PP&E: 43, 2018 PP&E: 65, 2017 Depreciation: 10, 2018 Depreciation: 12,000 - CORRECT ANSWERS-= 34,000 = 2018 PP&E - 2017 PP&E + 2018 Depreciation Calculate the company's free cash flow for the current year based on the information below: Net income: 60, Depreciation: 25,
Increase in accounts receivable: 12, Increase in inventory: 8, Increase in accounts payable: 15, Capital expenditures: 45, Increase in long-term debt: 15,000 - CORRECT ANSWERS-Cash from Operations = Net income + Depreciation - Increase in accounts receivable - Increase in inventory + Increase in accounts payable = 80, Free cash flow = Cash from Operations - Capital Expenditures Free cash flow = 35, What is the starting point when conducting a financial analysis of the performance of a company? - CORRECT ANSWERS-Review of company financial statements With an end goal in mind, what is the purpose for a credit analyst or commercial banking professional completing a financial analysis? - CORRECT ANSWERS-To understand a company's overall financial health and credit risk. Which of the following is not a part of completing a vertical analysis? - CORRECT ANSWERS-Comparison of line items between the balance sheet and income statement Which of the following is a part of completing a vertical analysis? - CORRECT ANSWERS-Comparing line items in a
it has never been fully utilized in the past; A credit professional will always use figures based on a fully drawn operating line When a credit analyst is reviewing a borrowing request, it can get complex when multiple credit facilities are involved. Why is a sources and uses of funds table important for an analyst when reviewing the request? Select ALL that apply.. - CORRECT ANSWERS-It will allow for a lender's adjudication team to evaluate the borrowing request more clearly; It will permit clearer discussions with the borrower's management team around the borrowing request For owner-operated borrowers, which of the following statements is true with respect to understanding management compensation when calculating debt service coverage? - CORRECT ANSWERS-The analyst must adjust EBITDA for any drawings considered "non-discretionary". Removing these dividends will reduce the debt service coverage ratio. Given the table below, calculate the annual debt service obligation using the PMT function in Microsoft Excel: Loan Amount $75, Interest Rate 4.75% Periods (Term in Years) 6 Compounding Periods per Year 1 Monthly Payment? - CORRECT ANSWERS-= $14,658.
What would a low AR days number, compared to the industry, mean for a company? - CORRECT ANSWERS- Receivables are being collected efficiently, and customers are paying their debts quickly. Which of the following statements are true when completing a horizontal analysis? - CORRECT ANSWERS- Horizontal analysis is usually performed after vertical analysis. This analysis can be used to better project future performance and solvency. Analysis can reveal things such as consistent records of sales, or profitability growth. Which of the following statements are true when completing a horizontal analysis? Select ALL that apply. - CORRECT ANSWERS-Protect inputs by locking input cells Complex financial models are all of the following EXCEPT: - CORRECT ANSWERS-They are easy to follow and audit Forecast the 2019 Cost of goods sold on the previous year's number and the assumptions 2018 Actual Sales Growth 6% Gross Margin 40% Revenues 50, Cost of Goods Sold 30,
Increase in payables: 60 - CORRECT ANSWERS-= 490 = Net income + Depreciation - Increase in receivables - Increase in inventory + Increase in payables Calculate the end of the year cash balance based on the information below: Beginning of the year cash balance: 2, Net income: 300 Depreciation: 140 Increase in accounts payable: 60 Acquisitions of PP&E: 580 Dividends paid in the current year: 130 Increase in long-term debt: 200 - CORRECT ANSWERS-= 1, Which Excel function or tool will you use to display the cells that are referred to by a formula in the selected cell?
- CORRECT ANSWERS-Trace Precedents What is the forecasted value of property, plan and equipment (PP&E) based on the following information: Capital asset turnover ratio: 2. Forecasted revenues: $ Forecasted costs of goods sold: $80 - CORRECT ANSWERS-= 48 Capital asset turnover ration = Revenue / PP&E (Average)
What is the impact on cash flow from operations in the current year based on the change in operating assets and liabilities listed below? Prior Year Accounts receivable 1, Inventories 1, Accounts payable 1, Current Year Accounts receivable 1, Inventories 1, Accounts payable 1,475 - CORRECT ANSWERS-= - What's the forecasted capital expenditure based on the information below? Net PP&E beginning of period: 15, Net PP&E end of period: 17, Depreciation expenses: 2,400 - CORRECT ANSWERS-= 4,900 = Net PP&E end of period - Net PP&E beginning of period + Depreciation expenses What's the retained earnings end of period based on the information below? Retained earnings beginning of period: 7, Net income: 2, Dividends paid: 1,700 - CORRECT ANSWERS-= 8,100 = Retained earnings beginning of period + Net income - Dividends paid
