CFI FMVA EXAM A+ GRADE ASSURED COMPLETE SOLUTIONS AND VERIFIED ANSWERS

EXAM

Exam Solution
ms




FMVA (CFI) 2026 A+ GRADE ASSURED COMPLETE SOLU
ms ms ms ms ms ms ms




TIONS AND VERIFIED ANSWERS (6E7B7) ms ms ms ms




QUESTION 1 ms




Net profit margin
ms ms




ANSWER

shows how much is earned for every dollar of sales revenue. Net profit margin = Net income / Sale
ms ms ms ms ms ms ms ms ms ms ms ms ms ms ms ms ms ms



s



QUESTION 2 ms




Tax ratio ms




ANSWER

shows how well management manages tax. (Efficiency ratio) Tax ratio = Tax expense / Pre-
ms ms ms ms ms ms ms ms ms ms ms ms ms ms



tax income
ms




QUESTION 3 ms




Interest Coverage Ratioms ms




ANSWER

shows how much income is available to service debt costs. (Leverage ratio) Interest coverage ratio =
ms ms ms ms ms ms ms ms ms ms ms ms ms ms ms



EBIT(DA) / Interest expenses
ms ms ms ms




QUESTION 4 ms




Current Ratio ms




ANSWER

measures the ability of a company to cover its obligations in the short term. (Liquidity ratio) Curren
ms ms ms ms ms ms ms ms ms ms ms ms ms ms ms ms



t ratio = Current assets / Current liabilities
ms ms ms ms ms ms ms

, QUESTION 5 ms




Quick ratio / acid test ratio
ms ms ms ms ms




ANSWER

provides a more prudent measure of short-
ms ms ms ms ms ms



term liquidity recognizing that the inventory cannot always be readily converted into cash. (Liquidity
ms ms ms ms ms ms ms ms ms ms ms ms ms



ratio) Quick ratio = (Current assets - Inventory) / Current liabilities
ms ms ms ms ms ms ms ms ms ms ms




QUESTION 6 ms




Asset turnover ratio ms ms




ANSWER

hows how effective the company is in generating sales from its assets. (Efficiency ratio) Asset turnov
ms ms ms ms ms ms ms ms ms ms ms ms ms ms ms



er ratio = Sales / Total (or net) assets
ms ms ms ms ms ms ms ms




QUESTION 7 ms




Inventory turnover ratio ms ms




ANSWER

shows how quickly a company sells its inventory. (Efficiency ratio) Inventory turnover ratio = Cost o
ms ms ms ms ms ms ms ms ms ms ms ms ms ms ms



f sales / Inventory
ms ms ms




QUESTION 8 ms




Inventory days ratio ms ms




ANSWER

ndicates the average number of days goods remain in inventory before being sold. (Efficiency ratio)
ms ms ms ms ms ms ms ms ms ms ms ms ms ms ms



Inventory days ratio = (Inventory x 365) / Cost of sales
ms ms ms ms ms ms ms ms ms ms




QUESTION 9 ms




Accounts receivable turnover ratio ms ms ms




ANSWER

measures how effective the company's credit policies are. (Efficiency ratio) Accounts receivable turno
ms ms ms ms ms ms ms ms ms ms ms ms



ver ratio = Sales / Accounts receivable
ms ms ms ms ms ms




QUESTION 10 ms