CFI CBCA CORE COMPREHENSIVE STUDY
GUIDE 2026 QUESTIONS AND SOLUTIONS
VERIFIED A+
◉ Which of the following statements describes a "Capacity" strength
or weakness for a company in the 5 Cs of credit framework?
Answer: 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?
Answer: 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?
Answer: 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?
Answer: High asset turnover ratio
,◉ Select the correct formula to calculate the operating margin ratio.
Answer: Operating Margin Ratio = EBIT / Revenue
◉ Select the correct formula to calculate the inventory turnover
ratio.
Answer: Inventory Turnover Ratio = Cost of Goods Sold / Average
Inventory
◉ Which of the following most likely indicates strong "Capital" for a
company?
Answer: Unutilized lines of credit or loans
◉ Which of the following statements on collateral is NOT correct?
Answer: 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?
Answer: PEST analysis
◉ Select the loan contract with the lowest risk.
Answer: A demand loan with monthly payments secured by assets
,◉ Which is not one of the three main financial statements?
Answer: Statement of equity
◉ What does the balance sheet indicate?
Answer: The financial strength of the business
◉ Financing activities
Answer: Issuing shares and bonds
◉ Operating activities
Answer: Payments to suppliers; Depreciation and amortization
expense
◉ Investing activities
Answer: Buying and selling equipment
◉ Which is not a section in the financial statement note disclosures?
Answer: Management discussion and analysis
◉ Balance Sheet
Answer: Retained earnings; Share captial
, ◉ Income Statement
Answer: Rent expense
◉ Cash Flow Statement
Answer: Sale of property, plant and equipment
◉ If a company has net assets equal to $3.25 million but is sold for
$5.35 million, how much goodwill does the acquirer record on their
balance sheet?
Answer: $2.1 million
◉ Intangible assets
Answer: Items of value, which have no physical substance, that are
used to generate revenues
◉ Authorized shares
Answer: The total number of shares a company can sell
◉ Contingencies
Answer: Events that may or may not happen, depending on certain
circumstances
GUIDE 2026 QUESTIONS AND SOLUTIONS
VERIFIED A+
◉ Which of the following statements describes a "Capacity" strength
or weakness for a company in the 5 Cs of credit framework?
Answer: 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?
Answer: 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?
Answer: 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?
Answer: High asset turnover ratio
,◉ Select the correct formula to calculate the operating margin ratio.
Answer: Operating Margin Ratio = EBIT / Revenue
◉ Select the correct formula to calculate the inventory turnover
ratio.
Answer: Inventory Turnover Ratio = Cost of Goods Sold / Average
Inventory
◉ Which of the following most likely indicates strong "Capital" for a
company?
Answer: Unutilized lines of credit or loans
◉ Which of the following statements on collateral is NOT correct?
Answer: 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?
Answer: PEST analysis
◉ Select the loan contract with the lowest risk.
Answer: A demand loan with monthly payments secured by assets
,◉ Which is not one of the three main financial statements?
Answer: Statement of equity
◉ What does the balance sheet indicate?
Answer: The financial strength of the business
◉ Financing activities
Answer: Issuing shares and bonds
◉ Operating activities
Answer: Payments to suppliers; Depreciation and amortization
expense
◉ Investing activities
Answer: Buying and selling equipment
◉ Which is not a section in the financial statement note disclosures?
Answer: Management discussion and analysis
◉ Balance Sheet
Answer: Retained earnings; Share captial
, ◉ Income Statement
Answer: Rent expense
◉ Cash Flow Statement
Answer: Sale of property, plant and equipment
◉ If a company has net assets equal to $3.25 million but is sold for
$5.35 million, how much goodwill does the acquirer record on their
balance sheet?
Answer: $2.1 million
◉ Intangible assets
Answer: Items of value, which have no physical substance, that are
used to generate revenues
◉ Authorized shares
Answer: The total number of shares a company can sell
◉ Contingencies
Answer: Events that may or may not happen, depending on certain
circumstances
