CEPA (CERTIFIED EXIT PLANNING ADVISOR) EXAM PREP 2024
QUESTIONS WITH 100% CORRECT ANSWERS!!!
1. What is the calculation for Recasted EBITDA?(ANSWER) Addbacks + EBITDA = Recast- ed EBITDA
2. What does EBITDA stand for?(ANSWER) Earnings Before Interest, Taxes, Depreciation, & !@#$%^&*()
Amortization
_+
3. What are the three gaps within the Value Acceleration Methodology?(ANSWER) Wealth Gap, Value Gap, & Profit Gap
4. What are the Five Stages of Value Maturity in order?(ANSWER) Identify, Protect, Build, Harvest, Manage
5. In the Five Stages of Value Maturity, what occurs in the "Identify" stage?-
(ANSWER) Identify and asses the business value. Understand how ready and attractive the business is. What is the current
value? What is it's potential value? What are the gaps?
6. What are considered the "Value Creation" stages within the Five Stages of Value Maturity?(ANSWER) Protect Value
and Build Value
7. In the Five Stages of Value Maturity, what occurs in the "Protect" stage?-
(ANSWER) Protect what you have because "build" means more risk. Make sure the right systems are in place: the right
financial advisor, right financial plan, documented standard operating procedures within the business, insurance, etc. Prote
always comes before Build. Non-strategic actions are ALWAYS before strategic actions.
8. In the Five Stages of Value Maturity, what occurs in the "Build" stage?(ANSWER) This is made up of strategic actions
including culture building, communication building, personnel changes, new products/improvements, etc.
9. In the Five Stages of Value Maturity, what occurs in the "Harvest" stage?(ANSWER) -
This is when the owner exits the company and harvests its value
10. Simply put, what is exit planning?(ANSWER) Good Business strategy
11. What are the Four intangible Capitals or "Four C's"?(ANSWER) Human Capital, Struc- tural Capital, Customer
Capital, & Social Capital
12. How much of a business' value (in percentage) is trapped inside the four intangible capitals or "Four
C's"?(ANSWER) 80%
13. What is Human Capital?(ANSWER) It's the people in the business. Employee tenure, experience / talent level,
management team succession plan, management team strength, etc.
14. What is Structural Capital?(ANSWER) The most robust of the "Four C's", this includes everything from the real
estate, intellectual property, equipment, process & docu- mentation, IT, systems (including financial & accounting
systems), etc.
15. What is Customer Captial?(ANSWER) Depth of customer relationships, customer entan- glement, customer
concentration / diversification, contracts, etc.
,16. What is Social Capital?(ANSWER) Culture within & outside the company. How people relate outside of the
company. This is developed over time after all other intangible capitals are established/improved.
17. What are the three gates (in order) of the Value Acceleration Methodolo- gy?(ANSWER) Discover, Prepare, &
Decide
18. What are the Three Legs of the Stool?(ANSWER) Business, Financial, & Personal
19. What is the Wealth Gap?(ANSWER) Understanding the owner's wealth goal (how much money they'll need to fulfill
personal needs) and the current value of their assets (not including their business). The gap or difference between these two
is usually filled by the business' value.
20. What is the Value Gap?(ANSWER) The difference between the owner's current business value and the Best-In-Class
business value.
21. What is the Profit Gap?(ANSWER) The difference between the owner's current business profit (or recasted
EBITDA) and the Best-In-Class business profit (or recasted EBITDA)
22. The two concurrent paths are in which gate within the Value Acceleration Methodology?(ANSWER) The Prepare
Gate
23. What are the two concurrent paths within the Prepare Gate?(ANSWER) The risk mitigation (De-risk) /
business improvement path
AND
The personal/financial ("Vision") path
24. What is the ONE goal of the Value Acceleration Methodology?(ANSWER) To drive value across all three legs
of the stool (business, financial & personal)
25. How much of an owner's wealth (in percentage) is locked in their busi- ness?(ANSWER) 80-90%
26. What's the difference between a Lifestyle Business and Value Creator Business?(ANSWER) Lifestyle
business = good income; not transferrable
Value creator business = good income; transferable (owners treat their business like an asset)
27. Most owners don't address what kind of planning?(ANSWER) personal planning
28. What kind of planning could be the key to making an exit successful?(ANSWER) per- sonal planning
29. What is the number one reason deals fail?(ANSWER) seller's cold feet
30. The Value Maturity Index teaches owner's the concept that they can have
, and .(ANSWER) value AND income (as long as the owner focuses
on VALUE first)
, 31. What is the formula to calculate value?(ANSWER) Cash (Recasted EBITDA) x MM (market multiple) =
Value
Sales X MM (market multiple) = Value
32. Every business trades in a .(ANSWER) range of value
33. Value Acceleration focuses on work-
ing with while improving
.(ANSWER) accounting systems; intangible assets
34. Why is vision important?(ANSWER) Vison is needed to execute well, and it must come from the owner / owner's
family
35. What is Alignment?(ANSWER) When the owner aligns his/her resources including family, staff, Advisors, etc.
36. Which of the Five Stages of Value Maturity are in the Discover Gate?(ANSWER) Iden- tify
37. Which of the Five Stages of Value Maturity are in the Prepare Gate?(ANSWER) Protect and Build
38. Which of the Five Stages of Value Maturity are in the Decide Gate?(ANSWER) Harvest
39. What is the definition of a Triggering Event?(ANSWER) A business valuation correlated to a personal, financial, and
business attractiveness and readiness assessment to determine where the business value lands in the range of value
40. What is the definition of Exit Planning?(ANSWER) Exit Planning combines the plan, concept, effort, and process
into a clear, simple strategy to build a business that is transferable through strong human, structural, customer, and
social capital. The
future of you, your family, and your business are addressed by exit planning through creating value today.
41. Who determines the multiple range of a company?(ANSWER) The private capital market, but company's can
control where they place in that range depending on the strength of their intangibles. Value acceleration occurs by managing
the controllable factors (intangibles) within the company's multiple.
42. What're the scoring metrics for the Common Sense Scoring Scale?(ANSWER) 1) Weak - haven't thought about
it
2) Have thought about it but they don't have anything
3) Below average
4) Above average
QUESTIONS WITH 100% CORRECT ANSWERS!!!
1. What is the calculation for Recasted EBITDA?(ANSWER) Addbacks + EBITDA = Recast- ed EBITDA
2. What does EBITDA stand for?(ANSWER) Earnings Before Interest, Taxes, Depreciation, & !@#$%^&*()
Amortization
_+
3. What are the three gaps within the Value Acceleration Methodology?(ANSWER) Wealth Gap, Value Gap, & Profit Gap
4. What are the Five Stages of Value Maturity in order?(ANSWER) Identify, Protect, Build, Harvest, Manage
5. In the Five Stages of Value Maturity, what occurs in the "Identify" stage?-
(ANSWER) Identify and asses the business value. Understand how ready and attractive the business is. What is the current
value? What is it's potential value? What are the gaps?
6. What are considered the "Value Creation" stages within the Five Stages of Value Maturity?(ANSWER) Protect Value
and Build Value
7. In the Five Stages of Value Maturity, what occurs in the "Protect" stage?-
(ANSWER) Protect what you have because "build" means more risk. Make sure the right systems are in place: the right
financial advisor, right financial plan, documented standard operating procedures within the business, insurance, etc. Prote
always comes before Build. Non-strategic actions are ALWAYS before strategic actions.
8. In the Five Stages of Value Maturity, what occurs in the "Build" stage?(ANSWER) This is made up of strategic actions
including culture building, communication building, personnel changes, new products/improvements, etc.
9. In the Five Stages of Value Maturity, what occurs in the "Harvest" stage?(ANSWER) -
This is when the owner exits the company and harvests its value
10. Simply put, what is exit planning?(ANSWER) Good Business strategy
11. What are the Four intangible Capitals or "Four C's"?(ANSWER) Human Capital, Struc- tural Capital, Customer
Capital, & Social Capital
12. How much of a business' value (in percentage) is trapped inside the four intangible capitals or "Four
C's"?(ANSWER) 80%
13. What is Human Capital?(ANSWER) It's the people in the business. Employee tenure, experience / talent level,
management team succession plan, management team strength, etc.
14. What is Structural Capital?(ANSWER) The most robust of the "Four C's", this includes everything from the real
estate, intellectual property, equipment, process & docu- mentation, IT, systems (including financial & accounting
systems), etc.
15. What is Customer Captial?(ANSWER) Depth of customer relationships, customer entan- glement, customer
concentration / diversification, contracts, etc.
,16. What is Social Capital?(ANSWER) Culture within & outside the company. How people relate outside of the
company. This is developed over time after all other intangible capitals are established/improved.
17. What are the three gates (in order) of the Value Acceleration Methodolo- gy?(ANSWER) Discover, Prepare, &
Decide
18. What are the Three Legs of the Stool?(ANSWER) Business, Financial, & Personal
19. What is the Wealth Gap?(ANSWER) Understanding the owner's wealth goal (how much money they'll need to fulfill
personal needs) and the current value of their assets (not including their business). The gap or difference between these two
is usually filled by the business' value.
20. What is the Value Gap?(ANSWER) The difference between the owner's current business value and the Best-In-Class
business value.
21. What is the Profit Gap?(ANSWER) The difference between the owner's current business profit (or recasted
EBITDA) and the Best-In-Class business profit (or recasted EBITDA)
22. The two concurrent paths are in which gate within the Value Acceleration Methodology?(ANSWER) The Prepare
Gate
23. What are the two concurrent paths within the Prepare Gate?(ANSWER) The risk mitigation (De-risk) /
business improvement path
AND
The personal/financial ("Vision") path
24. What is the ONE goal of the Value Acceleration Methodology?(ANSWER) To drive value across all three legs
of the stool (business, financial & personal)
25. How much of an owner's wealth (in percentage) is locked in their busi- ness?(ANSWER) 80-90%
26. What's the difference between a Lifestyle Business and Value Creator Business?(ANSWER) Lifestyle
business = good income; not transferrable
Value creator business = good income; transferable (owners treat their business like an asset)
27. Most owners don't address what kind of planning?(ANSWER) personal planning
28. What kind of planning could be the key to making an exit successful?(ANSWER) per- sonal planning
29. What is the number one reason deals fail?(ANSWER) seller's cold feet
30. The Value Maturity Index teaches owner's the concept that they can have
, and .(ANSWER) value AND income (as long as the owner focuses
on VALUE first)
, 31. What is the formula to calculate value?(ANSWER) Cash (Recasted EBITDA) x MM (market multiple) =
Value
Sales X MM (market multiple) = Value
32. Every business trades in a .(ANSWER) range of value
33. Value Acceleration focuses on work-
ing with while improving
.(ANSWER) accounting systems; intangible assets
34. Why is vision important?(ANSWER) Vison is needed to execute well, and it must come from the owner / owner's
family
35. What is Alignment?(ANSWER) When the owner aligns his/her resources including family, staff, Advisors, etc.
36. Which of the Five Stages of Value Maturity are in the Discover Gate?(ANSWER) Iden- tify
37. Which of the Five Stages of Value Maturity are in the Prepare Gate?(ANSWER) Protect and Build
38. Which of the Five Stages of Value Maturity are in the Decide Gate?(ANSWER) Harvest
39. What is the definition of a Triggering Event?(ANSWER) A business valuation correlated to a personal, financial, and
business attractiveness and readiness assessment to determine where the business value lands in the range of value
40. What is the definition of Exit Planning?(ANSWER) Exit Planning combines the plan, concept, effort, and process
into a clear, simple strategy to build a business that is transferable through strong human, structural, customer, and
social capital. The
future of you, your family, and your business are addressed by exit planning through creating value today.
41. Who determines the multiple range of a company?(ANSWER) The private capital market, but company's can
control where they place in that range depending on the strength of their intangibles. Value acceleration occurs by managing
the controllable factors (intangibles) within the company's multiple.
42. What're the scoring metrics for the Common Sense Scoring Scale?(ANSWER) 1) Weak - haven't thought about
it
2) Have thought about it but they don't have anything
3) Below average
4) Above average
