Certified Credit Analyst (Cca) Exam
Question And Correct Answers (Verified
Answers) Plus Rationales 2026 Q&A
Instant Download Pdf
1. The primary objective of credit analysis is to:
A. Maximize loan volume
B. Ensure regulatory compliance only
C. Assess borrower profitability
D. Evaluate the borrower’s ability and willingness to repay debt
Rationale: The core purpose of credit analysis is to assess both capacity
and intent to repay, minimizing default risk.
2. Which financial statement provides information about a company’s liquidity
at a point in time?
A. Income statement
B. Cash flow statement
C. Balance sheet
D. Statement of changes in equity
Rationale: The balance sheet shows assets, liabilities, and equity at a
specific date.
3. The current ratio is calculated as:
A. Current assets ÷ total assets
B. Current assets ÷ current liabilities
C. Total assets ÷ total liabilities
D. Cash ÷ current liabilities
Rationale: The current ratio measures short-term liquidity by comparing
current assets to current liabilities.
,4. A current ratio below 1.0 generally indicates:
A. Excess liquidity
B. High profitability
C. Potential short-term liquidity risk
D. Strong cash management
Rationale: A ratio below 1 suggests current liabilities exceed current
assets.
5. Which ratio best measures leverage?
A. Current ratio
B. Quick ratio
C. Gross margin
D. Debt-to-equity ratio
Rationale: Leverage ratios evaluate the extent of debt financing relative
to equity.
6. The quick ratio excludes:
A. Cash
B. Marketable securities
C. Accounts receivable
D. Inventory
Rationale: Inventory is excluded due to lower liquidity compared to other
current assets.
7. EBITDA is most useful for assessing:
A. Net profitability
B. Tax efficiency
C. Operating cash flow before financing and accounting effects
D. Shareholder returns
Rationale: EBITDA approximates operating cash flow excluding interest,
taxes, depreciation, and amortization.
8. Which cash flow is most relevant for debt repayment analysis?
A. Investing cash flow
B. Financing cash flow
, C. Operating cash flow
D. Free cash flow to equity
Rationale: Debt is primarily serviced from operating cash flows.
9. A high debt service coverage ratio (DSCR) indicates:
A. Weak repayment ability
B. Excess leverage
C. Strong capacity to service debt
D. Poor cash management
Rationale: A higher DSCR means more cash available relative to debt
obligations.
10.Credit risk refers to the risk of:
A. Market price fluctuations
B. Interest rate changes
C. Borrower default or non-payment
D. Currency depreciation
Rationale: Credit risk specifically relates to the possibility of borrower
default.
11.Which of the following is a qualitative credit factor?
A. Debt ratio
B. Cash flow coverage
C. Management quality
D. Current ratio
Rationale: Management quality is assessed subjectively rather than
numerically.
12.The “5 Cs of Credit” include all EXCEPT:
A. Character
B. Capacity
C. Capital
D. Currency
Rationale: The traditional 5 Cs are Character, Capacity, Capital, Collateral,
and Conditions.
Question And Correct Answers (Verified
Answers) Plus Rationales 2026 Q&A
Instant Download Pdf
1. The primary objective of credit analysis is to:
A. Maximize loan volume
B. Ensure regulatory compliance only
C. Assess borrower profitability
D. Evaluate the borrower’s ability and willingness to repay debt
Rationale: The core purpose of credit analysis is to assess both capacity
and intent to repay, minimizing default risk.
2. Which financial statement provides information about a company’s liquidity
at a point in time?
A. Income statement
B. Cash flow statement
C. Balance sheet
D. Statement of changes in equity
Rationale: The balance sheet shows assets, liabilities, and equity at a
specific date.
3. The current ratio is calculated as:
A. Current assets ÷ total assets
B. Current assets ÷ current liabilities
C. Total assets ÷ total liabilities
D. Cash ÷ current liabilities
Rationale: The current ratio measures short-term liquidity by comparing
current assets to current liabilities.
,4. A current ratio below 1.0 generally indicates:
A. Excess liquidity
B. High profitability
C. Potential short-term liquidity risk
D. Strong cash management
Rationale: A ratio below 1 suggests current liabilities exceed current
assets.
5. Which ratio best measures leverage?
A. Current ratio
B. Quick ratio
C. Gross margin
D. Debt-to-equity ratio
Rationale: Leverage ratios evaluate the extent of debt financing relative
to equity.
6. The quick ratio excludes:
A. Cash
B. Marketable securities
C. Accounts receivable
D. Inventory
Rationale: Inventory is excluded due to lower liquidity compared to other
current assets.
7. EBITDA is most useful for assessing:
A. Net profitability
B. Tax efficiency
C. Operating cash flow before financing and accounting effects
D. Shareholder returns
Rationale: EBITDA approximates operating cash flow excluding interest,
taxes, depreciation, and amortization.
8. Which cash flow is most relevant for debt repayment analysis?
A. Investing cash flow
B. Financing cash flow
, C. Operating cash flow
D. Free cash flow to equity
Rationale: Debt is primarily serviced from operating cash flows.
9. A high debt service coverage ratio (DSCR) indicates:
A. Weak repayment ability
B. Excess leverage
C. Strong capacity to service debt
D. Poor cash management
Rationale: A higher DSCR means more cash available relative to debt
obligations.
10.Credit risk refers to the risk of:
A. Market price fluctuations
B. Interest rate changes
C. Borrower default or non-payment
D. Currency depreciation
Rationale: Credit risk specifically relates to the possibility of borrower
default.
11.Which of the following is a qualitative credit factor?
A. Debt ratio
B. Cash flow coverage
C. Management quality
D. Current ratio
Rationale: Management quality is assessed subjectively rather than
numerically.
12.The “5 Cs of Credit” include all EXCEPT:
A. Character
B. Capacity
C. Capital
D. Currency
Rationale: The traditional 5 Cs are Character, Capacity, Capital, Collateral,
and Conditions.
