CTP Formulas Exam with Questions and
Correct Answers Latest 2026
Earnings Credit - CORRECT ANSWERS-Avg Collected Balances × (1-Reserve
requirement) × Earnings Credit Rate(D÷365)
Avg collected balances required to pay service charges - CORRECT ANSWERS-Service
Charge / (ECR × (D÷365)*(1-Reserve Requirement))
Avg balance required - CORRECT ANSWERS-Service Charge / (ECR × (D/365))
Float Neutral Calculation - CORRECT ANSWERS-Discount = 1 - (1/(1+Total days
difference in payment timing × (Annualized Opportunity Cost/365))
Cost of Cash Discount - CORRECT ANSWERS-Discount Cost = (Discount
percentage/(100-Discount percentage)) × (365/(Net period - Discount period))
Cash Conversion Cycle - CORRECT ANSWERS-Inventory Days + Receivables Days -
Payables Days
Inventory Days - CORRECT ANSWERS-(Inventory / COGS) × 365
Receivables Days - CORRECT ANSWERS-(AR / Sales) × 365
Payables Days - CORRECT ANSWERS-(AP / COGS) × 365
Cash Turnover - CORRECT ANSWERS-365 / Cash Conversion Cycle
Days Sales Outstanding (DSO) - CORRECT ANSWERS-Outstanding AR ÷ Avg. Daily
Credit Sales
Avg. Daily Credit Sales - CORRECT ANSWERS-Sales During Period ÷ # of Days in Period
Avg. Past Due - CORRECT ANSWERS-DSO - Avg. Days of Credit Terms
, Future Value - CORRECT ANSWERS-Present value × (1 + periodic interest rate)ⁿ
Present Value - CORRECT ANSWERS-Future Value ÷ (1 + periodic interest rate)ⁿ
Breakeven Point - CORRECT ANSWERS-Fixed Costs ÷ (Selling Price per Unit - Variable
Cost per Unit)
Net Present Value (NPV) - CORRECT ANSWERS-PV of Cash Inflows - PV of Cash
Outflows
Profitability Index: Value gained per $ of investment - CORRECT ANSWERS-Present
Value of Cash Inflows ÷ Present Value of Cash Outflows
Internal Rate of Return (IRR) - CORRECT ANSWERS-PV of Cash Inflow - Cost = 0
Current Ratio: Degree to which current obligations are covered by current assets -
CORRECT ANSWERS-Total Current Assets ÷ Total Current Liabilities
Quick Ratio: Degree to which a company's current liabilities are covered by its most liquid
current assets - CORRECT ANSWERS-(Cash + Short-term Inv + AR) ÷ Total Current
Liabilities
Working Capital - CORRECT ANSWERS-Current Assets - Current Liabilities
Total Asset Turnover: # of times the asset base is turned over - CORRECT ANSWERS-
Revenues ÷ Total Assets
Fixed Asset Turnover: Efficiency of fixed asset usage - CORRECT ANSWERS-Revenues
÷ (Net Property, Plant, & Equipment)
Current Asset Turnover: # of times the stock of most liquid assets is turned over -
CORRECT ANSWERS-Revenues ÷ Current Assets
Cash Conversion Efficiency: Efficiency of sales to cash - CORRECT ANSWERS-Cash
Flow from Operations / Sales
Total Liabilities to Total Assets - CORRECT ANSWERS-Total Liabilities ÷ Total Assets
Correct Answers Latest 2026
Earnings Credit - CORRECT ANSWERS-Avg Collected Balances × (1-Reserve
requirement) × Earnings Credit Rate(D÷365)
Avg collected balances required to pay service charges - CORRECT ANSWERS-Service
Charge / (ECR × (D÷365)*(1-Reserve Requirement))
Avg balance required - CORRECT ANSWERS-Service Charge / (ECR × (D/365))
Float Neutral Calculation - CORRECT ANSWERS-Discount = 1 - (1/(1+Total days
difference in payment timing × (Annualized Opportunity Cost/365))
Cost of Cash Discount - CORRECT ANSWERS-Discount Cost = (Discount
percentage/(100-Discount percentage)) × (365/(Net period - Discount period))
Cash Conversion Cycle - CORRECT ANSWERS-Inventory Days + Receivables Days -
Payables Days
Inventory Days - CORRECT ANSWERS-(Inventory / COGS) × 365
Receivables Days - CORRECT ANSWERS-(AR / Sales) × 365
Payables Days - CORRECT ANSWERS-(AP / COGS) × 365
Cash Turnover - CORRECT ANSWERS-365 / Cash Conversion Cycle
Days Sales Outstanding (DSO) - CORRECT ANSWERS-Outstanding AR ÷ Avg. Daily
Credit Sales
Avg. Daily Credit Sales - CORRECT ANSWERS-Sales During Period ÷ # of Days in Period
Avg. Past Due - CORRECT ANSWERS-DSO - Avg. Days of Credit Terms
, Future Value - CORRECT ANSWERS-Present value × (1 + periodic interest rate)ⁿ
Present Value - CORRECT ANSWERS-Future Value ÷ (1 + periodic interest rate)ⁿ
Breakeven Point - CORRECT ANSWERS-Fixed Costs ÷ (Selling Price per Unit - Variable
Cost per Unit)
Net Present Value (NPV) - CORRECT ANSWERS-PV of Cash Inflows - PV of Cash
Outflows
Profitability Index: Value gained per $ of investment - CORRECT ANSWERS-Present
Value of Cash Inflows ÷ Present Value of Cash Outflows
Internal Rate of Return (IRR) - CORRECT ANSWERS-PV of Cash Inflow - Cost = 0
Current Ratio: Degree to which current obligations are covered by current assets -
CORRECT ANSWERS-Total Current Assets ÷ Total Current Liabilities
Quick Ratio: Degree to which a company's current liabilities are covered by its most liquid
current assets - CORRECT ANSWERS-(Cash + Short-term Inv + AR) ÷ Total Current
Liabilities
Working Capital - CORRECT ANSWERS-Current Assets - Current Liabilities
Total Asset Turnover: # of times the asset base is turned over - CORRECT ANSWERS-
Revenues ÷ Total Assets
Fixed Asset Turnover: Efficiency of fixed asset usage - CORRECT ANSWERS-Revenues
÷ (Net Property, Plant, & Equipment)
Current Asset Turnover: # of times the stock of most liquid assets is turned over -
CORRECT ANSWERS-Revenues ÷ Current Assets
Cash Conversion Efficiency: Efficiency of sales to cash - CORRECT ANSWERS-Cash
Flow from Operations / Sales
Total Liabilities to Total Assets - CORRECT ANSWERS-Total Liabilities ÷ Total Assets
