CFI CBCA CORE CERTIFICATION ACTUAL
PAPER 2026 QUESTIONS WITH SOLUTIONS
GRADED A+
◉ Account Monitoring and Warning Signs
Identify Early Warning Signs
Course Objectives
Answer: -Identify common warning signs that a company has
financial difficulties
-Apply quantitative models to predict if companies will run into
financial difficulty
-Understand how to deal with problem accounts
◉ Identifying Warning Signs
Session Objectives
Answer: -Identify common warning signs that a company has
financial difficulties
- Understand symptoms and causes of corporate decline
◉ Annual Credit Review Process
,An annual review is typically performed using the following
components:
Answer: 1. Financial Statement Review
• Comparative analysis
• Working capital analysis
• Cash flow analysis
• Financial covenant analysis
2. Security Review
• Account receivables
• Inventory
• Equipment
• Real estate
• Personal guarantees & covenants
3. Management Review
• Change in management structure
• Decision making abilities
• Budget & results monitoring
4. Business Review
• Opportunities
, • Threat
• Capacity
◉ Identify Warning Signs
Root Causes and Impact
Answer: Root Causes
• Low staff morale and poor working conditions
• Loss of a key customer
• Weak credit controls
Impact
• Increasing staff turnover
• Declining sales and profitability
• Increasing accounts receivable and bad debt
write-offs
◉ The most common warning signs are deteriorating financial and
non-financial indicators:
Answer: financial indicators:
-Declining profitability (look for changes in operating profits and
profit margins)
PAPER 2026 QUESTIONS WITH SOLUTIONS
GRADED A+
◉ Account Monitoring and Warning Signs
Identify Early Warning Signs
Course Objectives
Answer: -Identify common warning signs that a company has
financial difficulties
-Apply quantitative models to predict if companies will run into
financial difficulty
-Understand how to deal with problem accounts
◉ Identifying Warning Signs
Session Objectives
Answer: -Identify common warning signs that a company has
financial difficulties
- Understand symptoms and causes of corporate decline
◉ Annual Credit Review Process
,An annual review is typically performed using the following
components:
Answer: 1. Financial Statement Review
• Comparative analysis
• Working capital analysis
• Cash flow analysis
• Financial covenant analysis
2. Security Review
• Account receivables
• Inventory
• Equipment
• Real estate
• Personal guarantees & covenants
3. Management Review
• Change in management structure
• Decision making abilities
• Budget & results monitoring
4. Business Review
• Opportunities
, • Threat
• Capacity
◉ Identify Warning Signs
Root Causes and Impact
Answer: Root Causes
• Low staff morale and poor working conditions
• Loss of a key customer
• Weak credit controls
Impact
• Increasing staff turnover
• Declining sales and profitability
• Increasing accounts receivable and bad debt
write-offs
◉ The most common warning signs are deteriorating financial and
non-financial indicators:
Answer: financial indicators:
-Declining profitability (look for changes in operating profits and
profit margins)
