1|Page
CFI CBCA CORE COURSE ASSESSMENTS & QUIZZES | WITH
COMPLETE QUESTIONS AND ANSWERS | 2025/206 LATEST
UPDATED | 100 % RATED AND VERIFIED SOLUTIONS | GET
AN A+
What is the main goal of using business writing fundamentals? - (ANSWER)To reduce mental
effort
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.
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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
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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
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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
Commitments - (ANSWER)Future obligations that a company has agreed to
If a company issues 60,000 shares at $0.25 each but the shares have a par value of $0.20 each,
what is the resulting contributed surplus? - (ANSWER)$3,000
CFI CBCA CORE COURSE ASSESSMENTS & QUIZZES | WITH
COMPLETE QUESTIONS AND ANSWERS | 2025/206 LATEST
UPDATED | 100 % RATED AND VERIFIED SOLUTIONS | GET
AN A+
What is the main goal of using business writing fundamentals? - (ANSWER)To reduce mental
effort
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.
,2|Page
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
,3|Page
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
, 4|Page
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
Commitments - (ANSWER)Future obligations that a company has agreed to
If a company issues 60,000 shares at $0.25 each but the shares have a par value of $0.20 each,
what is the resulting contributed surplus? - (ANSWER)$3,000
