CERTIFIED COMMERCIAL CREDIT
PROFESSIONAL (CCCP) QUESTION AND
CORRECT ANSWERS (VERIFIED
ANSWERS) PLUS RATIONALES 2026 Q&A
INSTANT DOWNLOAD PDF
1. The primary objective of commercial credit analysis is to
A. Increase sales volume
B. Assess the borrower’s ability and willingness to repay
C. Reduce operating costs
D. Improve marketing strategy
Rationale: Credit analysis focuses on evaluating repayment capacity and
creditworthiness, not sales or marketing goals.
2. Which financial statement shows a company’s financial position at a specific
point in time?
A. Income statement
B. Cash flow statement
C. Balance sheet
D. Statement of retained earnings
Rationale: The balance sheet provides a snapshot of assets, liabilities, and
equity at a given date.
3. Net working capital is calculated as
A. Total assets minus total liabilities
B. Current assets minus current liabilities
, C. Cash plus receivables
D. Equity minus fixed assets
Rationale: Net working capital measures short-term liquidity using current
assets and liabilities.
4. Which ratio best measures short-term liquidity?
A. Debt-to-equity ratio
B. Current ratio
C. Gross margin
D. Return on assets
Rationale: The current ratio directly compares current assets to current
liabilities.
5. A current ratio below 1.0 generally indicates
A. Excess liquidity
B. Potential liquidity risk
C. Strong profitability
D. Low leverage
Rationale: A ratio below 1.0 suggests current liabilities exceed current assets.
6. The quick ratio excludes
A. Cash
B. Marketable securities
C. Inventory
D. Accounts receivable
Rationale: Inventory is excluded because it may not be quickly converted to cash.
7. Which ratio measures leverage?
A. Inventory turnover
B. Debt-to-equity
C. Current ratio
D. Gross profit margin
, Rationale: Debt-to-equity evaluates the extent of debt financing relative to
equity.
8. A higher debt-to-equity ratio generally means
A. Lower financial risk
B. Higher financial risk
C. Stronger liquidity
D. Better cash flow
Rationale: Increased leverage raises financial risk due to higher debt obligations.
9. Gross profit margin is calculated as
A. Net income ÷ sales
B. Gross profit ÷ sales
C. Operating income ÷ assets
D. Sales ÷ cost of goods sold
Rationale: Gross margin measures profitability after direct production costs.
10.Which statement best reflects the “5 Cs of Credit”?
A. Cost, Control, Capital, Cash, Credit
B. Character, Capacity, Capital, Collateral, Conditions
C. Credit, Collateral, Cash, Cost, Control
D. Capacity, Cost, Capital, Control, Character
Rationale: The traditional framework includes Character, Capacity, Capital,
Collateral, and Conditions.
11.Character in credit analysis refers primarily to
A. Borrower’s net worth
B. Borrower’s integrity and repayment history
C. Industry conditions
D. Collateral value
Rationale: Character evaluates management integrity and historical payment
behavior.
PROFESSIONAL (CCCP) QUESTION AND
CORRECT ANSWERS (VERIFIED
ANSWERS) PLUS RATIONALES 2026 Q&A
INSTANT DOWNLOAD PDF
1. The primary objective of commercial credit analysis is to
A. Increase sales volume
B. Assess the borrower’s ability and willingness to repay
C. Reduce operating costs
D. Improve marketing strategy
Rationale: Credit analysis focuses on evaluating repayment capacity and
creditworthiness, not sales or marketing goals.
2. Which financial statement shows a company’s financial position at a specific
point in time?
A. Income statement
B. Cash flow statement
C. Balance sheet
D. Statement of retained earnings
Rationale: The balance sheet provides a snapshot of assets, liabilities, and
equity at a given date.
3. Net working capital is calculated as
A. Total assets minus total liabilities
B. Current assets minus current liabilities
, C. Cash plus receivables
D. Equity minus fixed assets
Rationale: Net working capital measures short-term liquidity using current
assets and liabilities.
4. Which ratio best measures short-term liquidity?
A. Debt-to-equity ratio
B. Current ratio
C. Gross margin
D. Return on assets
Rationale: The current ratio directly compares current assets to current
liabilities.
5. A current ratio below 1.0 generally indicates
A. Excess liquidity
B. Potential liquidity risk
C. Strong profitability
D. Low leverage
Rationale: A ratio below 1.0 suggests current liabilities exceed current assets.
6. The quick ratio excludes
A. Cash
B. Marketable securities
C. Inventory
D. Accounts receivable
Rationale: Inventory is excluded because it may not be quickly converted to cash.
7. Which ratio measures leverage?
A. Inventory turnover
B. Debt-to-equity
C. Current ratio
D. Gross profit margin
, Rationale: Debt-to-equity evaluates the extent of debt financing relative to
equity.
8. A higher debt-to-equity ratio generally means
A. Lower financial risk
B. Higher financial risk
C. Stronger liquidity
D. Better cash flow
Rationale: Increased leverage raises financial risk due to higher debt obligations.
9. Gross profit margin is calculated as
A. Net income ÷ sales
B. Gross profit ÷ sales
C. Operating income ÷ assets
D. Sales ÷ cost of goods sold
Rationale: Gross margin measures profitability after direct production costs.
10.Which statement best reflects the “5 Cs of Credit”?
A. Cost, Control, Capital, Cash, Credit
B. Character, Capacity, Capital, Collateral, Conditions
C. Credit, Collateral, Cash, Cost, Control
D. Capacity, Cost, Capital, Control, Character
Rationale: The traditional framework includes Character, Capacity, Capital,
Collateral, and Conditions.
11.Character in credit analysis refers primarily to
A. Borrower’s net worth
B. Borrower’s integrity and repayment history
C. Industry conditions
D. Collateral value
Rationale: Character evaluates management integrity and historical payment
behavior.
