CFI CBCA CORE COURSE EXAM 2025
QUESTIONS AND ANSWERS
What is the main goal of using business writing fundamentals? - ANS 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? - ANS 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? - ANS 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? - ANS Financial reports are
not widely shared and performance measures have not been identified.
Which of the following ratios most likely indicates strong "Capacity" for a company? -
ANS High asset turnover ratio
Select the correct formula to calculate the operating margin ratio. - ANS Operating Margin
Ratio = EBIT / Revenue
Select the correct formula to calculate the inventory turnover ratio. - ANS Inventory
Turnover Ratio = Cost of Goods Sold / Average Inventory
Which of the following most likely indicates strong "Capital" for a company? - ANS Unutilized
lines of credit or loans
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,Which of the following statements on collateral is NOT correct? - ANS 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? -
ANS PEST analysis
Select the loan contract with the lowest risk. - ANS A demand loan with monthly payments
secured by assets
Which is not one of the three main financial statements? - ANS Statement of equity
What does the balance sheet indicate? - ANS The financial strength of the business
Financing activities - ANS Issuing shares and bonds
Operating activities - ANS Payments to suppliers; Depreciation and amortization expense
Investing activities - ANS Buying and selling equipment
Which is not a section in the financial statement note disclosures? - ANS Management
discussion and analysis
Balance Sheet - ANS Retained earnings; Share captial
Income Statement - ANS Rent expense
Cash Flow Statement - ANS Sale of property, plant and equipment
Copyright ©2025 BRIGHTSTARS ALL RIGHTS RESERVED 2
, 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? - ANS $2.1 million
Intangible assets - ANS Items of value, which have no physical substance, that are used to
generate revenues
Authorized shares - ANS The total number of shares a company can sell
Contingencies - ANS Events that may or may not happen, depending on certain
circumstances
Commitments - ANS 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? - ANS $3,000
What line item is not found in the statement of shareholders' equity? - ANS Debt issued or
repurchased
What is not true about a partnership? - ANS Partners cannot be held liable for a debt
Which line item usually accounts for direct labor? - ANS Cost of goods sold
Select the statements below which are true. Select all that apply. - ANS Depreciation and
amortization are non-cash expenses; A company can be profitable but experience negative cash
flows
What are the 4 types of audit opinions? - ANS Adverse, unqualified, qualified, and disclaimer
of opinion
Copyright ©2025 BRIGHTSTARS ALL RIGHTS RESERVED 3
QUESTIONS AND ANSWERS
What is the main goal of using business writing fundamentals? - ANS 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? - ANS 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? - ANS 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? - ANS Financial reports are
not widely shared and performance measures have not been identified.
Which of the following ratios most likely indicates strong "Capacity" for a company? -
ANS High asset turnover ratio
Select the correct formula to calculate the operating margin ratio. - ANS Operating Margin
Ratio = EBIT / Revenue
Select the correct formula to calculate the inventory turnover ratio. - ANS Inventory
Turnover Ratio = Cost of Goods Sold / Average Inventory
Which of the following most likely indicates strong "Capital" for a company? - ANS Unutilized
lines of credit or loans
Copyright ©2025 BRIGHTSTARS ALL RIGHTS RESERVED 1
,Which of the following statements on collateral is NOT correct? - ANS 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? -
ANS PEST analysis
Select the loan contract with the lowest risk. - ANS A demand loan with monthly payments
secured by assets
Which is not one of the three main financial statements? - ANS Statement of equity
What does the balance sheet indicate? - ANS The financial strength of the business
Financing activities - ANS Issuing shares and bonds
Operating activities - ANS Payments to suppliers; Depreciation and amortization expense
Investing activities - ANS Buying and selling equipment
Which is not a section in the financial statement note disclosures? - ANS Management
discussion and analysis
Balance Sheet - ANS Retained earnings; Share captial
Income Statement - ANS Rent expense
Cash Flow Statement - ANS Sale of property, plant and equipment
Copyright ©2025 BRIGHTSTARS ALL RIGHTS RESERVED 2
, 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? - ANS $2.1 million
Intangible assets - ANS Items of value, which have no physical substance, that are used to
generate revenues
Authorized shares - ANS The total number of shares a company can sell
Contingencies - ANS Events that may or may not happen, depending on certain
circumstances
Commitments - ANS 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? - ANS $3,000
What line item is not found in the statement of shareholders' equity? - ANS Debt issued or
repurchased
What is not true about a partnership? - ANS Partners cannot be held liable for a debt
Which line item usually accounts for direct labor? - ANS Cost of goods sold
Select the statements below which are true. Select all that apply. - ANS Depreciation and
amortization are non-cash expenses; A company can be profitable but experience negative cash
flows
What are the 4 types of audit opinions? - ANS Adverse, unqualified, qualified, and disclaimer
of opinion
Copyright ©2025 BRIGHTSTARS ALL RIGHTS RESERVED 3
