CFI CBCA FINAL EXAM STUDY GUIDE 2025/2026 COMPLETE QUESTIONS AND CORRECT DETAILED ANSWERS WITH RATIONALES || 100% GUARANTEED PASS RECENT VERSION

CFI CBCA FINAL EXAM STUDY GUIDE 2025/2026 COMPLETE QUESTIONS AND CORRECT DETAILED ANSWERS WITH RATIONALES || 100% GUARANTEED PASS RECENT VERSION 1. Management Course Objectives - ANSWER 1. Structured Approach to Assessing Management Management Attitudes Assessing Strategy & Business Plan Assessing Track Record 2. Course 1 Objectives - ANSWER 1. Why Assess Management 2. Why Use a Scorecard 3. Multi Criteria Analysis 4. How & Where to Find Quantitative and Qualitative Data 3. Why Should We Assess Management? - ANSWER -We have a tendency to focus on financial issues rather than management issues -Businesses often fail as a result of management weaknesses, compared to any other single factor -Management competence is a key driver of business results -We can't just judge a business purely from financial management, the leadership team has to execute the plan 4. Why Use a Scorecard? - ANSWER -Business performance should be measured from the perspective of strategy implementation, in addition to financial results -Organizations need a balanced set of financial and non-financial performance measures and targets -A balanced set of performance measures will ensure that the entire organization participates in strategy implementation and should include: 5. Building Thing - ANSWER -Performance measured from perspective of strategy implementation -Financial Strategy Management Customer Financial and non-financial performance measures and targets -Financial ; Strategy ; Management ; Customer 6. "The Delta Model is a... - ANSWER "...new strategy framework that places the customer at the centre of management. It examines the primary options available to establish customer bonding and it prescribes how to link strategy with execution through the alignment of adaptive processes. The presentation concludes with an attempt to integrate the Porter's Five Forces Model, the Resource-based View of the firm, and the Delta Model" • Concentrate on the Customer • Strategic Positioning among the three positions • Determine the strategic agenda that determines the action program to implement your desired strategic option. • Design the proper metrics and rewards to facilitate the strategy development. 7. Ansoff Matrix - ANSWER Assess Attitude to Growth 8. Products, Markets 9. MARKET PENETRATION (1) - ANSWER existing products, existing markets 10. PRODUCT DEVELOPMENT (2) - ANSWER new product, existing market 11. MARKET DEVELOPMENT (3) - ANSWER existing product, new market 12. DIVERSIFICATION (4) - ANSWER new product, new market 13. More Strategic Frameworks - ANSWER Corporate-level (Portfolio) Business-level Market Functional-level 14. Corporate-level (Portfolio) - ANSWER Portfolio approach to managing multiple businesses 15. Business-level - ANSWER Market positioning strategies to gain competitive advantages in one or multiple industries 16. Functional-level - ANSWER Activities within and between different functions aimed at improving efficiency of the overall business 17. Objectives - ANSWER What are you trying to achieve? 18. Strategies - ANSWER How are you going to achieve the objectives? What must you do to support the strategy? 19. Measures - ANSWER What are the output measures? What are input measures? 20. Targets - ANSWER Quantifiable Time-based 21. Business Track Record Session Objectives - ANSWER 1. How to Assess a Track Record 2. Looking at the Right Data 3. Using a Scorecard 4. Examples 22. Budget vs Actual - ANSWER Evaluating what has been budgeted in the past and actual performance is crucial 23. Previous Statements - ANSWER Looking at previous statements to assess financial performance can provide insight into management 24. Places to Find Statements - ANSWER Press Releases Interviews Articles Social Media 25. Financial Trends - ANSWER Looking at forecasts for the business can also indicate how hopeful management is 26. Financial Information - Forecasts - ANSWER Revenue EBITDA Free Cash Flow Net Income Earnings per Share 27. Course Summary - ANSWER 1. Structured Approach to Assessing Management 2. Management Attitudes 3. Assessing Strategy & Business Plan 4. Assessing Track Record 28. Assessing management ultimately is about - ANSWER assessing whether management has the ability and skills to run the business such that they will be able to repay. 29. Highlight critical elements to consider - ANSWER when assessing management character. 30. Understanding the ambitions of management - ANSWER will help you assess their ability to repay. 31. The key to assessing management capabilities - ANSWER is to ask the right questions and listen to the answers. 32. Example Scorecard Measures: Mission and strategy centered around... - ANSWER Financial Customers Strategy Management 33. Customers - ANSWER • Reviews • Net Promoter Score (NPS) • News and media articles 34. Financial - ANSWER • Sales growth • Operating margin • EPS • ROCE/RONA 35. Strategy - ANSWER • Detailed roadmap • PEST analysis • Performance levels • Employee satisfaction 36. Management - ANSWER • Planning • Growth • Risk • Ownership 37. Assessing Management Framework Structured Approach - Multi-Criteria Analysis - ANSWER Attitudes / Character Strategy (Look Forward) Track Record (Look Back) 38. Objectivity (Relates to Individual or Team) - ANSWER A state of mind in which biases do not inappropriately affect assessments, judgments, and decisions Actual & Perceived Example: By accepting gifts from clients, you may feel obliged to make an assessment or decision you otherwise wouldn't have made. Therefore, independence means the ability to act with objectivity and integrity. 39. Independence and objectivity relate to client work. Conflicts of interest will - ANSWER impair independence and objectivity, but they relate to everyone. 40. A conflict is a - ANSWER difference between one's private interest and his or her fiduciary responsibilities. 41. Conflicts of Interest Individual - ANSWER Conflict between the employee and the organization. Examples: • An employee's supervisor is a family member and has control over his or her job responsibilities, salary, and any promotions that might come up. • An employee works part time for a competitor. • An employee receives personal payment for services provided to customers during their time off. 42. Conflicts of Interest Organization - ANSWER Conflict between the organization and a third party (e.g., customer, supplier, contractor). Examples: • A contractor having access to confidential information, allowing them an unfair competitive advantage to future contracts. • Where a contractor or supplier establishes the requirements of rules surrounding a request for proposal, and then bids on that RFP. They have the opportunity to ensure the requirements will only be a fit for them. 43. The Consequences of Conflicts There are a number of risks that can surface where conflicts of interest arise: - ANSWER Poor decision making Creation of an inappropriate work environment Misuse of confidential information Erosion of corporate culture 44. Consider the following areas where conflicts of interest can occur: - ANSWER • Direct or indirect financial interest in an enterprise • Loans / guarantees to or from an enterprise (including officers, directors, principal shareholders) • Business, family, and personal relationships • Serving as director or officer of an enterprise • Long-term association • Personal use of corporate property • Corporate opportunities • Gifts and entertainment 45. You were involved in an M&A deal and had to conduct due diligence on a company that you had an indirect financial interest in. • What impact could this have on your ability to make an unbiased report? • How could others perceive your objectivity if they knew of your financial interest? - ANSWER Conflicts of interest must be disclosed as soon as they are known. 46. Ethical Decision-Making Framework - ANSWER When faced with an ethical dilemma, you will want to apply a framework in deciding the right course of action to take. 01 What are the facts? 02 Available alternatives 03 Laws, regulations, policies, and procedures 04 Stakeholders and consequences 05 Values of yours and of the organization 06 Relationships between the stakeholders 07 Link with organization's mission and reputation 08 Possible influences and personal interests 09 Make decision and take action 10 Verification 47. Ethical Considerations How can ethical decisions be influenced? - ANSWER Decision making involving ethical considerations are influenced significantly by the personal characteristics of the decision maker. Personal values - They serve to evaluate situations and others' behavior. Level of control - The extent to which one feels control over life events. Level of moral development - Takes into account one's moral obligations towards others and one's personal self-interest. Organization culture and rewards - Includes current practices and policies, beliefs, values, and assumptions that influence daily conduct. 48. Theories of Ethical Decision Making There are essentially five basic approaches related to ethical decision making: - ANSWER -The utilitarian approach -The rights approach -The justice approach -The common good approach -The virtue approach 49. Role of the Legal Counsel for the Borrower Legal counsel plays an important role in protecting the interest of both the lender and the borrower. From the borrower's perspective, legal counsel will: - ANSWER • Advise the borrower on the legal liability that they will be subject to under any loan agreement. • Advise the borrower on the enforceability of those agreements including what rights the lender has in the event of default. • Holds funds until title transfer is completed. 50. Role of the Legal Counsel for the Guarantor The legal counsel should also advise the guarantor that: - ANSWER 1. If the borrower fails to make a payment on time, the guarantor will be liable to remedy the failure. 2. If the guarantor fails to remedy any failure by the borrower, the lender can sue the guarantor. 3. The lender can exercise its rights against the guarantor even if it has not pursued the borrower. 4. The liability of the guarantor is either unlimited or is limited to a specified sum as outlined in the guarantee agreement. 51. Opinion Letters To provide proof of legal counsel's advice and conclusions. - ANSWER List of Documents Factual Conclusions Legal Enforceability Opinion Qualifications 52. What are covenants? - ANSWER Clauses in a loan agreement outlining what a borrower must maintain or what they are restricted from doing. 53. Which of the following are monitoring documents commonly provided by a borrower on a monthly or quarterly basis? Select all correct answers. - ANSWER Compliance certificates, Unaudited financial statements, Tax returns 54. Financial statement review - ANSWER Involves re-assessing the cash flow and financial position of the borrower. 55. Security review - ANSWER Involves re-assessing any assets that are being used as protection in the case of default. 56. Management review - ANSWER Involves re-assessing any changes that have occurred within management that may impact the business' ability to tackle potential issues. 57. Business review - ANSWER Involves re-assessing the direction of the business, potential opportunities, and other issues the company is facing. 58. Which of the following is NOT a reason to perform an annual review on a borrower? - ANSWER An annual review gives a borrower a sense of general loan parameters such as the interest rate, time to maturity, and security. 59. Which of the following is a reason to perform an annual review on a borrower? - ANSWER An annual review provides an opportunity to do a comprehensive re-assessment. An annual review allows a lender to re-assess and meet a borrower's changing needs. An annual review helps a lender identify a borrower's business trends, early warning signs and mitigate credit risk. 60. Which of the following activities will be performed during a security review? - ANSWER A re-assessment of personal and corporate guarantors. 61. Which of the following is the best reason to take on debt instead of equity? - ANSWER Debt is non-dilutive. 62. Which of the following types of debt ranks the LOWEST on the capital stack? - ANSWER Mezz unsecured 63. Which debt repayment profile pays only interest throughout the loan term, and pays off the full principal at the end of the loan term? - ANSWER Bullet repayment 64. Which of these business categories are not on the banking spectrum? - ANSWER Company banking 65. Which of these business categories are on the banking spectrum? - ANSWER Corporate Banking Commercial Banking Business Banking 66. Which of the following components make up the overall interest rate that is charged on the client's loan? - ANSWER Spread + Cost of Funds 67. Based on the following scenarios, choose which company's loan request would have the least favorable loss given default score. - ANSWER Company Y is requesting a loan to finance the acquisition of a smaller company in their industry. 68. Which of the following is NOT part of the risk-adjusted return formula? - ANSWER Capital Requirement 69. Which of the following is part of the risk-adjusted return formula? - ANSWER Interest Revenue Closing Fees Exposure at Default