CFI CBCA Core Verified Multiple Choice and
Conceptual Actual Exam Questions With Reviewed
100% Correct Detailed Answers
Guaranteed Pass!!Current Update
1. What's the company's working capital funding gap in days based on the
information below?
Receivable days: 47.2
Inventory days: 34.5
Payable days: 45.6
Days in the period: 365 - ANSWER 36.1 days = inventory days + receivable
days - payable days
2. Based on the information below, how much does the company need to
finance the working capital funding gap and how much is the lender willing
to provide?
Funding gap (days) 35
Days in period 365
Revenues 2,500,000
Cost of goods sold 1,600,000
3. Receivables balance 300,000 Up to 50%
Inventories balance 150,000 Up to 50% - ANSWER Financing Required =
153,425 = Cost of goods sold * Funding gap (days) / Days in period
,Financing Allowed = 225,000 = Receivables + Inventories
4. The cash conversion cycle measures: - ANSWER The number of days it
takes for a company to turn its resource inputs into cash
5. Calculate the ROI based on the cash flows of each year:
2020 Cash Flows -$2,000
2021 Cash Flows $100
2022 Cash Flows $300
2023 Cash Flows $500
2024 Cash Flows $700
2025 Cash Flows $900 - ANSWER ROI = 25% = 2025 Cum. Cash Flows /
Minimum Cum. Cash Flows
6. Calculate the net cash provided by the operating activities based on the
information below:
Net income: 60,000
Depreciation: 25,000
Increase in accounts receivable: 12,000
Increase in inventory: 8,000
Increase in accounts payable: 15,000 - ANSWER 80,000 = Net Income +
Depreciation - Increase in accounts receivable - Increase in inventory + Increase in
accounts payable
,7. What is the starting point when conducting a financial analysis of the
performance of a company? - ANSWER Review of company financial
statements
8. With an end goal in mind, what is the purpose for a credit analyst or
commercial banking professional completing a financial analysis? -
ANSWER To understand a company's overall financial health and credit
risk.
9. Which of the following is not a part of completing a vertical analysis? -
ANSWER Comparison of line items between the balance sheet and
income statement
10. Which of the following is a part of completing a vertical analysis? -
ANSWER Comparing line items in a single financial statement to a base
figure; Comparison of the client's profile to another company in the same
credit portfolio; Comparison of the client's profile to their peer group using
third party benchmarks
11. Financial ratios include: - ANSWER Coverage, leverage, and liquidity
12. The gross profit margin is calculated as... - ANSWER (Revenue - COGS)
/Revenue
13. Which of the following are unique features of a balance sheet? Select ALL
that apply. - ANSWER The asset section is broken down into two
, sections: current and non-current assets; Assets are typically organized in
terms of liquidity.
14. Efficiency ratios are important to look at how efficiently a company is using
its assets. An example of this would be the Asset Turnover Ratio, which is
calculated as... - ANSWER Net sales /Total (or net) Assets
15. Which of the following is not considered a financing activity that you would
see on the cash flow statement? - ANSWER Additions of PP&E
16. Why might a credit professional test a client's operating line as some
percent other than fully drawn (e.g., 25, 50, or 75%)? Select ALL that apply.
- ANSWER The client provided detailed projections of utilization as a
source of reference; Historical usage patterns reveal that it has never been
fully utilized in the past; A credit professional will always use figures based
on a fully drawn operating line
17. When a credit analyst is reviewing a borrowing request, it can get complex
when multiple credit facilities are involved. Why is a sources and uses of
funds table important for an analyst when reviewing the request? Select
ALL that apply.. - ANSWER It will allow for a lender's adjudication team
to evaluate the borrowing request more clearly; It will permit clearer
discussions with the borrower's management team around the borrowing
request
18. For owner-operated borrowers, which of the following statements is true
with respect to understanding management compensation when calculating
debt service coverage? - ANSWER The analyst must adjust EBITDA for
Conceptual Actual Exam Questions With Reviewed
100% Correct Detailed Answers
Guaranteed Pass!!Current Update
1. What's the company's working capital funding gap in days based on the
information below?
Receivable days: 47.2
Inventory days: 34.5
Payable days: 45.6
Days in the period: 365 - ANSWER 36.1 days = inventory days + receivable
days - payable days
2. Based on the information below, how much does the company need to
finance the working capital funding gap and how much is the lender willing
to provide?
Funding gap (days) 35
Days in period 365
Revenues 2,500,000
Cost of goods sold 1,600,000
3. Receivables balance 300,000 Up to 50%
Inventories balance 150,000 Up to 50% - ANSWER Financing Required =
153,425 = Cost of goods sold * Funding gap (days) / Days in period
,Financing Allowed = 225,000 = Receivables + Inventories
4. The cash conversion cycle measures: - ANSWER The number of days it
takes for a company to turn its resource inputs into cash
5. Calculate the ROI based on the cash flows of each year:
2020 Cash Flows -$2,000
2021 Cash Flows $100
2022 Cash Flows $300
2023 Cash Flows $500
2024 Cash Flows $700
2025 Cash Flows $900 - ANSWER ROI = 25% = 2025 Cum. Cash Flows /
Minimum Cum. Cash Flows
6. Calculate the net cash provided by the operating activities based on the
information below:
Net income: 60,000
Depreciation: 25,000
Increase in accounts receivable: 12,000
Increase in inventory: 8,000
Increase in accounts payable: 15,000 - ANSWER 80,000 = Net Income +
Depreciation - Increase in accounts receivable - Increase in inventory + Increase in
accounts payable
,7. What is the starting point when conducting a financial analysis of the
performance of a company? - ANSWER Review of company financial
statements
8. With an end goal in mind, what is the purpose for a credit analyst or
commercial banking professional completing a financial analysis? -
ANSWER To understand a company's overall financial health and credit
risk.
9. Which of the following is not a part of completing a vertical analysis? -
ANSWER Comparison of line items between the balance sheet and
income statement
10. Which of the following is a part of completing a vertical analysis? -
ANSWER Comparing line items in a single financial statement to a base
figure; Comparison of the client's profile to another company in the same
credit portfolio; Comparison of the client's profile to their peer group using
third party benchmarks
11. Financial ratios include: - ANSWER Coverage, leverage, and liquidity
12. The gross profit margin is calculated as... - ANSWER (Revenue - COGS)
/Revenue
13. Which of the following are unique features of a balance sheet? Select ALL
that apply. - ANSWER The asset section is broken down into two
, sections: current and non-current assets; Assets are typically organized in
terms of liquidity.
14. Efficiency ratios are important to look at how efficiently a company is using
its assets. An example of this would be the Asset Turnover Ratio, which is
calculated as... - ANSWER Net sales /Total (or net) Assets
15. Which of the following is not considered a financing activity that you would
see on the cash flow statement? - ANSWER Additions of PP&E
16. Why might a credit professional test a client's operating line as some
percent other than fully drawn (e.g., 25, 50, or 75%)? Select ALL that apply.
- ANSWER The client provided detailed projections of utilization as a
source of reference; Historical usage patterns reveal that it has never been
fully utilized in the past; A credit professional will always use figures based
on a fully drawn operating line
17. When a credit analyst is reviewing a borrowing request, it can get complex
when multiple credit facilities are involved. Why is a sources and uses of
funds table important for an analyst when reviewing the request? Select
ALL that apply.. - ANSWER It will allow for a lender's adjudication team
to evaluate the borrowing request more clearly; It will permit clearer
discussions with the borrower's management team around the borrowing
request
18. For owner-operated borrowers, which of the following statements is true
with respect to understanding management compensation when calculating
debt service coverage? - ANSWER The analyst must adjust EBITDA for
