CFI CBCA Verified Multiple Choice and
Conceptual Actual Exam Questions With
Reviewed 100% Correct Detailed Answers
Guaranteed Pass!!Current Update
1. What is EBITDA? - ANSWER Earnings before Interest, Taxes,
Deprecation, and Amortization, proxy for recurring cash flow from the core
business operations of company
2. 5 C's to determine creditworthiness of a company? - ANSWER
Character (track record of repaying debt), Capacity (debt, EBITDA), Capital,
Collateral (what lender claims if loan isn't repaid), Conditions (purpose of
loan)
3. What are maintaneance covenants? - ANSWER relate to financial
metrics that the company must maintain after it raises debt
4. what are incurrence covenants? - ANSWER relate to specific actions
that a company must take or not take.
5. What is an upfront fee? - ANSWER fee paid to the banks for committing
to the loan
6. What are the 3 financial statements? - ANSWER income, balance sheet,
cash flow
,7. What is the income statement? - ANSWER gives the company's revenue
and expenses, and goes down to Net Income, the final line on the
statement
8. what is the balance sheet statement? - ANSWER Shows company's
assets (cash inventory and PP&E), liabilities, and shareholder's equity,
where assets=liabilities + equity
9. cash flow statement - ANSWER begins with Net Income, adjusts for
non-cash expenses and working capital changes, and then lists cash flow
from investing and financing activities
10.debt capacity - ANSWER amount of debt the company can take on for
leverage and coverage covenants
11.LIBOR - ANSWER IR that international banks charge each other for
overnight Eurodollar loans
12.What is change of control clause? - ANSWER If the company is acquired
or a new entity controls the firm, the banks can call the loans
13.What is a waiver? - ANSWER Legal agreement where the parties to the
contract agree to waive a condition for a certain instance
, 14.What is a positive covenant? - ANSWER Borrower or obligor is required
to continue to do something or actively do something
15.What is a negative covenant? - ANSWER Restricts them from carrying
out a certain action
16.3 examples of a negative covenant? - ANSWER Restriction on asset
sales, distributions, and merger
17.What are two events of default? - ANSWER failure to pay interest after
grace period and failure to pay principal
18.What is the debt cushion? - ANSWER the debt capacity minus how
much debt the company has now
19.what is a cash sweep? - ANSWER Cash flow in excess of debt payments
have to be used to pay down debt
20.collateral - ANSWER what lender claims if loan isn't repaid
21.what is borrowing base? - ANSWER The amount of money that a lender
is willing to loan a company, based on the value of the collateral the
company pledges
Conceptual Actual Exam Questions With
Reviewed 100% Correct Detailed Answers
Guaranteed Pass!!Current Update
1. What is EBITDA? - ANSWER Earnings before Interest, Taxes,
Deprecation, and Amortization, proxy for recurring cash flow from the core
business operations of company
2. 5 C's to determine creditworthiness of a company? - ANSWER
Character (track record of repaying debt), Capacity (debt, EBITDA), Capital,
Collateral (what lender claims if loan isn't repaid), Conditions (purpose of
loan)
3. What are maintaneance covenants? - ANSWER relate to financial
metrics that the company must maintain after it raises debt
4. what are incurrence covenants? - ANSWER relate to specific actions
that a company must take or not take.
5. What is an upfront fee? - ANSWER fee paid to the banks for committing
to the loan
6. What are the 3 financial statements? - ANSWER income, balance sheet,
cash flow
,7. What is the income statement? - ANSWER gives the company's revenue
and expenses, and goes down to Net Income, the final line on the
statement
8. what is the balance sheet statement? - ANSWER Shows company's
assets (cash inventory and PP&E), liabilities, and shareholder's equity,
where assets=liabilities + equity
9. cash flow statement - ANSWER begins with Net Income, adjusts for
non-cash expenses and working capital changes, and then lists cash flow
from investing and financing activities
10.debt capacity - ANSWER amount of debt the company can take on for
leverage and coverage covenants
11.LIBOR - ANSWER IR that international banks charge each other for
overnight Eurodollar loans
12.What is change of control clause? - ANSWER If the company is acquired
or a new entity controls the firm, the banks can call the loans
13.What is a waiver? - ANSWER Legal agreement where the parties to the
contract agree to waive a condition for a certain instance
, 14.What is a positive covenant? - ANSWER Borrower or obligor is required
to continue to do something or actively do something
15.What is a negative covenant? - ANSWER Restricts them from carrying
out a certain action
16.3 examples of a negative covenant? - ANSWER Restriction on asset
sales, distributions, and merger
17.What are two events of default? - ANSWER failure to pay interest after
grace period and failure to pay principal
18.What is the debt cushion? - ANSWER the debt capacity minus how
much debt the company has now
19.what is a cash sweep? - ANSWER Cash flow in excess of debt payments
have to be used to pay down debt
20.collateral - ANSWER what lender claims if loan isn't repaid
21.what is borrowing base? - ANSWER The amount of money that a lender
is willing to loan a company, based on the value of the collateral the
company pledges
