CEPA TERMS EXAM QUESTIONS WITH
COMPLETE ANSWERS
Which action below should be the first type of action to be completed when
prioritizing business actions? - Answer-Create a contingency plan (because it is a
de-risking activity that is low cost but high value).
When is an Opportunity Assessment completed? - Answer-After the personal vision
is established and 90-day personal actions are selected and Before the scoreboard
and team communication protocols are developed.
Opportunity Assessment - Answer-
Start-Stop Workshop - Answer-Usually done with middle management or first level
managers of the company.
Benefits include:
1) It's useful to determine inside versus outside realty
2) It can help you understand informal politics and leadership in the company
3) Determines what things you do well from a customer standpoint
Activities in Delivering Action Plans - Answer-1) Hosting a team accountability
workshop
2) Meeting with a priority champion to discuss progress
What tools or deliverables are useful to help sustain action and deliver the action
plan? - Answer-1) A monthly 1:1 workshop
2) A monthly team accountability workshop
Key Factors to use in your approach at the Deliverable Workshop - Answer-1)
Getting agreement on next steps
2) Developing relationships
3) Avoiding information overload
90-Day Sprint Definition - Answer-A continual loop of prioritizing, executing,
measuring, reconnecting, and recalibrating every 90 days.
What is most important for a team to be successful? - Answer-Trust
As the quarterback of the team, if some of the team members appear to have lost
focus or aren't as committed to the team and business owner, you should: - Answer-
1) Set and publish clear goals
2) Create results-based rewards
Pros of Intergenerational Transfers - Answer-1) Planned
2) Low Cost
3) Business Legacy Preservation
, Factors considered by a private equity group when looking at a company to invest in
- Answer-1) Stage of development
2) Management
3) Company size
In which type of private equity transaction does the owner or shareholder end with
the most liquidity but the least control? - Answer-Outright sale
What Private Equity Groups use to value businesses - Answer-1) EBITDA x multiple
2) How the company makes money
3) The company's growth opportunities
4) Type of Business
Comprehensive company analysis and due diligence is completed in which stage of
an M&A process? - Answer-Research and Analysis
Stages of the M&A Process - Answer-
The investment banker's role on the deal team - Answer-1) To provide a customized
professional process to maximize sale proceeds
2) To be discrete
3) To orchestrate a clean and efficient process that doesn't waste time or money for
either the buyer or the seller
Reasons for including a M&A Investment Banker on the team - Answer-1) Conducts
preliminary valuation/research
2) Speeds the process (exponentially)
3) Shelters principals from emotional deal-killers and poor future relations
4) Provides professional negotiation skills
Reasons why you would advise a business owner against timing the sale of the
business - Answer-1) The economic cycle may change
2) Next year's anticipated growth may decrease or flat line
3) The business may be more valuable in its current smaller state that after growth in
the next year
Reasons an ESOP may be a viable exit option - Answer-1) To provide liquidity for
private company owners (most common application of ESOP's)
2) Capital formation
3) Employee productivity and retention
4) Known Buyer (employees) which helps control timing and communication
Factors for a successful ESOP Candidate - Answer-1) Unused debt capacity
2) Capable management
3) Well established company with predictable cash flows
Tax regulations and incentives for C Corporations, include: - Answer-1) 1042 rollover
election
2) Annual Contributions to ESOP create a tax deduction
3) Defer capital gains on stock sale
COMPLETE ANSWERS
Which action below should be the first type of action to be completed when
prioritizing business actions? - Answer-Create a contingency plan (because it is a
de-risking activity that is low cost but high value).
When is an Opportunity Assessment completed? - Answer-After the personal vision
is established and 90-day personal actions are selected and Before the scoreboard
and team communication protocols are developed.
Opportunity Assessment - Answer-
Start-Stop Workshop - Answer-Usually done with middle management or first level
managers of the company.
Benefits include:
1) It's useful to determine inside versus outside realty
2) It can help you understand informal politics and leadership in the company
3) Determines what things you do well from a customer standpoint
Activities in Delivering Action Plans - Answer-1) Hosting a team accountability
workshop
2) Meeting with a priority champion to discuss progress
What tools or deliverables are useful to help sustain action and deliver the action
plan? - Answer-1) A monthly 1:1 workshop
2) A monthly team accountability workshop
Key Factors to use in your approach at the Deliverable Workshop - Answer-1)
Getting agreement on next steps
2) Developing relationships
3) Avoiding information overload
90-Day Sprint Definition - Answer-A continual loop of prioritizing, executing,
measuring, reconnecting, and recalibrating every 90 days.
What is most important for a team to be successful? - Answer-Trust
As the quarterback of the team, if some of the team members appear to have lost
focus or aren't as committed to the team and business owner, you should: - Answer-
1) Set and publish clear goals
2) Create results-based rewards
Pros of Intergenerational Transfers - Answer-1) Planned
2) Low Cost
3) Business Legacy Preservation
, Factors considered by a private equity group when looking at a company to invest in
- Answer-1) Stage of development
2) Management
3) Company size
In which type of private equity transaction does the owner or shareholder end with
the most liquidity but the least control? - Answer-Outright sale
What Private Equity Groups use to value businesses - Answer-1) EBITDA x multiple
2) How the company makes money
3) The company's growth opportunities
4) Type of Business
Comprehensive company analysis and due diligence is completed in which stage of
an M&A process? - Answer-Research and Analysis
Stages of the M&A Process - Answer-
The investment banker's role on the deal team - Answer-1) To provide a customized
professional process to maximize sale proceeds
2) To be discrete
3) To orchestrate a clean and efficient process that doesn't waste time or money for
either the buyer or the seller
Reasons for including a M&A Investment Banker on the team - Answer-1) Conducts
preliminary valuation/research
2) Speeds the process (exponentially)
3) Shelters principals from emotional deal-killers and poor future relations
4) Provides professional negotiation skills
Reasons why you would advise a business owner against timing the sale of the
business - Answer-1) The economic cycle may change
2) Next year's anticipated growth may decrease or flat line
3) The business may be more valuable in its current smaller state that after growth in
the next year
Reasons an ESOP may be a viable exit option - Answer-1) To provide liquidity for
private company owners (most common application of ESOP's)
2) Capital formation
3) Employee productivity and retention
4) Known Buyer (employees) which helps control timing and communication
Factors for a successful ESOP Candidate - Answer-1) Unused debt capacity
2) Capable management
3) Well established company with predictable cash flows
Tax regulations and incentives for C Corporations, include: - Answer-1) 1042 rollover
election
2) Annual Contributions to ESOP create a tax deduction
3) Defer capital gains on stock sale
