CFI /
CBCA
/ /
Financial
/ /
Analysis
/ /
for
/ /
Credit
/ /
Exam Questions With Correct Answers
/ // // // //
Course //Objectives //- //correct //answer(s) //✔✔ //-
Understand //the //components //that //go //into //financial //analysis //
-
Calculate /
/the /
/key /
/performance /
/ratios //that //credit //professionals //use //to //assess //a //company's //profitability //and //efficiency //
-
Calculate /
/the //key //financial //ratios //used //to //assess //a //company's //liquidity, //leverage, //and //coverage //
-
Undertake //
a/
/vertical /
/analysis /
/to /
/determine /
/profitability //from //the //income //statement //and //proportionality //from //the //balance //sheet //
-Undertake //horizontal //analysis //to //spot //trends //and //analyze //their //meaning //
,-Perform //industry //benchmarking
Vertical //& //Horizontal //Analysis //- //correct //answer(s) //✔✔ //Financial //Analysis //Overview
Financial /
/analysis /
/includes //
a/
/number /
/of /
/steps /
/to //- /
/correct /
/answer(s) /
/✔✔ /
/get //
a/
/complete /
/picture /
/of /
/the /
/performance //of //a //company. //The //starting //point //is //the //company's //financial //statements.
Ratio /
/analysis /
/is /
/great /
/for //- /
/correct /
/answer(s) /
/✔✔ /
/understanding //the //relationship //between //the //income //statement //and //the //balance //sheet.
Performing //Financial //Analysis //
,Financial //analysis //must //be //undertaken //with //- //correct //answer(s) //✔✔ //an //end-
purpose //in //mind. //This //will //influence //how //you //conduct //and //interpret //your //analysis.
Credit //Analyst //- //correct //answer(s) //✔✔ //-
Understand //a //company's //overall //financial //health //and //a //borrower's //credit //risk
-
A/
/company's /
/ability //to //service //credit //obligations //and //how //to //mitigate //loan //loss //in //a //default //scenario
Trend //& //Ratio //Analysis //- //correct //answer(s) //✔✔ //Basic //Ratio //Analysis //
Adjusting //Ratios //for //Distortion //
Complex //Adjustments
Financial /
/analysis /
/is /
/frequently /
/conducted /
/within /
/the /
/context /
/of //
a/
/specific /
/borrowing /
/request. /
/Lenders /
/must //- /
/correct /
/answer(s) /
/✔✔ /
/overlay /
/the /
, /proposed /
/credit /
/facilities /
/and //loan //terms //on //top //of //financial //results //to //see //how //financial //metrics //are //impacted.
A/
/credit /
/professional /
/may /
/conduct /
/the /
/analysis /
/using //- /
/correct /
/answer(s) /
/✔✔ //actual //current/historical //results, //as //well //as //using //projected //operating //results.
There /
/are /
/two /
/forms /
/of //financial //analysis //- //correct //answer(s) //✔✔ //Vertical //Analysis //and //Horizontal //Analysis
Vertical //Analysis //- //correct //answer(s) //✔✔ //• //Proportional //point //of //view //
•/
/Compares /
/line /
/items /
/in //a //financial //statement //to //a //base //figure //(e.g. //express //line //items //as //% //of //revenue) //
• //Can //be //used //with //the //income //statement //to //understand //profitability //
• //Can //be //used //with //the //balance //sheet //to //understand //asset/liability //structure //
• //Helps //benchmark //externally
• //Helps //benchmark //against //internal //thresholds //which //flow //through //to //a //risk //rating //
CBCA
/ /
Financial
/ /
Analysis
/ /
for
/ /
Credit
/ /
Exam Questions With Correct Answers
/ // // // //
Course //Objectives //- //correct //answer(s) //✔✔ //-
Understand //the //components //that //go //into //financial //analysis //
-
Calculate /
/the /
/key /
/performance /
/ratios //that //credit //professionals //use //to //assess //a //company's //profitability //and //efficiency //
-
Calculate /
/the //key //financial //ratios //used //to //assess //a //company's //liquidity, //leverage, //and //coverage //
-
Undertake //
a/
/vertical /
/analysis /
/to /
/determine /
/profitability //from //the //income //statement //and //proportionality //from //the //balance //sheet //
-Undertake //horizontal //analysis //to //spot //trends //and //analyze //their //meaning //
,-Perform //industry //benchmarking
Vertical //& //Horizontal //Analysis //- //correct //answer(s) //✔✔ //Financial //Analysis //Overview
Financial /
/analysis /
/includes //
a/
/number /
/of /
/steps /
/to //- /
/correct /
/answer(s) /
/✔✔ /
/get //
a/
/complete /
/picture /
/of /
/the /
/performance //of //a //company. //The //starting //point //is //the //company's //financial //statements.
Ratio /
/analysis /
/is /
/great /
/for //- /
/correct /
/answer(s) /
/✔✔ /
/understanding //the //relationship //between //the //income //statement //and //the //balance //sheet.
Performing //Financial //Analysis //
,Financial //analysis //must //be //undertaken //with //- //correct //answer(s) //✔✔ //an //end-
purpose //in //mind. //This //will //influence //how //you //conduct //and //interpret //your //analysis.
Credit //Analyst //- //correct //answer(s) //✔✔ //-
Understand //a //company's //overall //financial //health //and //a //borrower's //credit //risk
-
A/
/company's /
/ability //to //service //credit //obligations //and //how //to //mitigate //loan //loss //in //a //default //scenario
Trend //& //Ratio //Analysis //- //correct //answer(s) //✔✔ //Basic //Ratio //Analysis //
Adjusting //Ratios //for //Distortion //
Complex //Adjustments
Financial /
/analysis /
/is /
/frequently /
/conducted /
/within /
/the /
/context /
/of //
a/
/specific /
/borrowing /
/request. /
/Lenders /
/must //- /
/correct /
/answer(s) /
/✔✔ /
/overlay /
/the /
, /proposed /
/credit /
/facilities /
/and //loan //terms //on //top //of //financial //results //to //see //how //financial //metrics //are //impacted.
A/
/credit /
/professional /
/may /
/conduct /
/the /
/analysis /
/using //- /
/correct /
/answer(s) /
/✔✔ //actual //current/historical //results, //as //well //as //using //projected //operating //results.
There /
/are /
/two /
/forms /
/of //financial //analysis //- //correct //answer(s) //✔✔ //Vertical //Analysis //and //Horizontal //Analysis
Vertical //Analysis //- //correct //answer(s) //✔✔ //• //Proportional //point //of //view //
•/
/Compares /
/line /
/items /
/in //a //financial //statement //to //a //base //figure //(e.g. //express //line //items //as //% //of //revenue) //
• //Can //be //used //with //the //income //statement //to //understand //profitability //
• //Can //be //used //with //the //balance //sheet //to //understand //asset/liability //structure //
• //Helps //benchmark //externally
• //Helps //benchmark //against //internal //thresholds //which //flow //through //to //a //risk //rating //
