Page |1
CFI CBCA FINAL EXAM NEWEST 2025/2026 NEWEST
ACTUAL EXAM WITH COMPLETE QUESTIONS AND
VERIFIED ANSWERS |ALREADY GRADED A+|
What is the best next step when there is a breach of a loan
covenant? - ANSWER-Investigate why the breach happened
Calculate debt service coverage ratio (using EBITDA instead of
EBIT) based on the company's financial information below:
Net Operating Profit: 12,000
Depreciation & Amortization: 2,000
Accounts Payable: 2,000
Line of Credit: 2,500
Current Portion of Long-Term Debt: 3,000
Interest Expense: 800 - ANSWER-= 2.2 =
12,000+2,000/(2,500+3,000+800)
Calculate funded debt to EBITDA ratio based on the company's
financial information below:
Net Operating Profit: 12,000
Depreciation & Amortization: 2,000
, Page |2
Accounts payable: 2,000
Line of Credit: 2,500
Current Portion of Long-Term Debt: 3,000
Non-Current Portion of Long-Term Debt: 15,000 - ANSWER-= 1.5
= (15,000+3,000+2,500)/(12,000+2,000)
If a company takes out a 5-year equally amortizing loan of 20,000,
and 6 months later purchases equipment with that loan, what will
happen to its financial statements? - ANSWER-Current portion of
long-term debt will increase by 4,000.
Monitoring - ANSWER-It involves determining new level of credit
risk associated with a borrower.
Documentation - ANSWER-It provides timely, relevant and
thorough information for loan approval, security and monitoring.
Re-classifying - ANSWER-It involves undertaking regular reviews
of a borrower's financial statements and evaluating changes in a
borrower's business.
, Page |3
Which of the following statements is NOT true about credit
administration? - ANSWER-Credit administration is about
documentation, ongoing monitoring, and possibly re-classifying a
borrower before a loan has been made.
Which of the following statements are true about credit
administration? - ANSWER-Appropriate credit administration and
documentation practices allow for better information for more
informed decision regarding actions taken towards a borrower's
account.
Proper credit documentation practices allow for more flexibility to
respond to changes in a borrower's circumstances.
Credit administration is important for identifying problems in a
borrower's account and reducing the risk of credit default.
Loan approval documentation - ANSWER-Term sheet, loan
agreement, commitment letter
Monitoring documentation - ANSWER-Annual review;
monthly/quarterly report
, Page |4
Which of the following is the correct order of documentation
submission in the loan approval process? - ANSWER-Loan
application -> Term sheet -> Commitment letter -> Loan
agreement
What is a term sheet? - ANSWER-A non-binding agreement given
to the borrower that summarizes primary terms including the
interest rate, time to maturity, and security.
What are covenants? - ANSWER-Clauses in a loan agreement
outlining what a borrower must maintain or what they are
restricted from doing.
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
Financial statement review - ANSWER-Involves re-assessing the
cash flow and financial position of the borrower.
CFI CBCA FINAL EXAM NEWEST 2025/2026 NEWEST
ACTUAL EXAM WITH COMPLETE QUESTIONS AND
VERIFIED ANSWERS |ALREADY GRADED A+|
What is the best next step when there is a breach of a loan
covenant? - ANSWER-Investigate why the breach happened
Calculate debt service coverage ratio (using EBITDA instead of
EBIT) based on the company's financial information below:
Net Operating Profit: 12,000
Depreciation & Amortization: 2,000
Accounts Payable: 2,000
Line of Credit: 2,500
Current Portion of Long-Term Debt: 3,000
Interest Expense: 800 - ANSWER-= 2.2 =
12,000+2,000/(2,500+3,000+800)
Calculate funded debt to EBITDA ratio based on the company's
financial information below:
Net Operating Profit: 12,000
Depreciation & Amortization: 2,000
, Page |2
Accounts payable: 2,000
Line of Credit: 2,500
Current Portion of Long-Term Debt: 3,000
Non-Current Portion of Long-Term Debt: 15,000 - ANSWER-= 1.5
= (15,000+3,000+2,500)/(12,000+2,000)
If a company takes out a 5-year equally amortizing loan of 20,000,
and 6 months later purchases equipment with that loan, what will
happen to its financial statements? - ANSWER-Current portion of
long-term debt will increase by 4,000.
Monitoring - ANSWER-It involves determining new level of credit
risk associated with a borrower.
Documentation - ANSWER-It provides timely, relevant and
thorough information for loan approval, security and monitoring.
Re-classifying - ANSWER-It involves undertaking regular reviews
of a borrower's financial statements and evaluating changes in a
borrower's business.
, Page |3
Which of the following statements is NOT true about credit
administration? - ANSWER-Credit administration is about
documentation, ongoing monitoring, and possibly re-classifying a
borrower before a loan has been made.
Which of the following statements are true about credit
administration? - ANSWER-Appropriate credit administration and
documentation practices allow for better information for more
informed decision regarding actions taken towards a borrower's
account.
Proper credit documentation practices allow for more flexibility to
respond to changes in a borrower's circumstances.
Credit administration is important for identifying problems in a
borrower's account and reducing the risk of credit default.
Loan approval documentation - ANSWER-Term sheet, loan
agreement, commitment letter
Monitoring documentation - ANSWER-Annual review;
monthly/quarterly report
, Page |4
Which of the following is the correct order of documentation
submission in the loan approval process? - ANSWER-Loan
application -> Term sheet -> Commitment letter -> Loan
agreement
What is a term sheet? - ANSWER-A non-binding agreement given
to the borrower that summarizes primary terms including the
interest rate, time to maturity, and security.
What are covenants? - ANSWER-Clauses in a loan agreement
outlining what a borrower must maintain or what they are
restricted from doing.
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
Financial statement review - ANSWER-Involves re-assessing the
cash flow and financial position of the borrower.
