CFI CBCA FINANCIAL ANALYSIS FOR CREDIT COMPLETE EXAM
REAL QUESTIONS AND VERIFIED ANSWERS NEWEST
(2026/2027)
1. What are the main course objectives in financial analysis?
Understand the components that go into financial analysis, calculate
key performance ratios for profitability and efficiency, calculate key
financial ratios for liquidity, leverage, and coverage, undertake
vertical analysis for profitability and proportionality, undertake
horizontal analysis to spot trends, and perform industry
benchmarking.
2. What is the starting point for financial analysis? The company's
financial statements.
3. What is ratio analysis great for? Understanding the relationship
between the income statement and the balance sheet.
4. What must financial analysis be undertaken with? An end-
purpose in mind, which influences how you conduct and interpret
your analysis.
5. What does a credit analyst need to understand? A company's
overall financial health, a borrower's credit risk, a company's ability
to service credit obligations, and how to mitigate loan loss in a
default scenario.
6. What are the two forms of financial analysis? Vertical Analysis
and Horizontal Analysis.
7. What is Vertical Analysis? A proportional point of view that
compares line items in a financial statement to a base figure, such as
expressing line items as a percentage of revenue.
8. What can Vertical Analysis be used with on the income
statement? To understand profitability.
9. What can Vertical Analysis be used with on the balance sheet?
To understand asset/liability structure.
, 10. How does Vertical Analysis help with benchmarking? It
helps benchmark externally and against internal thresholds which
flow through to a risk rating.
11. How can ratios from Vertical Analysis be compared? To
industry performance.
12. What happens if ratios fall outside of expectations? They
will help you ask questions of your client.
13. What does Horizontal Analysis provide? Context both
within the company's own performance and through comparisons
with peer groups.
14. What does Horizontal Analysis look at? Trends in financial
statements.
15. How does Horizontal Analysis benchmark trends?
Internally and externally against peers across a time period.
16. What happens when you combine Horizontal Analysis
with Vertical Analysis? It provides more useful information.
17. What does Horizontal Analysis allow for consideration of?
Liquidity, solvency, and leverage ratios.
18. What is an example of Horizontal Analysis? Company A has
positive revenue growth of 5% year-over-year.
19. Why might 5% revenue growth not be a good indicator?
Unless the industry was outperforming it year-over-year.
20. What questions does underperforming industry trends
raise? Questions about sustainability, competitive advantage, and
strategy.
21. What strategy questions should be asked if a company
falls behind industry trends? What is their strategy to improve
their competitive advantage? What threats have they identified and
how are they mitigating them?
22. What does analyzing credit mean? Identifying risk to
repayment capacity.
23. What can falling behind industry trends indicate? A
company in decline.
REAL QUESTIONS AND VERIFIED ANSWERS NEWEST
(2026/2027)
1. What are the main course objectives in financial analysis?
Understand the components that go into financial analysis, calculate
key performance ratios for profitability and efficiency, calculate key
financial ratios for liquidity, leverage, and coverage, undertake
vertical analysis for profitability and proportionality, undertake
horizontal analysis to spot trends, and perform industry
benchmarking.
2. What is the starting point for financial analysis? The company's
financial statements.
3. What is ratio analysis great for? Understanding the relationship
between the income statement and the balance sheet.
4. What must financial analysis be undertaken with? An end-
purpose in mind, which influences how you conduct and interpret
your analysis.
5. What does a credit analyst need to understand? A company's
overall financial health, a borrower's credit risk, a company's ability
to service credit obligations, and how to mitigate loan loss in a
default scenario.
6. What are the two forms of financial analysis? Vertical Analysis
and Horizontal Analysis.
7. What is Vertical Analysis? A proportional point of view that
compares line items in a financial statement to a base figure, such as
expressing line items as a percentage of revenue.
8. What can Vertical Analysis be used with on the income
statement? To understand profitability.
9. What can Vertical Analysis be used with on the balance sheet?
To understand asset/liability structure.
, 10. How does Vertical Analysis help with benchmarking? It
helps benchmark externally and against internal thresholds which
flow through to a risk rating.
11. How can ratios from Vertical Analysis be compared? To
industry performance.
12. What happens if ratios fall outside of expectations? They
will help you ask questions of your client.
13. What does Horizontal Analysis provide? Context both
within the company's own performance and through comparisons
with peer groups.
14. What does Horizontal Analysis look at? Trends in financial
statements.
15. How does Horizontal Analysis benchmark trends?
Internally and externally against peers across a time period.
16. What happens when you combine Horizontal Analysis
with Vertical Analysis? It provides more useful information.
17. What does Horizontal Analysis allow for consideration of?
Liquidity, solvency, and leverage ratios.
18. What is an example of Horizontal Analysis? Company A has
positive revenue growth of 5% year-over-year.
19. Why might 5% revenue growth not be a good indicator?
Unless the industry was outperforming it year-over-year.
20. What questions does underperforming industry trends
raise? Questions about sustainability, competitive advantage, and
strategy.
21. What strategy questions should be asked if a company
falls behind industry trends? What is their strategy to improve
their competitive advantage? What threats have they identified and
how are they mitigating them?
22. What does analyzing credit mean? Identifying risk to
repayment capacity.
23. What can falling behind industry trends indicate? A
company in decline.
