Page |1
CFI CBCA Core Course
exAm QuestIons And
Answers (VerIFIed And
updAted)
What is the main goal of using business writing
fundamentals? - ans-To reduce mental effort
Which of the following statements describes a "Capacity"
strength or weakness for a company in the 5 Cs of credit
framework? - ans-The net profit margin ratio is high.
Which of the following statements describes a "Condition"
strength or weakness for a company in the 5 Cs of credit
framework? - ans-The risks associated with the industry are
high.
, Page |2
Which of the following scenarios would NOT be considered a
strength when assessing the management team as part of
evaluating a company's character? - ans-Financial reports
are not widely shared and performance measures have not
been identified.
Which of the following ratios most likely indicates strong
"Capacity" for a company? - ans-High asset turnover ratio
Select the correct formula to calculate the operating margin
ratio. - ans-Operating Margin Ratio = EBIT / Revenue
Select the correct formula to calculate the inventory
turnover ratio. - ans-Inventory Turnover Ratio = Cost of
Goods Sold / Average Inventory
Which of the following most likely indicates strong "Capital"
for a company? - ans-Unutilized lines of credit or loans
, Page |3
Which of the following statements on collateral is NOT
correct? - ans-Collateral can be used as the main
determinant of a credit decision.
Which of the following tools or methods is used to assess the
general business environment? - ans-PEST analysis
Select the loan contract with the lowest risk. - ans-A demand
loan with monthly payments secured by assets
Which is not one of the three main financial statements? -
ans-Statement of equity
What does the balance sheet indicate? - ans-The financial
strength of the business
Financing activities - ans-Issuing shares and bonds
, Page |4
Operating activities - ans-Payments to suppliers;
Depreciation and amortization expense
Investing activities - ans-Buying and selling equipment
Which is not a section in the financial statement note
disclosures? - ans-Management discussion and analysis
Balance Sheet - ans-Retained earnings; Share captial
Income Statement - ans-Rent expense
Cash Flow Statement - ans-Sale of property, plant and
equipment
CFI CBCA Core Course
exAm QuestIons And
Answers (VerIFIed And
updAted)
What is the main goal of using business writing
fundamentals? - ans-To reduce mental effort
Which of the following statements describes a "Capacity"
strength or weakness for a company in the 5 Cs of credit
framework? - ans-The net profit margin ratio is high.
Which of the following statements describes a "Condition"
strength or weakness for a company in the 5 Cs of credit
framework? - ans-The risks associated with the industry are
high.
, Page |2
Which of the following scenarios would NOT be considered a
strength when assessing the management team as part of
evaluating a company's character? - ans-Financial reports
are not widely shared and performance measures have not
been identified.
Which of the following ratios most likely indicates strong
"Capacity" for a company? - ans-High asset turnover ratio
Select the correct formula to calculate the operating margin
ratio. - ans-Operating Margin Ratio = EBIT / Revenue
Select the correct formula to calculate the inventory
turnover ratio. - ans-Inventory Turnover Ratio = Cost of
Goods Sold / Average Inventory
Which of the following most likely indicates strong "Capital"
for a company? - ans-Unutilized lines of credit or loans
, Page |3
Which of the following statements on collateral is NOT
correct? - ans-Collateral can be used as the main
determinant of a credit decision.
Which of the following tools or methods is used to assess the
general business environment? - ans-PEST analysis
Select the loan contract with the lowest risk. - ans-A demand
loan with monthly payments secured by assets
Which is not one of the three main financial statements? -
ans-Statement of equity
What does the balance sheet indicate? - ans-The financial
strength of the business
Financing activities - ans-Issuing shares and bonds
, Page |4
Operating activities - ans-Payments to suppliers;
Depreciation and amortization expense
Investing activities - ans-Buying and selling equipment
Which is not a section in the financial statement note
disclosures? - ans-Management discussion and analysis
Balance Sheet - ans-Retained earnings; Share captial
Income Statement - ans-Rent expense
Cash Flow Statement - ans-Sale of property, plant and
equipment
