CFI CBCA CORE COURSE
ASSESSMENTS & QUIZZES.
What is the main goal of using business writing fundamentals? - (correct answer) -
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To reduce mental effort
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Which of the following statements describes a "Capacity" strength or weakness for a company in the 5
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Cs of credit framework? - (correct answer) - The net profit margin ratio is high.
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Which of the following statements describes a "Condition" strength or weakness for a company in the 5
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Cs of credit framework? - (correct answer) - The risks associated with the industry are high.
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Which of the following scenarios would NOT be considered a strength when assessing the management
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team as part of evaluating a company's character? - (correct answer) -
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Financial reports are not widely shared and performance measures have not been identified.
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Which of the following ratios most likely indicates strong "Capacity" for a company? - (correct answer) -
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High asset turnover ratio
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Select the correct formula to calculate the operating margin ratio. - (correct answer) -
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Operating Margin Ratio = EBIT / Revenue
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Select the correct formula to calculate the inventory turnover ratio. - (correct answer) -
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Inventory Turnover Ratio = Cost of Goods Sold / Average Inventory
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Which of the following most likely indicates strong "Capital" for a company? - (correct answer) -
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Unutilized lines of credit or loans
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Which of the following statements on collateral is NOT correct? - (correct answer) -
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Collateral can be used as the main determinant of a credit decision.
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Which of the following tools or methods is used to assess the general business environment? -
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(correct answer) - PEST analysis
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Select the loan contract with the lowest risk. - (correct answer) -
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A demand loan with monthly payments secured by assets
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Which is not one of the three main financial statements? - (correct answer) - Statement of equity
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What does the balance sheet indicate? - (correct answer) - The financial strength of the business
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,Financing activities - (correct answer) - Issuing shares and bonds
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Operating activities - (correct answer) - Payments to suppliers; Depreciation and amortization expense
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Investing activities - (correct answer) - Buying and selling equipment
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Which is not a section in the financial statement note disclosures? - (correct answer) -
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Management discussion and analysis
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Balance Sheet - (correct answer) - Retained earnings; Share captial
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Income Statement - (correct answer) - Rent expense
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Cash Flow Statement - (correct answer) - Sale of property, plant and equipment
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If a company has net assets equal to $3.25 million but is sold for $5.35 million, how much goodwill does
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the acquirer record on their balance sheet? - (correct answer) - $2.1 million
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Intangible assets - (correct answer) - vc vc vc vc vc
Items of value, which have no physical substance, that are used to generate revenues
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Authorized shares - (correct answer) - The total number of shares a company can sell
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Contingencies - (correct answer) - vc vc vc vc
Events that may or may not happen, depending on certain circumstances
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Commitments - (correct answer) - Future obligations that a company has agreed to vc vc vc vc vcvc vc vc vc vc vc vc vc
If a company issues 60,000 shares at $0.25 each but the shares have a par value of $0.20 each, what is t
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he resulting contributed surplus? - (correct answer) - $3,000
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What line item is not found in the statement of shareholders' equity? - (correct answer) -
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Debt issued or repurchased
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What is not true about a partnership? - (correct answer) - Partners cannot be held liable for a debt
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Which line item usually accounts for direct labor? - (correct answer) - Cost of goods sold
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Select the statements below which are true. Select all that apply. - (correct answer) -
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Depreciation and amortization are non-
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cash expenses; A company can be profitable but experience negative cash flows
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What are the 4 types of audit opinions? - (correct answer) -
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Adverse, unqualified, qualified, and disclaimer of opinion
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Which of the following statements regarding a review engagement is false? - (correct answer) -
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A review engagement is used for financial statements prepared for internal use
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, Select the following key lending ratios used to evaluate the financial capacity of a business (select all tha
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t apply). - (correct answer) - Debt to equity ratio; Working capital ratio
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Which of the following tools is NOT used to analyze a company? - (correct answer) - Porter's five forces
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Which of the following tools are used to analyze a company? - (correct answer) -
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Firm lifecycle, Ansoff's matrix, SWOT analysis
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In assessing the PESTEL factors, consumer disposable income is an example of: - (correct answer) -
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Economic factors
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Read the following passage and determine which of the PESTEL factors the described business is facing:
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Fresh and Co. is a local grocery store operating in a small town in Seattle since 2010. The store sells fres
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h vegetables, fruits, meat, dairy, and other packaged products. In recent years, people in the neighborh
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ood have shown increasing demand for organic farm products. In response, many other grocery stores a
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nd supermarkets have started selling organic vegetables and fruits grown by local US farmers. -
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(correct answer) - Social factors
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Read the following passage and determine which of the PESTEL factors the described business is facing:
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Mountain Transportation is a trucking company that provides in-
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door deliveries of electronic products purchased through large consumer electronics retailers in the US.
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Shawn, a truck driver at Mountain Transportation, has filed a lawsuit with the company regarding a viol
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ation of the Hours of Service regulations for commercial drivers. Shawn claims that he has been forced t
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o work over 70 hours for the past couple weeks, due to a high volume of customer orders. According to
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the Hours of Service regulations, all commercial drivers may not drive after 60 hours on duty in 7 consec
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utive days and may only restart after taking 34 or more consecutive hours off duty.
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(Source: https://www.fmcsa.dot.gov/regulations/hours-service/summary-hours-service-regulations) -
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(correct answer) - Legal factors
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When competition within an industry is high, which of the following is most likely to be true? -
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(correct answer) - Buyers have high bargaining power
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Which of the following is most likely true for companies at the maturity stage of the industry lifecycle? -
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(correct answer) - Sales > Cash Flow > Profit
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According to the growth/share matrix, companies at maturity have: - (correct answer) -
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Low market growth and high market share
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At which stage of the firm lifecycle would a company most likely have high business risk, low financial ri
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sk, and generate neutral net cash flow? - (correct answer) - Growth
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Read the following passage and determine which of the following strategies the business uses in creatin
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g solid relationship with its customers.
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ASSESSMENTS & QUIZZES.
What is the main goal of using business writing fundamentals? - (correct answer) -
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To reduce mental effort
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Which of the following statements describes a "Capacity" strength or weakness for a company in the 5
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Cs of credit framework? - (correct answer) - The net profit margin ratio is high.
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Which of the following statements describes a "Condition" strength or weakness for a company in the 5
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Cs of credit framework? - (correct answer) - The risks associated with the industry are high.
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Which of the following scenarios would NOT be considered a strength when assessing the management
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team as part of evaluating a company's character? - (correct answer) -
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Financial reports are not widely shared and performance measures have not been identified.
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Which of the following ratios most likely indicates strong "Capacity" for a company? - (correct answer) -
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High asset turnover ratio
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Select the correct formula to calculate the operating margin ratio. - (correct answer) -
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Operating Margin Ratio = EBIT / Revenue
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Select the correct formula to calculate the inventory turnover ratio. - (correct answer) -
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Inventory Turnover Ratio = Cost of Goods Sold / Average Inventory
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Which of the following most likely indicates strong "Capital" for a company? - (correct answer) -
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Unutilized lines of credit or loans
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Which of the following statements on collateral is NOT correct? - (correct answer) -
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Collateral can be used as the main determinant of a credit decision.
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Which of the following tools or methods is used to assess the general business environment? -
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(correct answer) - PEST analysis
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Select the loan contract with the lowest risk. - (correct answer) -
vc vc vc vc vc vc vc vc vc vc vc
A demand loan with monthly payments secured by assets
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Which is not one of the three main financial statements? - (correct answer) - Statement of equity
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What does the balance sheet indicate? - (correct answer) - The financial strength of the business
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,Financing activities - (correct answer) - Issuing shares and bonds
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Operating activities - (correct answer) - Payments to suppliers; Depreciation and amortization expense
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Investing activities - (correct answer) - Buying and selling equipment
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Which is not a section in the financial statement note disclosures? - (correct answer) -
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Management discussion and analysis
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Balance Sheet - (correct answer) - Retained earnings; Share captial
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Income Statement - (correct answer) - Rent expense
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Cash Flow Statement - (correct answer) - Sale of property, plant and equipment
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If a company has net assets equal to $3.25 million but is sold for $5.35 million, how much goodwill does
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the acquirer record on their balance sheet? - (correct answer) - $2.1 million
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Intangible assets - (correct answer) - vc vc vc vc vc
Items of value, which have no physical substance, that are used to generate revenues
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Authorized shares - (correct answer) - The total number of shares a company can sell
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Contingencies - (correct answer) - vc vc vc vc
Events that may or may not happen, depending on certain circumstances
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Commitments - (correct answer) - Future obligations that a company has agreed to vc vc vc vc vcvc vc vc vc vc vc vc vc
If a company issues 60,000 shares at $0.25 each but the shares have a par value of $0.20 each, what is t
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he resulting contributed surplus? - (correct answer) - $3,000
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What line item is not found in the statement of shareholders' equity? - (correct answer) -
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Debt issued or repurchased
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What is not true about a partnership? - (correct answer) - Partners cannot be held liable for a debt
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Which line item usually accounts for direct labor? - (correct answer) - Cost of goods sold
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Select the statements below which are true. Select all that apply. - (correct answer) -
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Depreciation and amortization are non-
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cash expenses; A company can be profitable but experience negative cash flows
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What are the 4 types of audit opinions? - (correct answer) -
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Adverse, unqualified, qualified, and disclaimer of opinion
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Which of the following statements regarding a review engagement is false? - (correct answer) -
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A review engagement is used for financial statements prepared for internal use
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, Select the following key lending ratios used to evaluate the financial capacity of a business (select all tha
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t apply). - (correct answer) - Debt to equity ratio; Working capital ratio
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Which of the following tools is NOT used to analyze a company? - (correct answer) - Porter's five forces
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Which of the following tools are used to analyze a company? - (correct answer) -
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Firm lifecycle, Ansoff's matrix, SWOT analysis
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In assessing the PESTEL factors, consumer disposable income is an example of: - (correct answer) -
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Economic factors
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Read the following passage and determine which of the PESTEL factors the described business is facing:
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Fresh and Co. is a local grocery store operating in a small town in Seattle since 2010. The store sells fres
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h vegetables, fruits, meat, dairy, and other packaged products. In recent years, people in the neighborh
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ood have shown increasing demand for organic farm products. In response, many other grocery stores a
vc vc vc vc vc vc vc vc vc vc vc vc vc vc vc
nd supermarkets have started selling organic vegetables and fruits grown by local US farmers. -
vc vc vc vc vc vc vc vc vc vc vc vc vc vc
(correct answer) - Social factors
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Read the following passage and determine which of the PESTEL factors the described business is facing:
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Mountain Transportation is a trucking company that provides in-
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door deliveries of electronic products purchased through large consumer electronics retailers in the US.
vc vc vc vc vc vc vc vc vc vc vc vc vc vc
Shawn, a truck driver at Mountain Transportation, has filed a lawsuit with the company regarding a viol
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ation of the Hours of Service regulations for commercial drivers. Shawn claims that he has been forced t
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o work over 70 hours for the past couple weeks, due to a high volume of customer orders. According to
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the Hours of Service regulations, all commercial drivers may not drive after 60 hours on duty in 7 consec
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utive days and may only restart after taking 34 or more consecutive hours off duty.
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(Source: https://www.fmcsa.dot.gov/regulations/hours-service/summary-hours-service-regulations) -
vc vc
(correct answer) - Legal factors
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When competition within an industry is high, which of the following is most likely to be true? -
vc vc vc vc vc vc vc vc vc vc vc vc vc vc vc vc vc
(correct answer) - Buyers have high bargaining power
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Which of the following is most likely true for companies at the maturity stage of the industry lifecycle? -
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(correct answer) - Sales > Cash Flow > Profit
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According to the growth/share matrix, companies at maturity have: - (correct answer) -
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Low market growth and high market share
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At which stage of the firm lifecycle would a company most likely have high business risk, low financial ri
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sk, and generate neutral net cash flow? - (correct answer) - Growth
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Read the following passage and determine which of the following strategies the business uses in creatin
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g solid relationship with its customers.
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