CFI CBCA Core Course Exam Questions And Answers (Verified And Updated)
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CFI
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CFI
CFI CBCA Core Course Exam Questions
And Answers (Verified And Updated)
What is the main goal of using business writing fundamentals? - answerTo reduce mental
effort
Which of the following statements describes a "Capacity" strength or weakness for a company in
the 5 Cs of credit framework? - an...
CFI CBCA Core Course Exam Questions And Answers (Verified And Updated) What is the main goal of using business writing fundamentals? - answer✔✔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? - answer✔✔The net profit margin rat io is high. Which of the following statements describes a "Condition" strength or weakness for a company in the 5 Cs of credit framework? - answer✔✔The risks associated with the industry are high. Which of the following scenarios would NOT be considered a strength when assessing the management team as part of evaluating a company's character? - answer✔✔Financial reports are not widely shared and performance measures have not been identified. Which of the following ratios most likely indicates strong "Capaci ty" for a company? - answer✔✔High asset turnover ratio Select the correct formula to calculate the operating margin ratio. - answer✔✔Operating Margin Ratio = EBIT / Revenue Select the correct formula to calculate the inventory turnover ratio. - answer✔✔Inventory Turnover Ratio = Cost of Goods Sold / Average Inventory Which of the following most likely indicates strong "Capital" for a company? - answer✔✔Unutilized lines of credit or loans Which of the following statements on collateral is NOT correct? - answ er✔✔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? - answer✔✔PEST analysis Select the loan contract with the lowest risk. - answer✔✔A demand l oan with monthly payments secured by assets Which is not one of the three main financial statements? - answer✔✔Statement of equity What does the balance sheet indicate? - answer✔✔The financial strength of the business Financing activities - answer✔✔Issuing shares and bonds Operating activities - answer✔✔Payments to suppliers; Depreciation and amortization expense Investing activities - answer✔✔Buying and selling equipment Which is not a section in the financial statement note disclosures? - answer✔✔Manageme nt discussion and analysis Balance Sheet - answer✔✔Retained earnings; Share captial Income Statement - answer✔✔Rent expense Cash Flow Statement - answer✔✔Sale of property, plant and equipment If a company has net assets equal to $3.25 million but is sold f or $5.35 million, how much goodwill does the acquirer record on their balance sheet? - answer✔✔$2.1 million Intangible assets - answer✔✔Items of value, which have no physical substance, that are used to generate revenues Authorized shares - answer✔✔The total number of shares a company can sell Contingencies - answer✔✔Events that may or may not happen, depending on certain circumstances Commitments - answer✔✔Future obligations that a company has agreed to If a company issue s 60,000 shares at $0.25 each but the shares have a par value of $0.20 each, what is the resulting contributed surplus? - answer✔✔$3,000 What line item is not found in the statement of shareholders' equity? - answer✔✔Debt issued or repurchased What is not true about a partnership? - answer✔✔Partners cannot be held liable for a debt Which line item usually accounts for direct labor? - answer✔✔Cost of goods sold Select the statements below which are true. Select all that apply. - answer✔✔Depreciation and amor tization are non -cash expenses; A company can be profitable but experience negative cash flows What are the 4 types of audit opinions? - answer✔✔Adverse, unqualified, qualified, and disclaimer of opinion Which of the following statements regarding a review engagement is false? - answer✔✔A review engagement is used for financial statements prepared for internal use Select the following key lending ratios used to evaluate the financial capacity of a business (select all that apply). - answer✔✔Debt to equity r atio; Working capital ratio Which of the following tools is NOT used to analyze a company? - answer✔✔Porter's five forces Which of the following tools are used to analyze a company? - answer✔✔Firm lifecycle, Ansoff's matrix, SWOT analysis In assessing the PESTEL factors, consumer disposable income is an example of: - answer✔✔Economic factors Read the following passage and determine which of the PESTEL factors the described business is facing: Fresh and Co. is a local grocery store operating in a small town in Seattle since 2010. The store sells fresh vegetables, fruits, meat, dairy, and other packaged products. In recent years, people in the neighborhood have shown increasing demand for organic farm products. In response, many other grocery stores and superm arkets have started selling organic vegetables and fruits grown by local US farmers. - answer✔✔Social factors Read the following passage and determine which of the PESTEL factors the described business is facing: Mountain Transportation is a trucking compa ny that provides in -door deliveries of electronic products purchased through large consumer electronics retailers in the US. Shawn, a truck driver at Mountain Transportation, has filed a lawsuit with the company regarding a violation of the Hours of Servic e regulations for commercial drivers. Shawn claims that he has been forced to work over 70 hours for the past couple weeks, due to a high volume of customer orders. According to the Hours of Service regulations, all commercial drivers may not drive after 6 0 hours on duty in 7 consecutive days and may only restart after taking 34 or more consecutive hours off duty. (Source: https://www.fmcsa.dot.gov/regulations/hours -service/summary -hours -service -
regulations) - answer✔✔Legal factors When competition within a n industry is high, which of the following is most likely to be true? - answer✔✔Buyers have high bargaining power Which of the following is most likely true for companies at the maturity stage of the industry lifecycle? - answer✔✔Sales > Cash Flow > Profit According to the growth/share matrix, companies at maturity have: - answer✔✔Low market growth and high market share At which stage of the firm lifecycle would a company most likely have high business risk, low financial risk, and generate neutral net cash flow? - answer✔✔Growth Read the following passage and determine which of the following strategies the business uses in creating solid relationship with its customers.
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