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CEPA Exam: Questions With Solutions -100% Correct
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CEPA Exam: Questions With Solutions -100% Correct
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CEPA Exam: Questions With Solutions -100% Correct__% of owners have no WRITTEN transition plan. Right Ans - 79
__% have done no planning at all. Right Ans - 48
__% have no written personal THIRD ACT plan. Right Ans - 94
__% of owners plan to transition over the next 10 years (representing ____
million
businesses and over $___ trillion in wealth). Right Ans - 76%, 4.5 million,
$10 trillion
___ of business owners have no transition plan. Right Ans - 49%
More than __% of businesses that are put on the market do not sell. Right
Ans - 70
Only __% of family-owned
businesses transition to the second generation, and only __% survive to the
third. Right Ans - 30%, 12%
A Successful Exit Strategy Has Three Legs: Right Ans - Maximizes
Transferrable Business Value, Ensures Owner is Financially Prepared, and
Ensures there is a plan for "What Next?"
5 Stages of the Value Maturity Index Right Ans - Identify, Protect, Build,
Harvest, and Manage Value
The 4 C's Right Ans - Human, Structural, Customer, Social
Strategic Value factors you control Right Ans - Predictable Cash Flow, Clean
Balance Sheet, Size Matters!
Strategic Value factors you control some of Right Ans - Private capital
market conditions, Terms/Exit Option, Tangibles (value factors)
Traditional accounting systems are setup to provided regular feedback on
_____________________, yet your ________________________
,are the direct drivers of business attractiveness. Right Ans - tangible assets,
intangible assets
Value Acceleration measures the value of your ________________________. Right
Ans - intangible assets
Value Acceleration is a proven process that focuses on value growth and
aligning __________________, __________________, and __________________ goals. Right
Ans - business, personal, and financial
Value Acceleration is a proven process that focuses on ____________________ and
aligning business, personal, and financial goals. Right Ans - value growth
An exit plan asks and answers all the ________________, _______________,
_______________, _______________, and ___________ questions involved in transitioning
a privately owned business. Right Ans - business, personal, financial, legal,
and tax
Exit Planning combines the __________, ______________, _______________, and
_______________ into a clear, simple strategy to build a business that is
transferable through strong __________, ______________, _______________, and
_______________ capital. Right Ans - plan, concept, effort, and process, human,
structural, customer, and social
______________________ protects future you from present you; and, vise versa!
Right Ans - Proper planning
Where you will be 5 years from now is determined by
______________________________________ and ___________________________________. Right
Ans - the books you read and the people you associate with today.
The "quarterback" is the ____________________________________________. Right Ans -
personal financial planning team
___% of business owners do not have a written FINANCIAL plan. Right Ans -
75
Proper financial planning answers a huge question - What is the
___________________? Right Ans - Wealth Gap
,A first step in financial planning: gather the personal ______________________ data.
Right Ans - balance sheet
A _______________________ provides for the stability and continuity of a closely
held business and is a crucial part of a business owner's overall succession
and estate plan. Right Ans - buy-sell agreement
Triggering events may include: Right Ans - Death of an owner, Disability of
an owner, An offer by an outside party to purchase the owner's interest,
Termination of an owner's employment, Divorce of an owner
There are many acceptable ways to execute investment plans post-exit. The
key is to manage the ______________________ within a framework focused on
________________. Right Ans - family expectations, goals.
Families without advisors often decide to ___________________. Right Ans - do
nothing
The ______ is one of the greatest wealth building tools if used correctly.
Right Ans - IRC
Systems don't solve problems, ___________ do. Right Ans - people
You don't have to choose between today and the future. Doing the right things
today ensures ________________________________. Right Ans - a successful exit in
the future
When you consider your net worth, your business is the most significant line
item on paper; in fact, according to most financial planners, it's like __ to __%
of your net worth. Right Ans - 80 to 90%
Business value is not _____________. Right Ans - liquid
The Value Acceleration Methodology can increase your net worth by a factor
of _____________. Right Ans - five
There are approximately ______________ privately held businesses in the United
States today. While most of those are holding companies with no payroll,
, roughly __________ are operating companies. Right Ans - 28 million, six
million
_________________________ businesses do $5 million or less in sales. Right Ans -
Micro Market
The ______________________________ is defined as businesses with sales between $5
million and $100 million Right Ans - Lower Middle Market
The __________________________________ has sales over $100 million. Right Ans -
Upper Middle Market
Baby Boomers born between ______ and _________, nearly _____________ strong,
own _______________ of privately held businesses. Right Ans - 1946, 1964, 80
million, two-thirds
___% of those who exit "profoundly regret" the decision within 12 months of
exiting. Right Ans - 75
Owners don't really start thinking about transition and retirement until they
reach around age ____ because their work has been one of the most significant
parts of their life, if not the biggest. Right Ans - 55
Historical successful transition rates are between ____ and _____%. That means
______ to ______% of the possible wealth will not transfer. Right Ans - 20%,
30%, 70%, 80%
__________________ of owners are not familiar with all exit options. Right Ans -
two-thirds
______% have no plans in place to cover illness, death, or forced exit. Right
Ans - 40%
Half of all owners need the company to remain profitable during and after the
transition plan, yet _____% have not taken on a strategic review or a value
enhancement project. Right Ans - 86%
____% felt they had a good idea of what their business is worth, yet only ____%
have had a formal valuation in the last two years Right Ans - 56%, 18%
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