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CFI CBCA CORE COURSE EXAM
QUESTIONS AND ANSWER S
(VERIFIED AND UPDATED)
Question : What is the main goal of using business
writing fundamentals?
CORRECT ANSWER : To reduce mental effort
Question : Which of the following statements describes a
"Capacity" strength or weakness for a company in the 5 Cs of credit framework?
CORRECT ANSWER : The net profit margin ratio is
high.
Question : Which of the following statements describes a
"Condition" strength or weakness for a company in the 5 Cs of credit framework?
CORRECT ANSWER : The risks associated with the
industry are high.
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Question : Which of the following scenarios would NOT
be considered a strength when assessing the management team as part of evaluating a company's character?
CORRECT ANSWER : Financial reports are not widely
shared and performance measures have not been identified.
Question : Which of the following ratios most likely
indicates strong "Capacity" for a company?
CORRECT ANSWER : High asset turnover ratio
Question : Select the correct formula to calculate the
operating margin ratio.
CORRECT ANSWER : Operating Margin Ratio = EBIT
/ Revenue
Question : Select the correct formula to calculate the
inventory turnover ratio.
CORRECT ANSWER : Inventory Turnover Ratio = Cost
of Goods Sold / Average Inventory
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Question : Which of the following most likely indicates
strong "Capital" for a company?
CORRECT ANSWER : Unutilized lines of credit or
loans
Question : Which of the following statements on
collateral is NOT correct?
CORRECT ANSWER : Collateral can be used as the
main determinant of a credit decision.
Question : Which of the following tools or methods is
used to assess the general business environment?
CORRECT ANSWER : PEST analysis
Question : Select the loan contract with the lowest risk.
CORRECT ANSWER : A demand loan with monthly
payments secured by assets
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Question : Which is not one of the three main financial
statements?
CORRECT ANSWER : Statement of equity
Question : What does the balance sheet indicate?
CORRECT ANSWER : The financial strength of the
business
Question : Financing activities
CORRECT ANSWER: Issuing shares and bonds
Question : Operating activities
CORRECT ANSWER : Payments to suppliers;
Depreciation and amortization expense