Which of the following statements describes a Capacity strength or weakness for a company in the 5 Cs of credit framework There are assets available to secure the loan in the event of a default The net profit margin ratio is high There is a large potential customer base in this industry The company has sufficient equity to withstand a downturn Which of the following statements describes a Condition strength or weakness for a company in the 5 Cs of credit framework The risks associated with the industry are high The operating cash flow of the company is low The company has redundant assets that are not currently used in business The management team has a great reputation among customers and suppliers Which of the following scenarios would NOT be considered a strength when assessing the management team as part of evaluating a company's character Management has identified clear risk mitigation strategies Management has experience in the industry and financial acumen Management has clear communication of expectations to the team 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 Increasing accounts payables Positive investing cash flows High asset turnover ratio High debt to equity ratio Select the correct formula to calculate the operating margin ratio Operating Margin Ratio EBIT Revenue Operating Margin Ratio EBIT Cost of Goods Sold Operating Margin Ratio Net Income Revenues Operating Margin Ratio Net Income Cost of Goods Sold Select the correct formula to calculate the inventory turnover ratio Inventory Turnover Ratio Cost of Goods Sold Average Inventory Inventory Turnover Ratio Average Inventory Cost of Goods Sold Inventory Turnover Ratio Revenues Average Inventory Inventory Turnover Ratio Average Inventory Revenues Which of the following most likely indicates strong Capital for a company Limited equity has been invested by the owners Unutilized lines of credit or loans Low quality inventory Increasing interest bearing debt Which of the following statements on collateral is NOT correct Collateral can be used as the main determinant of a credit decision Assets that are easy to value and transfer are good collateral to take Assets including land, buildings, inventory, and machinery can be used as collateral to secure debt The location of the assets needs to be considered when assessing the collateral Which of the following tools or methods is used to assess the general business environment MAST framework PEST analysis SWOT analysis Cash flow analysis Select the loan contract with the lowest risk An unsecured demand loan with monthly payments A term loan with a bullet principal payment at loan maturity secured by assets An unsecured term loan with a bullet principal payment at maturity A demand loan with monthly payments secured by assets Which is not one of the three main financial statements Cash flow statement Statement of equity Income statement Balance sheet What does the balance sheet indicate The financial strength of the business The cash inflows and outflows of the business The different types of products sold The revenues and expenses of the business Match the following line items from the cash flow statement to their respective sections Buying and selling equipment Payments to suppliers Issuing shares and bonds Depreciation and amortization expense Operating activities Financing activities Investing activities Which is not a section in the financial statement note disclosures Management discussion and analysis Property, plant and equipment Related party transactions Share capital Match the following line items to their correct financial statement Share capital Retained earnings Rent expense Sale of property, plant and equipment Balance Sheet Income Statement Cash Flow Statement If a company has net assets equal to $3 25 million but is sold for $5 35 million, how much goodwill does the acquirer record on their balance sheet ($2 1) million $2 1 million $3 25 million $8 6 million Match the following definitions to the appropriate terms Future obligations that a company has agreed to Events that may or may not happen, depending on certain circumstances The total number of shares a company can sell Items of value, which have no physical substance, that are used to generate revenues Intangible assets Commitments Contingencies Authorized shares If a company issues 60,000 shares at $0 25 each but the shares have a par value of $0 20 each, what is the resulting contributed surplus $12,000 15,000 ($3,000) $3,000 What line item is not found in the statement of shareholders' equity Debt issued or repurchased Dividends paid Shares issued or repurchased Changes in retained earnings What is not true about a partnership Partners cannot be held liable for a debt The business has access to capital Partners are held liable for the actions of one another The business is owned by two or more people Which line item usually accounts for direct labor Revenue Operating expenses Cost of goods sold Shareholders' equity Select the statements below which are true Select all that apply Depreciation and amortization are non cash expenses Business acquisitions are found in the financing activities section of the cash flow statement The 3 levels of accountant reports are audited, review engagement, and notice to management A company can be profitable but experience negative cash flows What are the 4 types of audit opinions Adverse, unqualified, credible, and disclosure of opinion Adverse, unqualified, qualified, and disclaimer of opinion Review, unqualified, qualified, and unsure opinion Unqualified, qualified, disclosure, and unsure opinion Which of the following statements regarding a review engagement is false A review engagement is used for financial statements prepared for internal use A review engagement is used for financial statements prepared for external use A review engagement provides a moderate level of comfort A review engagement provides negative assurance Select the following key lending ratios used to evaluate the financial capacity of a business (select all that apply) Debt to equity ratio Lender analysis ratio Financial capacity ratio Working capital ratio According to the course, which is the most important section of the business plan Financial Management and Projections Statements Services or Product Lines Executive Summary Management and Operations In which section of a business plan can you find the name of the company's lawyer Select the best answer Company Description Executive Summary Appendices Financial Management and Projections Statements Which SMART component is the following goal missing In 2020, Company ABC's Canadian operations generated $90M of revenue, and in 2021 the Canadian operations generated $98M of revenue Their goal is to achieve $100M of revenue in their Canadian operations in the near future Realistic Measurable Timely Specific Where would you most likely find information regarding the hierarchical or flat structure of the organization Select the best answer Company Description Management and Operations Executive Summary Appendices What is a benefit of having a small number of suppliers for a company's products More product variety Mitigates the risk of not being able to obtain inventory to sell The suppliers have better bargaining power Better relationship which can result in better repayment terms Which risks may be associated with the location of a firm's operations Select all that apply Regulatory risk Foreign exchange risk Budgetary risk Geo political risk Company XYZ sells women's running shoes in two U S states Which option would be considered their SAM (Serviceable Attainable Market) The demand of women's running shoes in the two U S states The demand of women who run and who live near the running shoe stores with feet sizes between 6 to 8 The suppliers who are involved in the women's running shoe market The demand of the entire shoe market Company A sells bottled soft drinks in Australia Which of the following answers best describes a threat to company A according to a SWOT analysis Company A doesn't have a corporate website Company A only sells four products Customers are purchasing more gym memberships and are becoming more focused on their health More consumers are drinking bottled soft drinks this year than previous years Company B is a technology company which primarily sells products to middle class individuals If the average middle class income falls, which PESTEL factor would be affected Social Environmental Economic Technological When a company is developing their outlook through conducting a market analysis, which areas should they consider Select all that apply Population growth expectations in the region Unemployment rates Spending plans of the relevant government Favorable or unfavorable legislation Which of the following three statements are true Select the best answer There is a tendency to focus on financial issues rather than management issues Management ability is a key driver of business results Businesses often fail as a result of management weaknesses I I and II II and III All statements are true Which is not an example of a strategy scorecard measure Performance levels Employee satisfaction Detailed roadmap Sales growth Which is not a questioning skill used to gather more information Using straightforward yes no questions Listening Giving yourself time to think Thinking from the other party's perspective Which type of attitude is specific to management looking into a strategy if the firm's largest customers stopped purchasing from the firm tomorrow Attitude to planning Attitude to business risk Attitude to growth Attitude to ownership According to the study conducted on internal barriers to growth, which was the least important factor out of this list Reluctance to dilute ownership Management team too small stretched Lack of successful innovation Reluctance to take on new debt If a company has an aim to grow and plans to exit by sale of the business or flotation, what type of ownership style is this Business oriented Dynast Family oriented Protectionists What does PESTEL stand for Political, economic, structure, tactical, environmental, legal Planning, ethics, social, team, environmental, leadership Partnership, economic, social, team, environmental, legal Political, economic, social, technological, environmental, legal Using the Ansoff Matrix, if a company was focusing on growing one of their existing products in a new market, what type of strategy would this be Market penetration Market development Diversification Product development What level of strategy would focus on market positioning strategies to gain a competitive advantage Business level Customer level Functional level Corporate level (portfolio) Which of the following is an example of a strategy Increase the revenue per customer Sell 20 apples by February 1 Create a promotional offer to increase the sale of food products Average customer rating of food products Which components should be analyzed when assessing the track record of a company Select all that apply Historical promotional success Budget vs actual Customer preferences Previous statements What is the difference between budget and actual performance called Optimal performance budget Budget target difficulty Personal goal Budget variance

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Posted on Jun 23, 2024

Which of the following statements describes a Capacity strength or weakness for a company in the 5 Cs of credit framework? There are assets available