what information in a credit agency report can help a bank assess a company’s management integrity

Opinion about the company management

Information about the financial performance

How freely the management shares information

Details on covenant compliance for the bank loans

What is the starting point in the process of projecting a business’s financial performance

Review historic levels of the risk drivers

Project future values for the risk drivers

What would describe a non-fund-based facility

A facility that may result in a funded obligation if the customer fails to settle any payments due

A facility that is lower risk than a fund-based facility

A credit facility that incurs a monetary obligation when draw down occurs

A facility that is similar to a fund-based facility in terms of how it is recorded in a bank’s books.

What type of capital investment is intangible and financial in nature

Listing securities on a stock exchange

Replacing existing plant and equipment

Which is an example of an insurance covenant in a credit agreement

Requirement to pay premiums on schedule to avoid a lapse of coverage

Prohibition on providing other creditors security over any assets

Restriction on incurring new debt above a pre-determined amount

Obligation to submit security valuations performed by an independent appraiser

Which result of an increase in management risk will most negatively affect a company’s financial performance

Managers fail to take timely or correct decisions that affect sales or costs

Managers’ increased focus on their own compensation packages

Managers fail to take full advantage of favourable developments in the external environment

Managers are less transparent in their dealings with external stakeholders, such as banks

What is the primary reason for assessing a business’s financial performance before extending credit

To determine how a business generates cash flow

To determine what a company’s key ratios are

To determine how a company spends its free cash flow

To determine why a business has achieved certain results

For which type of banking products does the Reserve Bank of India regulate interest rates?

Chequing accounts held by residents

Personal loans of more than INR 200,000

Commercial loans of more than INR 200,000

What is the most effective measure of a business’s operating efficiency

Trends in operating expenses as a percentage of sales

Absolute level of operating expenses

Which describes the absolute priority rule with respect to payments made to creditors at default

Available funds are paid first to the highest ranked class until the borrower’s obligations are fully satisfied

Subordinated debt is paid before insolvency-related costs

Available funds are paid first to the lowest ranked class until the borrower’s obligations are fully satisfied

Distributions to each ranked class are paid out proportionately based on its percentage in the company's capital structure

What is meant by the term “excess borrowings” under the Tandon Committee approach to lending

The minimum required net working capital exceeds the actual amount

The amount borrowed exceeds current liabilities

The liquidity level exceeds the minimum required

The maximum permissible bank borrowings exceed current assets

How should a customer’s account activity be monitored to ensure end-use of funds

Browse through the account and investigate any unusual transaction

Review a percentage of all the transactions

Scrutinise all the transactions regardless of value

Review the transactions above a threshold amount

Which factor will decrease a buyer’s market risk in the long term in conditions where the supplier has high bargaining power

Availability of substitute products in the market

Increase in supplier’s market share

High demand skilled workers are employed by the supplier

What information should be reviewed in the periodic progress reports on implementation of a project to assess likelihood of meeting the loan repayment obligations

The project implementation is on schedule

Funding is available to cover any cost overruns

There are orders for the project outputs once completed

Project reports have been approved by the lender’s engineer

Why is management integrity the most critical factor when assessing the impact of management risk on a company’s credit risk

A positive assessment of management integrity is necessary for a lender to be confident in the reliability of the information provided by the company

Management lacking integrity may prioritise payments to other external stakeholders

A lack of integrity can result in a company using cash flows for purposes other than interest or loan payments

A lack of integrity can result in a company’s underperformance and subsequent inability to meet its payment obligations

What governing body for the Insolvency and Bankruptcy Code would set up accreditation for insolvency professionals and information utilities

Insolvency and Bankruptcy Board of India

Which proposition is least likely to be considered for a term loan for its financing requirements

Daily working capital requirements for a small business

Expansion of a fleet of vehicles

Capital expenditure for a power plant

An instalment financing construction project

What is the primary reason for reviewing external information when assessing a company’s credit quality

To evaluate what developments may create opportunities for the company or adversely affect its performance

To evaluate any adverse press coverage of the company

To assess the company’s vulnerability to natural disasters

To review any gradual economic changes that may affect the company’s industry

What is the difference between a partnership firm and a Limited Liability Partnership (LLP)

An LLP is a separate legal entity from its members and a partnership is not a separate legal entity

If a partner dies a partnership firm continues to exist and an LLP dissolves

An LLP is governed by the Indian Partnership Act and a partnership firm is governed by the Companies Act

The income from a partnership firm stays within the firm and LLP income is personal income for the partners

What is the first step for a management team in order to achieve results through the efforts of others

Incentivise the organisation in an effective manner

Manage the critical business operations on a daily and long-term basis

Which costs related to environmental hazards can have a significant negative impact on a company’s credit risk

Cost of hazardous waste clean-up

Cost of compliance with environmental laws

Cost of professional assessment of facilities for safety

What general inference can be made about a company that has positive cash flow from operations, and that is borrowing and investing

It is acquiring other companies

Which action by a borrower’s management could have an adverse effect on its cash flow and ability to meet its obligations

Executing plans to ensure short-term goals are met

Adopting a conservative financing strategy

Increasing the rate of depreciation resulting in reduced net income

Disclosing information to other stakeholders on need to know basis

MOODY'S QUIZ 1

Authored by baroda academy

Other

Professional Development

Used 79+ times

AI Actions

Add similar questions

Adjust reading levels

Convert to real-world scenario

Translate activity

More...

Content View
Student View

114 questions

Show all answers

MULTIPLE CHOICE QUESTION

1 min • 1 pt

which financial trigger can be set up internally as an early signal of a borrower’s probability of default

Change in profit projections

Change in ownership structure

Unexpected change in dividend policy

Emergence of new competitive entrants in the market

MULTIPLE CHOICE QUESTION

1 min • 1 pt

what is the difference between operating cash flow and earnings before interest, taxes, depreciation and amortization (EBITDA)

EBITDA considers interest expense

EBITDA considers capital expenditures

EBITDA considers changes in cash flow

EBITDA adds back depreciation and amortization

MULTIPLE CHOICE QUESTION

1 min • 1 pt

Which industry factor increases the need for a company to compete for a high volume of sales to remain profitable

High fixed costs

Few competitors

High switching costs

Rapid demand growth

MULTIPLE CHOICE QUESTION

1 min • 1 pt

which action might a company take when it is in the cash concern stage of financial distress

Selling vital assets

Cancelling bonuses

Laying off key employees.

Eliminating management positions

MULTIPLE CHOICE QUESTION

1 min • 1 pt

What does a current ratio of 1.33 indicate about a company’s current assets

Current assets are less than net working capital

Current assets are able to cover double the current liabilities

Very few current assets have been funded from current liabilities

A portion of current assets has been funded from long-term sources

MULTIPLE CHOICE QUESTION

1 min • 1 pt

In which condition can a local business perform well while the local economy is in recession

Local competition is weak

The business has a high profit margin

The business sells high quality and durable products

The local economy of business’s customers is thriving

MULTIPLE CHOICE QUESTION

1 min • 1 pt

Which is likely to be false of a company with a low gearing ratio

It has a high debt load

It has high interest costs

It has high repayment ability

It has a high repayment obligation

Access all questions and much more by creating a free account

Create resources

Host any resource

Get auto-graded reports

Continue with Google

Continue with Email

Continue with Microsoft

or continue with

Facebook

Apple

Others

By signing up, you agree to our Terms of Service & Privacy Policy

Already have an account?

Similar Resources on Wayground

110 questions

TO SKD 5 LENGKAP

Quiz

•

Professional Development

111 questions

Definition of Terms

Quiz

•

Professional Development

109 questions

DSC CHAPTER 1 to 4

Quiz

•

Professional Development

110 questions

Thi đợt 3 - 03

Quiz

•

Professional Development

113 questions

Jabatan Fungsional Pengembang Teknologi Pembelajaran Part 2

Quiz

•

Professional Development

113 questions

TEST DIFICIL 1

Quiz

•

Professional Development

109 questions

Ôn Tập Cuối Môn

Quiz

•

Professional Development

111 questions

Scrum

Quiz

•

University - Professi...

Popular Resources on Wayground

6 questions

PRIDE Always and Everywhere

Presentation

•

12th Grade

20 questions

Lab Safety Quiz

Quiz

•

6th Grade

26 questions

KOR Review Kahoot Questions

Quiz

•

8th Grade

21 questions

Continents and Oceans

Quiz

•

6th Grade

12 questions

Unit Zero lesson 2 cafeteria

Presentation

•

9th - 12th Grade

20 questions

Parts of Speech

Quiz

•

5th Grade

10 questions

Riddles Riddles fun Riddles

Quiz

•

6th - 12th Grade

16 questions

Subject & Predicate

Quiz

•

5th Grade

Discover more resources for Other

10 questions

Soup, Salad, or Sandwich?

Quiz

•

1st Grade - Professio...

20 questions

Employability Skills

Quiz

•

Professional Development

9 questions

How to Email your Teacher

Quiz

•

Professional Development

25 questions

2023 Pop Culture Trivia

Quiz

•

Professional Development

20 questions

Cinema Camera Angles

Quiz

•

9th Grade - Professio...

20 questions

Sports trivia

Quiz

•

Professional Development

21 questions

Shop Safety

Quiz

•

Professional Development

MOODY'S QUIZ 1

which financial trigger can be set up internally as an early signal of a borrower’s probability of default

what is the difference between operating cash flow and earnings before interest, taxes, depreciation and amortization (EBITDA)

Which industry factor increases the need for a company to compete for a high volume of sales to remain profitable

which action might a company take when it is in the cash concern stage of financial distress

What does a current ratio of 1.33 indicate about a company’s current assets

In which condition can a local business perform well while the local economy is in recession

Which is likely to be false of a company with a low gearing ratio

what information in a credit agency report can help a bank assess a company’s management integrity

What is the starting point in the process of projecting a business’s financial performance

What does the credit risk premium attributed to in the credit pricing process

Access all questions and much more by creating a free account

Similar Resources on Wayground

Popular Resources on Wayground

Discover more resources for Other