Financial Quiz

How many days is the short-term financing gap for a company with 47 trade receivables days, 68 inventory days and 63 trade payables days?

• 42

• 52

• 84

• 178

A company has INR 11,304,950 in Cost of Goods Sold (COGS) and INR 1,091,070 in trade payables as of its most recent fiscal year-end. The company claimed no depreciation in COGS. How many days on average did it take this company to pay its trade creditors during the fiscal year?

• 9

• 10

• 35

• 38

Titan Ltd. is a lumber exporter with annual sales of INR 750,000, 45 inventory days, 35 trade receivables days, and 40 trade payables days. What approximate amount of external financing will Titan Ltd. need to support its operating cycle?

• a) INR 61,644

• b) INR 82,192

• c) INR 102,740

• d) INR 246,575

How does industry risk affect the credit risk of a particular business enterprise that operates within that industry?

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

• a)Opinion about the company management.

• b)Information about the financial performance.

• c)How freely the management shares information.

• d)Details on covenant compliance for the bank loans.

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

• a)Evaluate economic factors.

• b)Complete sensitivity analysis.

• c)Project future values for the risk drivers.

• d)Review historic levels of the risk drivers.

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

• a)Change in profit projections.

• b)Change in ownership structure.

• c)Unexpected change in dividend policy.

• d)Emergence of new competitive entrants in the market.

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

• Set the strategic direction

• Source the necessary resources

• Incentivise the organisation in an effective manner

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

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

• a)Local competition is weak.

• b)The business has a high profit margin.

• c)The business sells high quality and durable products.

• d)The local economy of business’s customers is thriving.

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

• 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

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