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12/11/23, 11:58 AM Take Test: Diagnostic Test – Understanding the Client's ...

Take Test: Diagnostic Test – Understanding the Client's Business Needs

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Multiple Attempts Not allowed. This test can only be taken once.
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QUESTION 1
What kind of computer database do credit bureaus usually compile an individual’s credit information from? 1 points Save

a. Local database.
b. Provincial database.
c. National database. 1 points Save
d. International database.
e. I am not sure.
QUESTION 2
What is the initial source you would use to validate your client information?
a. The credit bureau.
b. The client.
c. The client’s bank. 1 points Save
d. The Better Business Bureau.
e. I am not sure.
QUESTION 3
Joan owns an upscale dress shop in the village. She is trying to figure out how many times a year her inventory is sold and replaced. If last year her sales were $1 million, cost o
$400,000, ending inventory $100,000, accounts receivable of $50,000, what would be her inventory turnover for the year?
a. Inventory turnover is 4 times a year.
b. Inventory turnover is 10 times a year.
1 points Save
c. Inventory turnover is 2.67 times a year.
d. Inventory turnover is 8.67 times a year.
e. I am not sure.
QUESTION 4
What does “operating performance” measure?
a. The production levels of the company.
b. The utilization of plant and equipment.
c. The cash flow of a company. 1 points Save
d. How well a business is doing.
e. I am not sure.
QUESTION 5
LGD, or Loss Given Default, measures the total loss suffered by a financial institution if a client defaults on a loan. Big Bank gives your company a $1 million operating loan, and
you pledge your company’s accounts receivable. If you were forced to close the business, and still had $1.25 million in accounts receivable, of which 25% were bad debts, how m
Big Bank expect its LGD to be?
a. LGD of $0
1 points Save
b. LGD of $62,500
c. LGD of $250,000
d. LGD of $187,500
e. I am not sure.
QUESTION 6
Jim operates a commercial landscaping business. He wants to know how often his accounts receivables are turned into cash in a year. If his business has annual sales of $1.6 m
of $100,000, work in process of $100,000, and year-end accounts receivables of $200,000, what is his accounts receivable turnover for the year?
a. A/R Turnover of 5.33 times a year.
b. A/R Turnover of 8 times a year.
1 points Save
c. A/R Turnover of 8.75 times a year.
d. A/R Turnover of 9 times a year.
e. I am not sure.
QUESTION 7
Curly, Larry, and Bo all come to you for a loan. Curly has a credit score of 390, Larry has a credit score of 710, and Bo has a credit score of 820. Which of them have credit score
suggest they are good risks?
a. Curly and Bo.
b. Bo.
1 points Save
c. Larry.
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d. Larry and Bo.
e. I am not sure.
QUESTION 8

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12/11/23, 11:58 AM Take Test: Diagnostic Test – Understanding the Client's ...

If a company has a “working capital” deficiency, what does it say about the company?
a. It is more concerned about the long term.
b. It is in the growth stage of development.
c. It is not being efficiently run. 1 points Save
d. It is in a capital intensive industry.
e. I am not sure.
QUESTION 9
What are the components that make up the three-part approach to a client meeting?
a. People, financials, and key employees.
b. Business, people, and financials.
c. Business, financials, and history. 1 points Save
d. People, business, and forecasts.
e. I am not sure.
QUESTION 10
How does the flow of conversation normally move in the three-part approach to a client meeting?
a. Financials to business to people.
b. Financials to people to business.
c. People to business to financials. 1 points Save
d. Business to financials to people.
e. I am not sure.
Q U E S T I O N 11
What 3 documents are used to help you identify your client’s business needs?
a. Balance Sheet, Profit and Loss Statement, Business Plan.
b. Balance Sheet, Cash Flow Statement, Business Plan.
c. Balance Sheet, Company Charter, Business Plan. 1 points Save
d. Profit and Loss Statement, Business Plan, Company Charter.
e. I am not sure.
QUESTION 12
What information does a balance sheet provide?
a. Assets, Equity, and Liabilities over a period of time.
b. Assets, Equity, and Liabilities at a specific point in time.
c. Assets, Equipment, and Liabilities over a period of time.
d. Assets, Equipment, and Liabilities at a specific point in time.
e. I am not sure.

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