CAM Financial Analysis and Reporting 2

Question 1

A property has a Gross Potential Rent (GPR) of $500,000 and collects $460,000 in actual rent. What is the collection loss percentage?

Accepted Answer

8%

Answer

Collection loss = (GPR - Actual Rent) / GPR = $40,000 / $500,000 = 8%.

Question 2

Which financial metric best measures how efficiently a property converts revenue into net operating income?

Accepted Answer

Operating expense ratio

Answer

The operating expense ratio (total expenses / gross income) measures how efficiently revenue is converted to NOI.

Question 3

On a property income statement, 'concessions' are best classified as:

Accepted Answer

A reduction to gross potential rent

Answer

Concessions (e.g., free rent periods) reduce effective gross income and are recorded as a deduction from GPR.

Question 4

A manager notices the utility expense line is 20% over budget midyear. The FIRST corrective step should be to:

Accepted Answer

Investigate the cause of the variance before taking action

Answer

Investigating the root cause first ensures the correct corrective action is taken rather than masking the problem.

Question 5

Which document provides a forward-looking projection of all expected income and expenses for a 12-month period?

Accepted Answer

Annual operating budget

Answer

The annual operating budget projects anticipated income and expenses for the upcoming fiscal year.

(CAM) Certified Apartment Manager Practice Test