Practice Test Geeks(CBC) Certified Business Coach Practice Test
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Financial Acumen & Business Finance Flashcards

7 cards from real CBC practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Financial Acumen & Business Finance flashcards as text

  1. A business coach is helping a client evaluate whether to invest in new equipment costing $50,000. The concept of 'Return on Investment (ROI)' is best described as:

    Answer: (Net Profit from Investment / Cost of Investment) × 100

    ROI measures the percentage return on an investment by dividing the net profit generated by the investment cost and multiplying by 100.

  2. When advising a client on business valuation, which method estimates a company's value based on its potential future earnings, discounted to present value?

    Answer: Discounted Cash Flow (DCF) Analysis

    Discounted Cash Flow analysis estimates business value by projecting future cash flows and discounting them to their present value using an appropriate discount rate.

  3. A client wants to understand their 'debt-to-equity ratio.' This metric primarily indicates:

    Answer: The proportion of business financing from debt versus owner equity

    The debt-to-equity ratio compares total liabilities to shareholders' equity, revealing the relative proportion of debt versus owner funding used to finance the business.

  4. When coaching a client through financial forecasting, which approach involves estimating future revenues based on a percentage of projected sales?

    Answer: Percentage-of-sales method

    The percentage-of-sales method forecasts financial statement items by applying historical percentage relationships to projected future sales figures.

  5. A business coach explains that EBITDA is commonly used to assess a company's operational performance. What does EBITDA stand for?

    Answer: Earnings Before Income, Taxes, Depreciation, and Amortization

    EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization, and is used to evaluate a company's core operating profitability.

  6. A client is concerned about pricing their services competitively while remaining profitable. The 'contribution margin' concept helps by showing:

    Answer: The amount each unit sold contributes to covering fixed costs and generating profit

    Contribution margin (price minus variable cost per unit) shows how much each unit sold contributes to covering fixed costs and ultimately generating profit.

  7. When helping a client read a balance sheet, which of the following correctly represents the fundamental accounting equation?

    Answer: Assets = Liabilities + Owners' Equity

    The fundamental accounting equation states that Assets equal Liabilities plus Owners' Equity, which is the foundation of the balance sheet.