Practice Test Geeks(CCM) Certified Cash Manager Practice Test
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Cash Forecasting and Liquidity Management Flashcards

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

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  1. Which cash forecasting method relies on historical cash flow data to project future cash needs using statistical techniques such as moving averages?

    Answer: Quantitative method

    The quantitative method uses historical data and statistical techniques like moving averages or regression analysis to forecast future cash flows.

  2. A company's operating cash cycle is 45 days. If daily revenues are $500,000, what is the approximate cash tied up in the operating cycle?

    Answer: $22,500,000

    Cash tied up = daily revenues × operating cycle days = $500,000 × 45 = $22,500,000.

  3. Which liquidity ratio measures a company's ability to meet short-term obligations using only its most liquid assets, excluding inventory?

    Answer: Quick ratio

    The quick ratio (acid-test ratio) measures liquidity using cash, marketable securities, and receivables—excluding inventory and prepaid expenses.

  4. In cash forecasting, what does the 'direct method' primarily track to project future cash positions?

    Answer: Actual cash receipts and disbursements

    The direct method forecasts cash by tracking expected actual cash inflows (receipts) and outflows (disbursements) transaction by transaction.

  5. A cash manager notices a consistent weekly pattern of higher disbursements on Fridays. This is best addressed through which forecasting enhancement?

    Answer: Day-of-week adjustment

    Day-of-week adjustments account for systematic intra-week patterns in cash flows, such as higher payroll disbursements on specific days.

  6. Which of the following best defines 'liquidity risk' in the context of treasury management?

    Answer: The risk that a firm cannot meet its short-term financial obligations

    Liquidity risk is the risk that a company will be unable to meet its short-term cash obligations when they come due.

  7. A rolling 13-week cash forecast is considered a best practice because it:

    Answer: Provides a one-quarter forward view updated weekly for near-term precision

    A 13-week rolling forecast covers approximately one quarter and is updated weekly, balancing near-term accuracy with sufficient planning horizon.