CFP Financial Analysis & Reporting 2

Question 1

A fintech firm uses API-based open banking data to calculate a borrower's Debt-Service Coverage Ratio (DSCR). Which formula correctly expresses DSCR?

Accepted Answer

Net Operating Income / Annual Debt Service

Answer

DSCR is calculated as Net Operating Income divided by Annual Debt Service, measuring cash flow available to cover debt obligations.

Question 2

When a neobank reports its Tier 1 Capital Ratio, which component is excluded from Tier 1 capital under Basel III?

Accepted Answer

Subordinated long-term debt

Answer

Subordinated long-term debt qualifies as Tier 2 capital, not Tier 1, under Basel III's capital hierarchy.

Question 3

A payment processor reports a monthly gross payment volume (GPV) of $500M with a take rate of 2.2%. What is its net revenue before processing costs?

Accepted Answer

$11 million

Answer

$500M × 2.2% = $11 million in net revenue before subtracting interchange and processing costs.

Question 4

In fintech financial reporting, 'cohort analysis' of customer lifetime value (LTV) is best used to assess which of the following?

Accepted Answer

Long-term profitability of customer groups acquired in the same period

Answer

Cohort LTV analysis groups customers by acquisition period to track long-term revenue and profitability trends over time.

Question 5

A robo-advisor platform must disclose its expense ratio in client reports. The expense ratio is calculated as:

Accepted Answer

Total fund expenses / Average net assets under management

Answer

The expense ratio equals total fund expenses divided by average net assets, expressed as a percentage.

(CFP) Certified Fintech Practitioner Practice Test