CIRA Cash Flow Management & Liquidity Analysis

Question 1

In a distressed company, which cash flow statement format is most useful for short-term liquidity monitoring during a restructuring?

Accepted Answer

13-week rolling cash flow forecast

Answer

Indirect method operating cash flow

Answer

Annual free cash flow projection

Answer

Discounted cash flow analysis

Question 2

Which of the following best describes 'Debtor-in-Possession' (DIP) financing?

Accepted Answer

Post-petition financing that typically receives super-priority status

Answer

Pre-petition secured debt converted to equity

Answer

Unsecured debt issued before bankruptcy filing

Answer

Bridge financing provided by existing equity holders

Question 3

When preparing a 13-week cash flow forecast, which item is typically classified as a disbursement rather than a receipt?

Accepted Answer

Vendor payments for critical goods

Answer

Collection of accounts receivable

Answer

Asset sale proceeds

Answer

Insurance reimbursements

Question 4

A distressed company has $2M in available cash, $500K in weekly operating disbursements, and no additional liquidity sources. What is its approximate liquidity runway?

Accepted Answer

4 weeks

Answer

1 week

Answer

2 weeks

Answer

8 weeks

Question 5

Which of the following is NOT typically included in a 'minimum cash balance' requirement in a DIP credit agreement?

Accepted Answer

Equity distribution to shareholders

Answer

Operating reserve for payroll

Answer

Liquidity buffer for unexpected expenses

Answer

Compliance threshold for covenant compliance

Question 6

What is 'cash collateral' in the context of a Chapter 11 case?

Accepted Answer

Cash or cash equivalents subject to a secured creditor's lien

Answer

Unencumbered cash available for unrestricted use

Answer

Post-petition cash generated from new operations

Answer

Escrowed funds held by the court

Question 7

In a cash flow waterfall analysis for a distressed company, which payment category is typically funded last?

Accepted Answer

Equity distributions

Answer

DIP lender debt service

Answer

Critical vendor payments

Answer

Professional fees (restructuring advisors)