CPFM Treasury Management and Cash Flow Forecasting

Question 1

Which primary function of treasury management ensures a company can meet its short-term obligations?

Accepted Answer

Liquidity management

Answer

Equity issuance

Answer

Depreciation scheduling

Answer

Tax deferral

Question 2

A company's 13-week cash flow forecast is BEST used for which purpose?

Accepted Answer

Short-term liquidity planning

Answer

Long-term capital budgeting

Answer

Equity valuation

Answer

Depreciation estimation

Question 3

Which instrument is MOST commonly used by treasury departments to invest short-term excess cash?

Accepted Answer

Money market instruments

Answer

Common stock

Answer

30-year Treasury bonds

Answer

Real estate investment trusts

Question 4

The difference between a company's cash inflows and outflows in a given period is called:

Accepted Answer

Net cash flow

Answer

Net present value

Answer

Operating leverage

Answer

Current ratio

Question 5

A centralized treasury structure offers which primary advantage over a decentralized one?

Accepted Answer

Netting of intercompany cash flows

Answer

Greater autonomy for subsidiaries

Answer

Higher foreign exchange exposure

Answer

Reduced oversight requirements

Question 6

Which metric measures how quickly a company converts its investments in inventory and accounts receivable into cash?

Accepted Answer

Cash conversion cycle

Answer

Return on equity

Answer

Debt-to-equity ratio

Answer

Price-earnings ratio