CTP CTP Cash Flow Management & Liquidity Solutions

Question 1

What is the primary purpose of a 13-week cash flow forecast in a turnaround situation?

Accepted Answer

To monitor near-term liquidity and identify cash shortfalls

Answer

To project annual revenue

Answer

To calculate EBITDA margins

Answer

To prepare audited financial statements

Question 2

Which term describes a court-approved arrangement permitting a debtor to use a secured lender's collateral cash during Chapter 11 proceedings?

Accepted Answer

Cash collateral order

Answer

DIP financing

Answer

Forbearance agreement

Answer

Pre-packaged plan

Question 3

What does 'burn rate' measure in a liquidity analysis?

Accepted Answer

The pace at which a company is depleting its cash reserves

Answer

The rate at which inventory is consumed

Answer

The speed of accounts receivable collection

Answer

The rate of debt amortization

Question 4

In a turnaround, accelerating accounts receivable collections is primarily aimed at:

Accepted Answer

Generating immediate cash inflows

Answer

Improving EBITDA

Answer

Reducing accounts payable balances

Answer

Increasing the current ratio

Question 5

What is 'stretching payables' in cash flow management?

Accepted Answer

Delaying payments to vendors beyond standard terms to conserve cash

Answer

Negotiating lower purchase prices with suppliers

Answer

Converting accounts payable to long-term debt

Answer

Factoring invoices to improve cash flow

Question 6

Which liquidity metric compares current assets to current liabilities to assess short-term solvency?

Accepted Answer

Current ratio

Answer

Quick ratio

Answer

Debt-to-equity ratio

Answer

Interest coverage ratio