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

A 13-week cash flow forecast provides a short-term view of liquidity to identify and address cash gaps before they become critical.

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

A cash collateral order is a court-approved arrangement permitting a debtor to use a secured lender's cash collateral during Chapter 11 proceedings.

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

Burn rate measures how quickly a company is spending its available cash, which is critical for determining how long it can sustain operations.

Question 4

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

Accepted Answer

Generating immediate cash inflows

Answer

Accelerating collections converts outstanding receivables into cash faster, directly improving liquidity in a distressed situation.

Question 5

What is 'stretching payables' in cash flow management?

Accepted Answer

Delaying payments to vendors beyond standard terms to conserve cash

Answer

Stretching payables involves extending the time before paying vendors, preserving cash in the short term but potentially damaging supplier relationships.

CTP - Certified Turnaround Professional Practice Test

CTP - Certified Turnaround Professional Practice Test

CTP CTP Cash Flow Management & Liquidity Solutions