CVE Venue Financial Management 3

Question 1

A venue's accounts receivable days outstanding increases from 25 to 45 days. This change most likely indicates:

Accepted Answer

Slower collection of invoices

Answer

A higher days-outstanding figure means the venue is taking longer to collect payments, which can strain cash flow.

Question 2

What is the purpose of a capital expenditure (CapEx) budget for a venue?

Accepted Answer

To plan major asset purchases and long-term investments

Answer

A CapEx budget plans for significant purchases like equipment, renovations, or technology that provide long-term value beyond a single accounting period.

Question 3

Which financial ratio measures a venue's ability to pay short-term obligations with its most liquid assets?

Accepted Answer

Quick ratio

Answer

The quick ratio (cash + receivables ÷ current liabilities) measures liquidity using only the most liquid assets, excluding inventory.

Question 4

A venue generates $1.2M in annual revenue and has $180,000 in net profit. What is the net profit margin?

Accepted Answer

15%

Answer

Net profit margin = Net profit ÷ Revenue = $180,000 ÷ $1,200,000 = 15%.

Question 5

In venue contract negotiations, a 'minimum guarantee' clause primarily protects:

Accepted Answer

The venue from event cancellations

Answer

A minimum guarantee ensures the venue receives a baseline revenue payment regardless of actual event attendance or consumption.

(CVE) Certified Venue Executive Practice Test

(CVE) Certified Venue Executive Practice Test

CVE Venue Financial Management 3