Practice Test Geeks(CCM) Certified Cash Manager Practice Test
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Financial Management & Budgeting Flashcards

7 cards from real CCM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Financial Management & Budgeting flashcards as text

  1. A company's days sales outstanding (DSO) increased from 35 to 52 days. What is the most likely financial impact?

    Answer: Increased working capital requirements

    A rising DSO means cash is tied up longer in receivables, increasing the amount of working capital the company must fund.

  2. Which budgeting method sets all budget line items to zero and requires justification for every dollar requested?

    Answer: Zero-based budgeting

    Zero-based budgeting starts from zero each period and requires managers to justify every expenditure rather than adjusting prior-year figures.

  3. A credit manager is evaluating a customer with a current ratio of 0.8. What does this indicate?

    Answer: The company may struggle to meet short-term obligations

    A current ratio below 1.0 means current liabilities exceed current assets, signaling potential difficulty meeting short-term obligations.

  4. Under a flexible budget, what happens to the budgeted fixed costs when actual production volume exceeds the planned level?

    Answer: They remain unchanged

    Fixed costs by definition do not change with production volume, so they remain constant in a flexible budget regardless of actual output.

  5. A company's EBITDA is $5 million and its total debt is $20 million. What is the debt-to-EBITDA ratio?

    Answer: 4.0

    Debt-to-EBITDA = $20M ÷ $5M = 4.0, indicating the company would need 4 years of EBITDA to repay its debt.

  6. Which type of cost remains constant per unit but changes in total as production volume changes?

    Answer: Variable cost

    Variable costs are constant per unit produced, so the total variable cost rises or falls directly with changes in production volume.

  7. A credit department is preparing a cash budget for Q3. Which item should NOT be included in the cash receipts section?

    Answer: Accrued interest income not yet received

    A cash budget records only actual cash flows; accrued income that has not yet been received in cash is excluded.