Financial Analysis & Reporting Flashcards
7 cards from real CFP 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 Analysis & Reporting flashcards as text
A fintech company capitalizes software development costs under ASC 350-40 during the application development stage. Which cost would NOT be capitalized?
Answer: Preliminary project-stage research and feasibility analysis
Costs incurred during the preliminary project stage, including feasibility analysis and research, must be expensed as incurred under ASC 350-40.
A neobank's efficiency ratio is 72%. How should this metric be interpreted?
Answer: The bank spends $0.72 to generate $1 of revenue
The efficiency ratio measures operating expenses as a proportion of revenue; a lower ratio indicates better operational efficiency.
When a fintech acquires a competitor, goodwill is recorded on the balance sheet as the:
Answer: Excess of purchase price over the fair value of net identifiable assets acquired
Goodwill equals the acquisition purchase price minus the fair value of all identifiable net assets (assets minus liabilities) of the acquired entity.
In analyzing a digital payment company, the 'interchange revenue' line item represents fees paid by:
Answer: Merchants to the card-issuing bank on each card transaction
Interchange fees are paid by the merchant's acquiring bank to the cardholder's issuing bank on every card transaction.
A regtech company performing transaction monitoring for AML purposes categorizes suspicious activity using which financial analysis tool?
Answer: Threshold-based rules combined with behavioral analytics
AML transaction monitoring uses rule-based thresholds alongside machine learning behavioral analytics to flag suspicious patterns.
A fintech startup's income statement shows Revenue of $5M, COGS of $1.5M, and Operating Expenses of $4M. What is the Operating Loss?
Answer: -$500,000
Gross Profit = $5M - $1.5M = $3.5M; Operating Loss = $3.5M - $4M = -$500,000.
Under SEC Regulation S-X, a publicly listed fintech must file audited financial statements within how many days after fiscal year-end (large accelerated filer)?
Answer: 60 days
Large accelerated filers must file their annual Form 10-K with audited financials within 60 days of fiscal year-end under SEC rules.