NACVA Exam CVA Topic 5 Question 65 Discussion

Actual exam question for NACVA's CVA exam

Question #: 65
Topic #: 5

[All CVA Questions]

Due to these complexities, for practical purposes it is acceptable to use the ratio as we defined it. However, the analyst is well advised to research:

Athe subject companies' use of short-term debt

Bthe guideline companies' use of short-term

CBoth the subject and guideline companies' use of short-term debt to determine whether to adjust this ratio to include all interest-bearing debt

DWhether to adjust this ratio to include all interest-bearing debt

Show Suggested Answer

Suggested Answer: B

by Jolene at Mar 01, 2023, 12:22 AM

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Louvenia

1 months ago

I'm leaning towards option C, but I also like the idea of adjusting the ratio to include all interest-bearing debt. Decisions, decisions...

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Louann

1 months ago

Option C is the way to go. Gotta do your homework on the debt levels of both companies. Can't just rely on the ratio as defined.

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Roosevelt

1 months ago

I was about to choose option D, but Amber's explanation makes a lot of sense. I'll go with option C.

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Ronny

1 days ago

Amber's explanation really helped clarify things for me too.

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Mitzie

9 days ago

I agree, considering both subject and guideline companies' use of short-term debt is important.

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Stacey

28 days ago

I think option C is the best choice here.

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Alease

2 months ago

I agree with Amber. Considering the short-term debt for both sets of companies is crucial to make an informed decision.

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Giovanna

28 days ago

I believe analyzing all interest-bearing debt will give us a clearer picture of the financial health of these companies.

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Blair

1 months ago

Agreed. It's important to have a comprehensive view before making any adjustments to the ratio.

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Jenifer

1 months ago

I think we should definitely consider both the subject and guideline companies' use of short-term debt.

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Amber

2 months ago

Option C makes the most sense to me. We need to analyze the short-term debt usage of both the subject and guideline companies to determine if an adjustment is necessary.

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