Certified Credit Research Analyst Practice Test



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CCRA-L2
Certified Credit Research Analyst (CCRA Level 2)
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Question: 14
Following is information related banks:
Auckland Ltd is a public sector bank operating with about 120 branches across India. The bank has been in business
since 1971 and has about 40% branches in rural areas and about 75% of all branches are in
Western India. On the basis of the size, Auckland Ltd will be ranked at number 31 amongst 40 banks in India.
Although top management has appointment period of 5 years, generally they retire on ach sieving age of 60 years with
an average tenure of only 2 years at the top job.
Profit and Loss Account
Balance Sheet
The rating wise break-up of assets for FY11 is as follows:
Computer risk weighted assets for Auckland Ltd for FY11:
A. 10,10,000 Million
B. 13,24,500 Million
C. 11,64,500 Million
D. 11,60,000 Million
Answer: C
Question: 15
Following is information related banks:
Auckland Ltd is a public sector bank operating with about 120 branches across India. The bank has been in business
since 1971 and has about 40% branches in rural areas and about 75% of all branches are in
Western India. On the basis of the size, Auckland Ltd will be ranked at number 31 amongst 40 banks in India.
Although top management has appointment period of 5 years, generally they retire on ach sieving age of 60 years with
an average tenure of only 2 years at the top job.
Profit and Loss Account
Balance Sheet
The rating wise break-up of assets for FY11 is as follows:
During which year amongst the three, was the overall financial profile of bank most string?
A. No change in three years
B. FY13
C. FY11
D. FY12
Answer: B
Question: 16
Ms. Mary Brown is a credit rating analyst. She had prepared a detailed report on one of her client, FlyHigh
Airlines Ltd, a company operating chartered aircrafts in India. As she was heading for a meeting with her superior on
the matter, coffee spilled over her set of prepared paper(s). As she was getting late for meeting, instead of preparing
entire set she could recollect few numbers from her memory and reconstructed following partial financial table:
An analyst comparing two competitors Comp Systems and Big Tables gathers the data below:
Cash Conversions Cycle:
Comp Systems: 18 days and Big Tables 32 days
Defense Interval Ratio:
Comp Systems: 50 and Big Tables: 20
What can the analyst conclude regarding the liquidity of these companies?
A. Both indicators suggest that Comp Systems is more liquid than Big Tables
B. Both indicators suggest that Big Tables manages it/s cash better than Comp Systems
C. Both indicators deliver contradictory results
D. While Comp Systems is more liquid as per the Cash conversion cycle, Big Tables manages its cash better as
indicated by a lower, hence better Defense Ratio
Answer: C
Question: 17
Ms. Mary Brown is a credit rating analyst. She had prepared a detailed report on one of her client, FlyHigh Airlines
Ltd, a company operating chartered aircrafts in India. As she was heading for a meeting with her superior on the
matter, coffee spilled over her set of prepared paper(s). As she was getting late for meeting, instead of preparing entire
set she could recollect few numbers from her memory and reconstructed following partial financial table:
What is Total Income FY10 and FY12?
A. FY10: INR400 Million; FY12:INR575 Million
B. FY10: INR525.56 Million; FY12: INR755.49 Million
C. Insufficient Information to compute
D. FY10: INR656.94 Million; FY12: INR821.18 Million
Answer: A
Question: 18
Ms. Mary Brown is a credit rating analyst. She had prepared a detailed report on one of her client, FlyHigh
Airlines Ltd, a company operating chartered aircrafts in India. As she was heading for a meeting with her superior on
the matter, coffee spilled over her set of prepared paper(s). As she was getting late for meeting, instead of preparing
entire set she could recollect few numbers from her memory and reconstructed following partial financial table:
Compute growth in PAT for FY12?
A. 25%
B. 19%
C. 22%
D. 21%
Answer: A
Question: 19
Ms. Mary Brown is a credit rating analyst. She had prepared a detailed report on one of her client, FlyHigh
Airlines Ltd, a company operating chartered aircrafts in India. As she was heading for a meeting with her superior on
the matter, coffee spilled over her set of prepared paper(s). As she was getting late for meeting, instead of preparing
entire set she could recollect few numbers from her memory and reconstructed following partial financial table:
PAT margins are highest in which of the years?
A. FY12
B. FY11
C. FY10
D. Equal in FY10 and FY12
Answer: A
Question: 20
Ms. Mary Brown is a credit rating analyst. She had prepared a detailed report on one of her client, FlyHigh
Airlines Ltd, a company operating chartered aircrafts in India. As she was heading for a meeting with her superior on
the matter, coffee spilled over her set of prepared paper(s). As she was getting late for meeting, instead of preparing
entire set she could recollect few numbers from her memory and reconstructed following partial financial table:
Compute Interest for FY10 and FY12?
A. Insufficient Information to compute
B. FY10: INR50.53 Million; FY12:INR81.38 Million
C. FY10: INR161.71 Million; FY12: INR252.27 Million
D. FY10: INR17.47 Million; FY12:INR782.03 Million
Answer: A
Question: 21
�Following four entities operate in the Indian IT and BPO space. They all are into same segment of providing off-
shore analytical services. They all operate on the labour cost-arbitrage in India and the countries of their clients.
Following information pertains for the year ended March 31, 2013.
The year FY13, was typically a good year for Indian IT companies. For FY14, the economic analysts have given
following predictions about the IT Industry:
A) It is expected that INR will appreciate sharply against other USD.
B) Given high inflation and attrition in IT Industry in India, the wages of IT sector employees will increase more
sharply than Inflation and general wage rise in country.
C) US Congress will be passing a bill which restricts the outsourcing to third world countries like India.
While analyzing the four entities, you come across following findings related to Glowing:
Glowing is promoted by Mr.M R Bhutta, who has earlier promoted two other business ventures, He started with ABC
Entertainment Ltd in 1996 and was promoter and MD of the company. ABC was a listed entity and
its share price had sharp movements at the time of stock market scam in late 1990s. In 1999, Mr.Bhutta sold his entire
stake and resigned from the post of MD. The stock price declined by about 90% in coming days and has never
recovered. Later on in 2003, Mr.Bhutta again promoted a new business, Klear Publications Ltd (KCL) an in the
business of magazine publication. The entity had come out with a successful IPO and raised money from public.
Thereafter it ran into troubles and reported losses. In 2009, Mr.Bhutta went on to exit this business as well by selling
stake to other promoter(s). There have been reports in both instances with allegations that promoters have siphoned off
money from listed entities to other group entities, however, nothing has been proved in any court.�
Which of the following risks do not exist for Indian IT industry?
A. Raw material price risk, Exchange rate Risk
B. Interest rate risk, Skilled Manpower Risk
C. Exchange Rate Risk, Interest rate risk
D. Domestic and international regulatory risk, technological risk
Answer: B
Question: 22
�Following four entities operate in the Indian IT and BPO space. They all are into same segment of providing off-
shore analytical services. They all operate on the labour cost-arbitrage in India and the countries of their clients.
Following information pertains for the year ended March 31, 2013.
The year FY13, was typically a good year for Indian IT companies. For FY14, the economic analysts have given
following predictions about the IT Industry:
A) It is expected that INR will appreciate sharply against other USD.
B) Given high inflation and attrition in IT Industry in India, the wages of IT sector employees will increase more
sharply than Inflation and general wage rise in country.
C) US Congress will be passing a bill which restricts the outsourcing to third world countries like India.
While analyzing the four entities, you come across following findings related to Glowing:
Glowing is promoted by Mr.M R Bhutta, who has earlier promoted two other business ventures, He started with ABC
Entertainment Ltd in 1996 and was promoter and MD of the company. ABC was a listed entity and its share price had
sharp movements at the time of stock market scam in late 1990s. In 1999, Mr. Bhutta sold his entire stake and resigned
from the post of MD. The stock price declined by about 90% in coming days and
has never recovered. Later on in 2003, Mr. Bhutta again promoted a new business, Klear Publications Ltd (KCL) an in
the business of magazine publication. The entity had come out with a successful IPO and raised money from public.
Thereafter it ran into troubles and reported losses. In 2009, Mr. Bhutta went on to exit this business as well by selling
stake to other promoter(s). There have been reports in both instances with allegations that promoters have siphoned off
money from listed entities to other group entities, however, nothing has been proved in any court.�
Which entity is best in terms of overall gearing ratio and net gearing ratio respectively:
A. Glowing and Beautiful
B. Handsome and Handsome
C. Glamorous and Glowing
D. Glamorous and Glamorous
Answer: C
Question: 23
�Following four entities operate in the Indian IT and BPO space. They all are into same segment of providing off-
shore analytical services. They all operate on the labour cost-arbitrage in India and the countries of their clients.
Following information pertains for the year ended March 31, 2013.
The year FY13, was typically a good year for Indian IT companies. For FY14, the economic analysts have given
following predictions about the IT Industry:
A) It is expected that INR will appreciate sharply against other USD.
B) Given high inflation and attrition in IT Industry in India, the wages of IT sector employees will increase more
sharply than Inflation and general wage rise in country.
C) US Congress will be passing a bill which restricts the outsourcing to third world countries like India.While
analyzing the four entities, you come across following findings related to Glowing:
Glowing is promoted by Mr.M R Bhutta, who has earlier promoted two other business ventures, He started with ABC
Entertainment Ltd in 1996 and was promoter and MD of the company. ABC was a listed entity and its share price had
sharp movements at the time of stock market scam in late 1990s. In 1999, Mr.Bhutta sold his entire stake and resigned
from the post of MD. The stock price declined by about 90% in coming days and has never recovered. Later on in
2003, Mr.Bhutta again promoted a new business, Klear Publications Ltd (KCL) an in the business of magazine
publication. The entity had come out with a successful IPO and raised money from public. Thereafter it ran into
troubles and reported losses. In 2009, Mr.Bhutta went on to exit this business as well by selling stake to other
promoter(s). There have been reports in both instances with allegations that promoters have siphoned off money from
listed entities to other group entities, however, nothing has been proved in any court.�
Based solely on Total Debt to EBITDA and Interest Coverage, which of the four entities is best amongst the four
respectively:
A. Glamorous and Glamorous
B. Glamorous and Glowing
C. Glowing and Beautiful
D. Glamorous and Glamorous
Answer: B
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