Cash Flow Analysis Practice Exam

About Cash Flow Analysis
Cash flow is the amount of cash and cash equivalents, such as securities, that a business generates or spends over a set time period. Cash on hand determines a company’s runway—the more cash on hand and the lower the cash burn rate, the more room a business has to manoeuvre and, normally, the higher its valuation.

There are three cash flow types that companies should track and analyze to determine the liquidity and solvency of the business: cash flow from operating activities, cash flow from investing activities and cash flow from financing activities. All three are included on a company’s cash flow statement.

In conducting a cash flow analysis, businesses correlate line items in those three cash flow categories to see where money is coming in, and where it’s going out. From this, they can draw conclusions about the current state of the business.

Depending on the type of cash flow, bringing in money in isn’t necessarily a good thing. And, spending money it isn’t necessarily a bad thing.

Why is Cash Flow Analysis  important?
The cash flow report is important because it informs the reader of the business cash position. For a business to be successful, it must have sufficient cash at all times. It needs cash to pay its expenses, to pay bank loans, to pay taxes and to purchase new assets.

Advantages of a Cash Flow Statement
•    Verifying Profitability and Liquidity Positions.
•    Verifying Capital Cash Balance.
•    Cash Management.
•    Planning and Coordination.
•    Superiority over Accrual Basis of Accounting.

Who should take the Cash Flow Analysis Exam?
•    Finance or accounting professionals
•    Business owners
•    Entrepreneurs
•    Anyone who wants to assess their finance or accounting skills
•    Finance or accounting managers and senior executives
•    Finance or accounting consultants
•    Professionals working in outsourced companies responsible for cash flow
•    Anyone interested in cash flow analysis

Knowledge and Skills required for the Cash Flow Analysis

Specific skills are needed to excel in career of cash flow analysis which includes analytical bent of mind and quick learning skills.

Cash Flow Analysis Practice Exam Objectives

Cash Flow Analysis exam focuses on assessing your skills and knowledge in accounting basics, trial balance, balance sheet and cash flows.

Cash Flow Analysis Practice Exam Pre-requisite

There are no prerequisites for the Cash Flow Analysis exam.

Cash Flow Analysis Certification Course Outline

1. Basic Accounting Principles and Framework
1.1. Learning to Understand Accounting
1.2. Assumptions, Principles, and Conventions of Accounting
1.3. Global Standards for Accounting

2. The Accounting Equation and Financial Statements
2.1. The Accounting Equation
2.2. Double-entry, Debits, and Credits
2.3. Understanding Financial Statements

3. The Accounting Cycle and Accrual Accounting
3.1. The Accounting Cycle
3.2. Chart of Accounts
3.3. Cash and Accrual Accounting

4. Accounting Transactions and Books of Account
4.1. General Journals and Special Journals
4.2. General Ledgers and Subsidiary Ledgers
4.3. Posting Accounting Transactions

5. Trial Balance & Adjusting Entries
5.1. Trial Balances
5.2. Adjusting Entries
5.3. Making Adjusting Entries
5.4. Closing the Accounts

6. The Balance Sheet
6.1. Balance Sheet Components
6.2. Balance Sheet Preparation
6.3. Transactions Affecting the Balance Sheet
6.4. Balance Sheet Connections

7. Income Statement
7.1 Profit and Loss
7.2 Income Statement
7.3 Revenue
7.4 Operating Costs

8.  Statement of Cash Flow
8.1 Cash Flows
8.2 Creating and Finalizing the Statement

Exam Format and Information
Certification name – Cash Flow Analysis  Certification
Exam duration – 60 minutes
Exam type - Multiple Choice Questions
Eligibility / pre-requisite - None
Exam language - English
Exam format - Online
Passing score - 25
Exam Fees  - INR 1199