Practice Set - 2 | Practice Set | NISM Series XV: Research Analyst Certification Examination

Question 1

If debtor days increase while sales remain stable, the likely concern is:

Question 2

A business with recurring subscription revenue often deserves premium valuation because:

Question 3

A company with strong reported profits but constant equity dilution should make investors examine:

Question 4

A company with negative free cash flow is always a bad investment.

Question 5

A company with strong brand value but weak free cash flow should be assumed safe.

Question 6

A company with very high inventory growth but flat revenue should make analysts question:

Question 7

A company shows rising EPS mainly because the number of shares outstanding has fallen. The analyst should verify:

Question 8

A business heavily dependent on one customer faces major:

Question 9

A company with stable profits but declining operating cash flow over time may be facing:

Question 10

Which of the following best reflects aggressive revenue recognition risk?

Question 11

Which of the following most likely improves free cash flow?

Question 12

Which statement is true regarding working capital?

Question 13

Which of the following would most likely reduce return on capital employed (ROCE)?

Question 14

A company reports strong net profit growth, but operating cash flow remains weak for three consecutive years. What should concern the analyst most?

Question 15

If return ratios improve mainly because equity base shrank after losses, the improvement should be viewed:

Question 16

A company generating profit mainly from one-time asset sales should be viewed:

Question 17

Which ratio is most useful for evaluating debt repayment capacity from operations?

Question 18

If a company repeatedly funds dividends through borrowing, it most likely indicates:

Question 19

Higher EBITDA does not always mean stronger business quality because:

Question 20

Which of the following most strongly improves capital efficiency?

Question 21

A company consistently buying back shares while debt is rising should make analysts ask:

Question 22

Which of the following best indicates strong earnings quality?

Question 23

A company with low debt but poor governance should still be treated cautiously because:

Question 24

A rapidly growing company with negative profits but improving operating leverage may still be attractive if:

Question 25

Financial statements should be accepted exactly as reported without checking notes to accounts.

Question 26

A falling current ratio over several years may indicate:

Question 27

Which statement is correct regarding goodwill on the balance sheet?

Question 28

Which statement is true regarding depreciation?

Question 29

Which statement is correct regarding promoter holding?

Question 30

If operating margins rise but market share falls sharply, analysts should check:

Question 31

Which of the following is the strongest sign of pricing power?

Question 32

A sudden jump in other income contributing most of total profit should make analysts review:

Question 33

If management frequently changes accounting policies that boost profits, analysts should be cautious about:

Question 34

Which statement is correct regarding capital expenditure?

Question 35

A company with low profit margins but very high asset turnover may still generate strong:

Question 36

Which of the following best signals management integrity?

Question 37

The best company can still become a poor investment if purchased at an unreasonable price.

Question 38

Promoter share pledging should always be ignored if profits are growing.

Question 39

Which statement is true regarding Return on Equity (ROE)?

Question 40

Practice Set - 2