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AIWMI CCRA-L2 Exam - Topic 9 Question 110 Discussion

Actual exam question for AIWMI's CCRA-L2 exam
Question #: 110
Topic #: 9
[All CCRA-L2 Questions]

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 Indi

a. 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?

Show Suggested Answer Hide Answer
Suggested Answer: C

by Yoko at Apr 06, 2025, 09:12 PM

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Tamera
3 months ago
Comp Systems: 18 days, Big Tables: 32 days.
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Franklyn
3 months ago
I think D is the best choice, both indicators are saying different things.
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Yuriko
4 months ago
Totally agree, looks like they're more liquid.
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Frankie
4 months ago
Wait, but the Defense Interval Ratio tells a different story, right?
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Jamika
4 months ago
Comp Systems has a much better cash conversion cycle!
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Hildegarde
4 months ago
I think option D makes sense because it acknowledges both indicators, but I’m not completely confident. It’s tricky when the metrics seem to contradict each other.
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Leontine
5 months ago
This question reminds me of a practice question we did on liquidity ratios. I feel like I should lean towards option A, but I'm a bit confused about the Defense Interval Ratio.
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Chandra
5 months ago
I'm not entirely sure, but I think the Defense Interval Ratio might suggest something different. It could be that both indicators are telling us different things.
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Merrilee
5 months ago
I remember studying the cash conversion cycle and how a lower number indicates better liquidity, so I think Comp Systems is more liquid.
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Tula
5 months ago
I'm leaning towards option D. The cash conversion cycle suggests Comp Systems is more liquid, while the defense interval ratio indicates Big Tables manages its cash better. This seems like the most comprehensive and accurate conclusion based on the information provided.
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Jennie
5 months ago
Okay, let me think this through. Comp Systems has a shorter cash conversion cycle, which suggests it is more liquid. But Big Tables has a lower defense interval ratio, which also indicates better liquidity. I'm a bit confused on how to reconcile these two contradictory indicators.
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Elenora
5 months ago
The cash conversion cycle and defense interval ratio are both liquidity indicators, so I think the key is to analyze how they relate to each other for the two companies.
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Lavera
6 months ago
This question seems straightforward, but I want to make sure I understand the concepts of cash conversion cycle and defense interval ratio before selecting an answer.
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Brianne
10 months ago
I'm leaning towards option D as well. It's always a tricky balancing act between liquidity and cash management. Looks like Comp Systems and Big Tables have found different ways to approach it.
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Ashton
10 months ago
Wait, did someone spill coffee on the financial table? That's a real bummer. I hope Ms. Mary Brown didn't have to clean up too much of a mess before the meeting.
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Elli
9 months ago
Yeah, it looks like Big Tables manages its cash better though.
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Pete
9 months ago
According to the data, it seems like Comp Systems is more liquid than Big Tables.
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Leana
10 months ago
I know, right? Spilling coffee on important documents is the worst.
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Carri
10 months ago
Oh no, that must have been stressful for Ms. Mary Brown.
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In
10 months ago
Option D seems like the correct answer to me. Comp Systems has a better cash conversion cycle, but Big Tables manages its cash better according to the defense ratio.
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Filiberto
10 months ago
That's true. It's important to consider both indicators when assessing the liquidity of a company.
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Glenna
10 months ago
Yes, it makes sense. Comp Systems may be more liquid in terms of cash conversion cycle, but Big Tables seems to have better cash management.
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Callie
10 months ago
I agree, option D seems to be the most logical conclusion.
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Gennie
11 months ago
I'm not sure, but D does sound like a logical conclusion.
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Deandrea
11 months ago
I agree with Vicki, D seems to make sense.
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Maurine
11 months ago
I'm not sure about this one. The indicators seem to give contradictory results. I might have to go with option C.
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Scarlet
10 months ago
True, but Big Tables has a better Defense Interval Ratio, showing better cash management.
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Orville
10 months ago
But Comp Systems has a lower Cash Conversion Cycle, indicating better liquidity.
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Chanel
11 months ago
I agree, the indicators do seem to contradict each other.
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Beatriz
11 months ago
I think option C is the right choice here.
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Alisha
11 months ago
The question is pretty straightforward. The cash conversion cycle and defense interval ratio clearly show that Comp Systems is more liquid than Big Tables.
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Vicki
11 months ago
I think the answer is D.
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