By Fred Butterfield, CTP
When you’re preparing for an exam, there’s always going to be that fear that the information provided to you on the test won’t be sufficient. And if that happens, it doesn’t matter how much you’ve studied; it’s going to be incredibly difficult to come up with the correct answer.
Fortunately, when it comes to AFP’s CTP Exam, you don’t need to have such worries.
The questions asked on the CTP Exam will always have all of the necessary information to derive the solution. AFP has every question reviewed by multiple people to make sure that everything the participant needs to determine the answer is presented. Many times, there may be more information presented than what is needed. In some questions, it is not unusual to have the result of one calculation being required for the solution of the calculation for the answer. In other words, the participant may need to do a simple calculation in order and use that answer in another calculation to find the answer to the exam question.
A simple example to illustrate this could be a question about Days of Working Capital (DWC). The formula to calculate DWC is Days Sales in Inventory (DSI) + Days Sales Outstanding (DSO) – Days Payables (DP). The information provided could easily be the actual DSI and DP factors, but instead of presenting the DSO factor, the information would include the average accounts receivable balance and the daily credit sales for the period. The participant would have to calculate DSO to determine the factor, then use that factor in the calculation of DWC.
The most important thing to remember is that all of the information the participant needs to derive an answer to the question is presented with the question. If you are looking at a question and thinking that the information you need to figure out the answer is not there, back up a step, reread the information, and look for the stuff you can use to derive the piece you think is missing. It will be there somewhere, you just have to find it.
This is very applicable to the real world because, when you are trying to resolve a situation or answer a question, you very often don’t get the information you need in the form you need it and will have to build it yourself.
Fred Butterfield, CTP, is a treasury manager based in Denver.