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AIWMI CCRA-L2 Exam - Topic 8 Question 128 Discussion

Ms. Mary Brown is a credit rating analyst. She had prepared a detailed report on one of her client, FlyHighAirlines 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 daysDefense Interval Ratio:Comp Systems: 50 and Big Tables: 20What can the analyst conclude regarding the liquidity of these companies?
C) Both indicators give contradictory results
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
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

AIWMI CCRA-L2 Exam - Topic 8 Question 128 Discussion

Actual exam question for AIWMI's CCRA-L2 exam
Question #: 128
Topic #: 8
[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 Krissy at Jun 21, 2026, 11:46 AM

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Isidra
26 days ago
I lean towards C. The results seem contradictory to me.
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Giovanna
1 month ago
I feel like D makes sense too. Different indicators, different insights.
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Salena
1 month ago
I think A is correct. Comp Systems is definitely more liquid.
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Kristian
1 month ago
Definitely A, those numbers are pretty clear-cut!
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Joni
2 months ago
I think option D makes the most sense, both have their strengths.
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Nan
2 months ago
Wait, but does the defense ratio really mean better cash management?
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Gretchen
2 months ago
Totally agree, Comp Systems looks way more liquid.
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Jamal
2 months ago
Comp Systems has a better cash conversion cycle for sure!
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Kristal
2 months ago
I feel like I might be mixing things up, but I think the defense interval ratio being lower for Big Tables means they manage cash better? So maybe option D is correct?
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Sol
2 months ago
This question reminds me of a practice question where we analyzed liquidity ratios. I think option A makes sense because Comp Systems has a better cash conversion cycle.
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Myong
3 months ago
I’m not entirely sure, but I think the defense interval ratio might show how well a company can cover its liabilities. It’s confusing how they both suggest different things.
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Chun
3 months ago
I remember studying the cash conversion cycle and how a shorter cycle typically indicates better liquidity. So, I think Comp Systems is likely more liquid.
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