Get CIPS L4M4 Exam Practice Questions - Real and Updated

Answer : A, E

The current ratio measures a supplier's ability to meet short-term financial obligations and is calculated as total current assets divided by total current liabilities. Current assets include cash, receivables, and inventory, while current liabilities include overdrafts, trade payables, and short-term debt. Equity capital relates to ownership, not liquidity, and sales income and cost of goods sold appear in the income statement, not the balance sheet. Ethical and responsible sourcing requires procurement professionals to assess supplier liquidity to reduce the risk of supply disruption caused by cash-flow problems.

Answer : D

This is a facilitation payment. It's when a sum of money is given for 'helping to facilitate' a contract. E.g. a procurement manager may accept a facilitation payment from a supplier for selecting him to be a new supplier for a big contract.

In the UK this is definitely considered a bribe. It's also against the CIPS Code of Conflict

Answer : A

Prohibiting trade union membership is a violation of workers' rights and international labor standards. Such a practice indicates potential non-compliance with ethical sourcing principles and necessitates further investigation. Ensuring that suppliers respect workers' rights to association is fundamental to ethical procurement.

CIPS Level 4 Diploma in Procurement and Supply, L4M4 Study Guide, Section 3.3.1:Application of the CIPS Code of Conduct

Answer : A

'yes- ethics and sustainability form part of 'value for money' ' is the correct answer.

There are several factors that represent value for money and these are listed on p.3. These include; price, delivery, quality, ethics, sustainability and availability.

Answer : C

During tender evaluation, buyers must ensure that each submission is analysed thoroughly and consistently. Producing a report on each submission (1) supports transparency, auditability, and fairness. Checking arithmetical accuracy (3) ensures that pricing data is correct and prevents calculation errors from misleading the evaluation. Reviewing pre-qualification questionnaires is part of the earlier stage, not tender analysis, while market dynamics are external context, not part of evaluating responses. Responsible sourcing highlights the importance of structured and auditable evaluation processes to protect against bias, ensure compliance, and provide stakeholders with a defendable record of decisions.