Certified Apartment Portfolio Supervisor (CAPS) Practice Exam - Module 2

What key details does the Operating Statement provide?

1. Investments and asset valuations

2. Income, expenses, variances in NOI and Cash Flow

3. Loan agreements and liabilities

4. Future financial projections

The correct answer is: Income, expenses, variances in NOI and Cash Flow

The Operating Statement is a crucial financial document in property management that provides a comprehensive overview of a property's operational performance over a specific period. This includes key details such as the income generated from rental activities, which is a vital indicator of the property’s revenue-generating capability. Additionally, it outlines the expenses associated with running the property, including maintenance costs, management fees, and utilities. By detailing both income and expenses, the Operating Statement allows property managers and owners to calculate the Net Operating Income (NOI), which is essential for assessing the property's profitability. Furthermore, the Operating Statement can highlight variances in income and expenses, enabling management to identify trends, uncover areas that may need improvement, and make informed decisions based on current performance. Positive or negative cash flow projections garnered from this statement help assess the property's financial health and guide future operational strategies. In contrast, options like investments and asset valuations, loan agreements and liabilities, and future financial projections are typically covered in other financial documents, such as balance sheets or financial forecasts, rather than the Operating Statement itself.