CMA Part 2: Financial Decision Making
The percentages show the relative weight range given to each section in the exam.
A. Financial Statement Analysis – 25%
Principal financial statements and their purposes; limitations of financial statement information; interpretation and analysis of financial statements including ratio analysis and comparative analysis; market value vs. book value; fair value accounting; international issues; major differences between IFRS and U.S. GAAP; off-balance sheet financing; Cash Flow Statement preparation, analysis, and reconciliation; and earnings quality.
Topics Tested:
– Basic Financial Statement Analysis
– Financial Ratios & Performance Metrics
– Profitability Analysis
– Special Issues
B. Corporate Finance – 20%
Types of risk; measures of risk; portfolio management; options and futures; capital instruments for long-term financing; dividend policy; factors influencing the optimum capital structure; cost of capital; raising capital; managing and financing working capital; mergers and acquisitions; and international finance.
Topics Tested:
– Risk & Return
– Long Term Financial Management
– Raising Capital
– Working Capital Management
– Corporate Restructuring
– International Finance
C. Decision Analysis – 20%
Relevant data concepts; cost-volume-profit analysis; marginal analysis; make vs. buy decisions; income tax implications for operational decision analysis; pricing methodologies including market comparables, cost-based and value-based approaches.
Topics Tested:
– Cost/Volume/Profit Analysis (CVP Analysis)
– Marginal Analysis
– Pricing
D. Risk Management – 10%
Types of risk including business, hazard, financial, operational, strategic, legal compliance and political risk; risk mitigation; risk management; risk analysis; and ERM.
Topics Tested:
– Enterprise Risk
E. Investment Decision – 15%
Cash flow estimates; discounted cash flow concepts; net present value; internal rate of return; non-discounting analysis techniques; income tax implications for investment decisions; ranking investment projects; risk analysis; real options; and valuation models.
Topics Tested:
– Capital Budgeting Process
– Discounted Cash Flow Analysis
– Payback & Discounted Payback
– Risk Analysis in Capital Investment
F. Professional Ethics – 10%
Ethical considerations for the organization
Topic Tested:
– Ethical considerations for management accounting and financial management professionals.
– Ethical considerations for the organization.
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