A. Financial Statement Analysis
Comparative financial statement analysis
a. Common-size financial statements
b. Common base year financial statements
c. Financial trend analysis
Financial ratios
a. Liquidity
b. Leverage
c. Activity
d. Profitability
e. Market
- Profitability analysis
a Income measurement analysis
b. Revenue analysis
c. Cost of sales analysis
d. Expense analysis
e. Variation analysis
- Special issues
a. Impact of foreign exchange rate changes on financial statements
b. Effects of changing prices and inflation
c. Accounting and economic concepts of value and income
d. Impact of changes in accounting treatment
e. Earnings quality
The coverage of this section is similar to that of Section A in Part 1, which discusses financial accounting, but the focus is more on analysis and comparison using key financial data and ratios. In addition to this, one must note that special issues such as foreign currency fluctuations, fair value accounting, and US GAAP vs IFRS are also a part of this subject.
B. Corporate Finance
Financial risk and return
a. Calculating Team
b. Types of financial risk
c. Relationship between risk and return
Long-term financial management
a. Term structure of interest rates
b. Type of financial instruments
c. Cost of capital
d. Valuation of financial instrument
Raising capital
a. Financial markets
b. Financial Institutions
c. Initial and secondary public offerings
d. Dividend policy and share repurchase
e. Lease financing
f. Debt financing
Working capital management
a. Net Working capital
b. Cash management
c. Marketable securities management
d. Accountants receivable management
e. Inventory management
f. Types of short-term credit
g. Short term credit management
Corporate restructuring
a. Mergers and acquisitions
b. Other forms of restructuring
International Finance
a. Fixed, flexible, and floating exchange rates
b. Managing transaction exposure
c. Financing international trade
To score well in this section, one must understand short-term and long-term financial management as well as the benefits and limitations of major financial instruments. In this section, one can see a mix of conceptual and computational questions.
C. Business Decision Analysis
Cost/volume/profit analysis
a. Break Even analysis
b. Profit performance and alternative operating levels
c. Analysis of multiple products
Marginal analysis
a. Sunk costs, opportunity costs, and other related concepts
b. Marginal costs and marginal revenue
c. Special orders and pricing
d. Make vs. Buy
e. Sell or process further
f. Add or drop a segment
g. Capacity considerations
Pricing
a. Pricing methodologies
b. Target costing
c. Price elasticity of demand
d. Product life-cycle considerations
e. Market structure considerations
This section will test a candidate on how management accountants can provide data and perform analysis for the decision-making process of an organization.
D. Enterprise Risk Management
Enterprise risk
a. Types of risk
b. Risk identification and assessment
c. Risk Mitigation strategies
d. Managing risk
CMAs as efficient accountants or organizers need to identify, assess, and react to different kinds of risks faced by an organization for the organization to achieve its ultimate goal. The CMA exam Part 2 concentrates on the ERM model. Candidates appearing for the exam are most likely to get conceptual questions in this section.
E. Capital Investment Decisions
Capital budgeting process
a. Stages of capital budgeting
b. Incremental cash flows
c. Income tax considerations
d. Evaluating uncertainty
e. Discount rates
- Capital investment analysis methods
a. Net present value
b. Internal rate of return
c. Payback
d. Comparison of investment analysis methods
e. Sensitive analysis
This section covers how management accountants advise and decide on important matters about investments that are to be made by the organization or even bring out better alternatives.
F. Professional Ethics
Business ethics
a. Ethical decision making
b. Types of business fraud
Ethical considerations for management accounting and financial management professionals
a. IMA's Statement of Ethical Professional Practice
b. Fraud triangle
c. Evaluation and resolution of ethical issues
Ethical considerations for the organization
a. Organizational factors and ethical culture
b. Ethical leadership
c. Legal compliance
d. Responsibility for ethical conduct
e. Sustainability and social responsibility
f. Data ethics
The IMA Statement of Ethical Standards is what presides over this section. The principles and standards have been made concise and easy to understand for candidates. Candidates must prepare how these ethics are applied in real business situations. Candidates appearing for the exam must note that to clear part 2 of the CMA USA Exams is difficult but not impossible. It is hence suggested that they do their research and study very closely on each of the listed topics under each of the six subjects.
