Professional Documents
Culture Documents
Table of Contents
Table of Contents
Introduction to CMA Part 1 ............................................................................................... 1
Section A Planning, Budgeting and Forecasting ......................................................... 3
Planning and Budgeting Concepts .................................................................................. 4
Planning in Order to Achieve Superior Performance
The Role of Management in Attaining Profitable Growth
The External Environment in Planning and Budgeting
Setting Objectives and Goals
Types of Plans and General Principles
Budgeting
The Relationship Among Planning, Budgeting and Performance Evaluation
Advantages of Budgets
Characteristics of Successful Budgeting
Time Frames for Budgets
Who Should Participate in the Budgeting Process
The Budget Development Process
Best Practice Guidelines for the Budget Process
Budgetary Slack and Its Impact on Goal Congruence
Responsibility Centers and Controllable Costs
Cost Standards in Budgeting
Setting Standard Costs
The Standard-Setting Process
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Continuous (Rolling) Budgets
Budget Reports
CMA Part 1
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Probability ........................................................................................................................ 70
Two Requirements of Probability
Conditional Probability
Joint Probability
Three Methods of Assigning Probable Values
Discrete and Continuous Random Variables
Discrete Random Variable Probability Distributions
Expected Value
Variance and Standard Deviation
Continuous Random Variable Probability Distributions
Normal Probability Distribution
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Sales Quantity Variance for a Multi-Product Firm
Sales Mix Variance for a Multi-Product Firm
Total Sales Variance for a Multi-Product Firm
Variances Example Using Contribution Margin
CMA Part 1
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Types of Controls
Accounting Controls Versus Administrative Controls
Objectives of an Audit of Controls
Testing Compliance with Controls
Control Breakdowns
Detection and Prevention of Fraud
Consideration of Fraud in the Planning of a Financial Statement Audit
Internal Audit Reports
Oral Reports and Interim Reports
Preparing the Final Written Internal Audit Report
Contents of the Final Report
Summary Reports
Report Review and Distribution
Types of Incidents That Should Be Reported
Auditor Follow Up
Computerized Audit Techniques
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CMA Part 1
Disaster Recovery
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Appendix A - Variance Report for a Company Selling TWO PRODUCTS ................. 421
Answers to Questions ................................................................................................... 425
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CMA Part 1
CMA Part 2
Table of Contents
Table of Contents
Introduction to CMA Part 2 ............................................................................................... 1
Section A Financial Statement Analysis....................................................................... 3
Introduction to the Financial Statement Analysis Section
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Activity Ratios.................................................................................................................. 41
Accounts Receivable Activity Ratios
Inventory Activity Ratios
Accounts Payable Turnover Ratio
Days Purchases in Accounts Payable and the Cash Cycle
Total Asset Turnover Ratio
Fixed Asset Turnover Ratio
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Net Profit Margin Percentage
EBITDA Margin Percentage
Return on Invested Capital
CMA Part 2
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Financial Analysis and Differences Between U.S. GAAP and IFRS .......................... 133
General Background Information Regarding IFRS
Important Considerations about IFRS Financial Analysis Compared to U.S. GAAP
Why the Differences Between IFRS and U.S. GAAP Are Important
Specific Primary Differences Between IFRS and U.S. GAAP
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Equity
Common Stock
Preferred Stock
The Price of a Share of Stock
Additional Equity Related Sources of Financing
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CMA Part 2
Voluntary Corporate Liquidation
Partial Sell-Off of Assets
Corporate Spin-Off
Equity Carve-Out
Tracking Stock
Effects of Divestitures on Shareholder Value
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CMA Part 2
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Table of Contents
Section C Decision Analysis and Risk Management ................................................... 1
Introduction to the Decision Analysis and Risk Management Section
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Pricing .............................................................................................................................. 26
Impact of Market Structure on Pricing
Impact of Supply and Demand on Pricing
Short-Run Equilibrium Pricing
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Choosing Between Production Options
Fixed Versus Variable Cost Inputs
Product-Mix Decisions Under Constraints
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CMA Part 2
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Introduction to the CMA Assumed Knowledge Book ..................................................... 4
Chapter 1 Microeconomics ............................................................................................ 5
Microeconomics ................................................................................................................ 6
Demand .............................................................................................................................. 7
Determinants of Demand
Elasticity of Demand
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Supply .............................................................................................................................. 33
Elasticity of Supply
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Introduction to the CMA Assumed Knowledge Book ................................................... 10
Financial Accounting ...................................................................................................... 11
Environmental Assumptions
The Financial Statements
The Balance Sheet
The Income Statement
The Statement of Cash Flows (SCF)
Statement of Comprehensive Income
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Percentage-of-Completion Method
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Goodwill
Specific Investee Assets
Deferred Income Taxes
Losses in Excess of Carrying Value of an Equity Method Investment
Changing Levels of Investments to Different Classifications
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