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US CMA | CMA USA Part II Financial Decision Making

US CMA | CMA USA Part II  Financial Decision Making

US CMA | CMA USA Part II  Financial Decision Making : CMA (Certified Management Accountant) awarded by IMA (Institute of Management Accountants, USA) is a global professional qualification. The CMA program is designed specifically to validate mastery of the advanced skills required to manage finance functions within an organisation, enabling you to deliver value in today’s complex
business environment. CMA’s play an integral role in the strategic decision-making process.

US CMA | CMA USA Part II  Financial Decision Making

US CMA | CMA USA Part II  Financial Decision Making :  Part 2 is all about financial analysis and decision making. There are six sections: financial statement analysis representing 25%, corporate finance at 20%, decision analysis at 20%, risk management at 10%, investment decisions at 15% and professional ethics at 10%.

 Financial Statement Analysis

This is the biggest section representing 25% of Part 2. Major topics include financial ratios, performance utilising multiple ratios, market value vs book value, profitability analysis, effects of changing prices and inflation, off-balance sheet financing, and special issues such as foreign currency fluctuations, fair value accounting, and US GAAP vs IFRS.

The coverage is similar to Section A of Part 1 on financial accounting, but the focus is more on analysis and comparison using key financial data and ratios. In other words, Section A part 1 is more on understanding past performance using financial statement, while Section A in Part 2 focuses on evaluating future prospect.

CMA exam candidates should be very familiar with these ratios and analytical tools. I suggest that you memorize the formulas of all key ratios. You will also need to know the applications, and understand how external investors use them to evaluate the company’s financial health.

Corporate Finance

Corporate finance is another important topic. Candidates should know the types of risk including the key concept of risk and return, capital instruments for financing, initial and secondary public offerings, dividend policy, cost of capital, working capital management, raising capital, mergers and acquisitions and international finance.

We should understand the short-term and long-term financial management, as well as the benefits and limitations of major financial instruments.

Candidates will see a mix of conceptual and computational questions. The variety of questions can be very broad, but the calculations are likely quite basic.

 Decision Analysis

In this section candidates are tested on how management accountants provide data and perform analysis for the decision-making process.

Exam content includes relevant data concepts, cost volume profit analysis, marginal analysis, make vs buy decisions, income tax implication for operational decision analysis, and pricing methodologies.

Risk management is also part of decision analysis but we will go through this topic in Section D.

Risk Management

This section covers the types of risk, including business, hazard, financial, operational and legal risks; risk mitigation, risk management, risk analysis and enterprise risk management (ERM).

Organisational managers need to identify, assess and respond to risks in order for the organisation to achieve its goal. In the CMA exam, the focus on ERM model. You are most likely to get conceptual questions in this section.

 Investment Decisions

This section covers how management accountants help make important decisions whether to proceed with an investment, or to choose between investment alternatives. Topics include cash flow estimates, discounted cash flow concepts, net present value, internal rate of return, discounted payback, as well as risk analysis and real options.

Professional Ethics

The exam content is based on the IMA Statement of Ethical Standards. Topics include ethical considerations for management accounting professionals, and for the organisation as a whole.

The principles and standards are concise and easy to understand. Candidates should memorise the names of the 4 standards, and more importantly, to know how they are applied in real business situations.

US CMA | CMA USA registration form: 

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US CMA | CMA USA Part II Financial Decision Making : Entrance Fee

Entrance fees let you to take part in CMA Program. The fee ranges from $188 to $250.

US CMA | CMA USA Part II Financial Decision Making : Examination Fee

There was a increase in price for the examination fees in july 2015, the registration fee of the exam is $415 per part, which will added up to be $830.

US CMA | CMA USA Part II Financial Decision Making : For 2017 examination cost:

Student 
 Young Professional 
Regular
 1. IMA membership [3] $39 $155$245
 2. CMA entrance fee $188 $250 $250
 3. Exam Registration
 Part 1 $311 $415 $415
 Part 2 $311 $415 $415
 Total $849 $1,235 $1,325

US CMA | CMA USA Part II Financial Decision Making

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