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US CMA | CMA USA Part II Financial Statement Analysis

US CMA | CMA USA Part II Financial Statement Analysis

Before going into that lets know a little bit about CA USA Course syllabus.-US CMA | CMA USA Part II Financial Statement Analysis-Founded in 1887, the AICPA represents the CPA profession nationally regarding rule-making and standard-setting, and serves as an advocate before legislative bodies, public interest groups and other professional organizations. The AICPA develops standards for audits of private companies and other services by CPAs; provides educational guidance materials to its members; develops and grades the Uniform CPA Examination; and monitors and enforces compliance with the profession’s technical and ethical standards.

 The AICPA’s founding established accountancy as a profession distinguished by rigorous educational requirements, high professional standards, a strict code of professional ethics, a licensing status and a commitment to serving the public interest.

Financial Statement Analysis covers 25% of the relative weight of the whole syllabus.

The below topics are to be followed for effective preparation under level C:

Calculation and interpretation of financial ratios; evaluate performance utilizing multiple ratios; market value vs. book value; profitability analysis; analytical issues including impact of foreign operations, effects of changing prices and inflation, off- balance sheet financing, and earnings quality.

Suggested Reading List for Financial Statement Analysis is listed as follows:

Mackenzie, Bruce, Coetsee, Danie, Njikizana, Tapiwa, Chamboko, Raymond, Colyvas, Blaise, and Hanekom, Brandon, 2012 Interpretation and Application of International Financial Reporting Standards, John Wiley & Sons, Hoboken, NJ, 2012. Gibson, Charles H., Financial Reporting & Analysis, 13th edition, South-Western Cengage Learning, Mason, OH, 2013. Subramanyam, K.R., and Wild, John L., Financial Statement Analysis, 10th edition, McGraw Hill, New York, NY, 2009.

US CMA | CMA USA Part II Financial Statement Analysis

The following are the Content Specification Outlines for Financial Statement Analysis

Financial Statement Analysis (25% – Levels A, B, and C)

1. Basic Financial Statement Analysis

Financial statement analysis (or financial analysis) is the process of reviewing and analyzing a company’s financial statements to make better economic decisions. These statements include the income statement, balance sheet, statement of cash flows, and a statement of changes in equity. Financial statement analysis is a method or process involving specific techniques for evaluating risks, performance, financial health, and future prospects of an organization

a. Common size financial statements

b. Common base year financial statements

2. Financial Ratios

A financial ratio or accounting ratio is a relative magnitude of two selected numerical values taken from an enterprise’s financial statements. Often used in accounting, there are many standard ratios used to try to evaluate the overall financial condition of a corporation or other organization. Financial ratios may be used by managers within a firm, by current and potential shareholders (owners) of a firm, and by a firm’s creditors. Financial analysts use financial ratios to compare the strengths and weaknesses in various companies. If shares in a company are traded in a financial market, the market price of the shares is used in certain financial ratios.

a. Liquidity

b. Leverage

c. Activity

d. Profitability

e. Market

3. Profitability analysis

In cost accounting, profitability analysis is an analysis of the profitability of an organisation’s output. Output of an organisation can be grouped into products, customers, locations, channels and/or transactions.

a. Income measurement analysis

b. Revenue analysis

c. Cost of sales analysis

d. Expense analysis

e. Variation analysis

4. Special issues

a. Impact of foreign operations

b. Effects of changing prices and inflation

c. Off-balance sheet financing

d. Impact of changes in accounting treatment

e. Accounting and economic concepts of value and income

f. Earnings quality

US CMA | CMA USA Part II Financial Statement Analysis

CMA EXAM

RATIO DEFINITIONS

Following are some of the useful abbreviations

  • EBIT = Earnings before interest and taxes
  • EBITDA = Earnings before interest, taxes, depreciation and amortization
  • EBT = Earnings before taxes
  • EPS = Earnings per share
  • ROA = Return on assets
  • ROE = Return on equity

US CMA | CMA USA Part II Financial Statement Analysis

US CMA | CMA USA Subject wise Weightage :   Once you have received authorization from ICMA, it is your responsibility to schedule your appointment at a Prometric Testing Center. Log onto www.prometric.com/ICMA to locate a testing center, schedule, confirm, reschedule, or cancel your appointment 24 hours, 7 days a week. Instructions are provided by ICMA at the time your authorization letter is emailed that provides further options for scheduling. ICMA is not responsible if you delay scheduling and there are no longer appointments available within your authorization period. You will be given a confirmation number at the time you schedule an appointment; you should make a note of this number. If you do not schedule an appointment or you don’t appear for a schedule appointment in the selected testing window, you will forfeit your exam fee.

The CMA examination is given in a computer-based format, and is offered at Prometric Testing Centers located throughout the world. An up-to-date listing of all Prometric Testing Centers can be found at Prometric’s website. www.prometric.com/ICMA. Parts 1 and 2 are offered during the following three testing windows. January/February May/June September/October Registrations for Parts 1 and 2 will close on or after the 15th of February, June, and October. Register for the exam: 1. On-line at the online store. 2. Calling 800-638-4427, or (201) 573-9000 with your credit card information.

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