CMA Part 2 Syllabus

CMA Part 2 syllabus is mainly related to financial decision making. Important topics are ratio analysis, corporate finance and ethics.

CMA Part 2 Syllabus Financial Decision Making Percentage
Financial Statement Analysis 25%
Corporate Finance 20%
Decision Analysis 20%
Risk Management 10%
Investment Decisions 15%
Professional Ethics 10%

Financial Statement Analysis (25%)

  1. Basic Financial Statement Analysis
    • Common size financial statements
    • Common base year financial statements
  2. Financial Ratios
    • Liquidity
    • Leverage
    • Activity
    • Profitability
    • Market
  3. Profitability analysis
    • Income measurement analysis
    • Revenue analysis
    • Cost of sales analysis
    • Expense analysis
    • Variation analysis
  4. Special issues
    • Impact of foreign operations
    • Effects of changing prices and inflation
    • Off-balance sheet financing
    • Impact of changes in accounting treatment
    • Accounting and economic concepts of value and income
    • Earnings quality

Corporate Finance (20%)

  1. Risk and return
    • Calculating return
    • Types of risk
    • Relationship between risk and return
  2. Long-term financial management
    • Term structure of interest rates
    • Types of financial instruments
    • Cost of capital
    • Valuation of financial instruments
  3. Raising capital
    • Financial markets and regulation
    • Market efficiency
    • Financial institutions
    • Initial and secondary public offerings
    • Dividend policy and share repurchases
    • Lease financing
  4. Working capital management
    • Working capital terminology
    • Cash management
    • Marketable securities management
    • Accounts receivable management
    • Inventory management
    • Types of short-term credit
    • Short-term credit management
  5. Corporate restructuring
    • Mergers and acquisitions
    • Bankruptcy
    • Other forms of restructuring
  6. International finance
    • Fixed, flexible, and floating exchange rates
    • Managing transaction exposure
    • Financing international trade
    • Tax implications of transfer pricing

Decision Analysis (20%)

  1. Cost/volume/profit analysis
    • Breakeven analysis
    • Profit performance and alternative operating levels
    • Analysis of multiple products
  2. Marginal analysis
    • Sunk costs, opportunity costs and other related concepts
    • Marginal costs and marginal revenue
    • Special orders and pricing
    • Make versus buy
    • Sell or process further
    • Add or drop a segment
    • Capacity considerations
  3. Pricing
    • Pricing methodologies
    • Target costing
    • Elasticity of demand
    • Product life cycle considerations
    • Market structure considerations

Risk Management (10%)

  1. Enterprise risk
    • Types of risk
    • Risk identification and assessment
    • Risk mitigation strategies
    • Managing risk

Investment Decisions (15%)

  1. Capital budgeting process
    • Stages of capital budgeting
    • Incremental cash flows
    • Income tax considerations
  2. Discounted cash flow analysis
    • Net present value
    • Internal rate of return
    • Comparison of NPV and IRR
  3. Payback and discounted payback
    • Uses of payback method
    • Limitations of payback method
    • Discounted payback
  4. Risk analysis in capital investment
    • Sensitivity and scenario analysis
    • Real options

Professional Ethics (10%)

  1. Ethical considerations for management accounting and financial management professionals
    • IMA’s “Statement of Ethical Professional Practice”
    • Fraud triangle
    • Evaluation and resolution of ethical issues
  2. Ethical considerations for the organization
    • IMA’s Statement on Management Accounting, “Values and Ethics: From Inception to Practice”
    • S. Foreign Corrupt Practices Act
    • Corporate responsibility for ethical conduct
Namita Das

Namita Das

VP Academics

CMA (US) – CPA (US)