Gleim Cma Review Part 2 Financial Decision Making 2018

CMA Exam Part 2 is similar in format and length to CMA Exam Role 1, but that is where the similarities end. Covering an entirely different set of subject thing, Role two of the CMA exam needs its own CMA written report guide, materials, and practise.

The get-go thing y'all demand to know is that you should study for each part of the CMA exam for at to the lowest degree 16 weeks. You don't need to study for them together, since yous won't take them at the same time.

Many people also wonder if they have to accept the CMA exam parts in sequence. You lot don't. You lot tin take them out of order. In fact, many people choose to take role 2 first. That's exactly what I did.

However y'all schedule it out, know that CMA Exam Part ii is going to require an earnest effort. If you're ready to tackle it, let's begin.

Originally published in 2012, this article was updated and republished on Jan 25, 2021.

CMA Office 2 Syllabus

CMA part 2 syllabus covers vi topic areas. These are:

1. Financial statement analysis, which accounts for 20% of your exam score.
2. Corporate finance, which accounts for 20% of your examination score.
3. Decisions analysis, which accounts for 25% of your exam score.
4. Risk management, which accounts for ten% of your exam score.
5. Investment conclusion, which accounts for ten% of your exam score.
6. Professional ideals, which accounts for 15% of your examination score.

Both the exam questions and essay questions will relate to these subject areas. The percentages are weighted calculations based on your actual number of right answers.

It'southward important that you take each section seriously and dedicate written report time to learning the content you'll exist tested on.

Most CMA candidates utilise a review course to learn the content through a combination of videos, sound lectures, and textbooks. A complete CMA review class too includes a report programme, practice exams, and coaching to keep you lot on track.

Some people notice it helpful to start with the large picture and piece of work down into the specifics. Read on for more detail on each department of the CMA Exam Role 2.

CMA Examination Part two Content: Strategic Financial Management

Certified Management Accountants are often tapped for high-power roles that require strategic financial conclusion making. Part 2 of the CMA Exam ensures that people with this certification actually accept that skill.

Applying financial knowledge, thinking critically, and displaying managerial bent are all important for this function of the CMA Test.

Here is more info on what each section of Part 2 is about. The percentages show the relative weight given to each section in the exam for your final score.

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A. Financial Argument Analysis – xx%

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This section of the exam will test a lot of practical skills for analyzing the financial health of a business. Y'all'll need a solid grasp of financial statements and financial ratios, and all the factors that go into profitability analysis.

There volition also be some content relating to reporting currency, functional currency, and foreign currency transactions.

• Bones Financial Statement Analysis

  • Common size financial statements
  • Mutual base year fiscal statements

• Fiscal Ratios

  • Liquidity
  • Leverage
  • Activity
  • Profitability
  • Marketing

• Profitability Analysis

  • Income measure analysis
  • Revenue assay
  • Price of sales analysis
  • Expense analysis
  • Variation analysis

• Special Issues

  • Impact of foreign operations
  • Effects of changing prices and inflation
  • Bear on of changes in accounting treatment
  • Bookkeeping and economic concepts of value and income
  • Earnings equality

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B. Corporate Finance – twenty%

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This is the department of the test that will crave you to use models (like a Uppercase Asset Pricing Models), interest structures, and bond sensitivity. It deals with managing a corporation's financial investments as well raising capital letter.

You lot demand to distinguish betwixt different kinds of risk as well equally assess relationships between risk and return. It will be important to utilize an understanding of gamble types like market, political, credit, systematic/unsystematic, manufacture and more.

This section also deals with financial markets, including Initial Public Offering (IPO), investment banks, and restructuring through mergers and acquisitions.

• Gamble and return

  • Calculation render
  • Types of take chances
  • Relationship betwixt risk and return

• Long-term financial direction

  • Term structure of interest rates
  • Types of financial instruments
  • Cost of capital
  • Valuation of fiscal instruments

• Raising Uppercase

  • Financial markets and regulations
  • Market efficiency
  • Fiscal institutions
  • Initial and secondary public offerings
  • Dividend policy and share repurchases
  • Lease financing

• Working Upper-case letter Management

  • Working uppercase terminology
  • Cash direction
  • Marketable securities management
  • Accounts receivable management
  • Inventory management
  • Types of short term credit
  • Short term credit management

• Corporate restructuring

  • Mergers and acquisitions
  • Other forms of restructuring
  • International finance
  • Fixed, flexible and floating commutation rates
  • Managing transaction exposure
  • Financing international merchandise

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C. Conclusion Analysis – 25%

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When dealing with decision assay content, y'all'll come across questions about costs, pricing, profit margins. These factors combine with market forces, productivity, and product life cycle.

As a CMA, y'all'll demand to synthesize all of this information to make strategic judgements. You'll project pricing for appurtenances and services, and how that pricing is impacted past supply and need.

Questions will also crave that you understand value added and non-value added toll, engineering, operating income per unit, and more.

• Price/volume/turn a profit assay

  • Breakeven analysis
  • Profit functioning and alternative operating levels
  • Analysis of multiple products

• Marginal assay

  • Sunk costs, opportunity costs, and other related concepts
  • Marginal costs and marginal revenue
  • Special orders and pricing
  • Make vs. buy
  • Sell or procedure further
  • Add or drop a segment
  • Chapters considerations

• Pricing

  • Pricing methodologies
  • Target costing
  • Elasticity of demand
  • Product life-wheel considerations
  • Market structure considerations

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D. Risk Management – 10%

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Managing gamble is often a key part of a CMA's office in a company. This part of the exam will address adventure-related concepts and practices. Y'all will need not only to define the types of risk merely to describe the elements of each type.

So, taking it further, test questions will require you to apply strategies for responding to or managing risk. This part of the test deals with Enterprise Risk Direction (ERM), which you need to understand in-depth. Lastly, you may need to express the role of corporate governance in managing adventure.

• Enterprise Hazard

  • Types of adventure
  • Risk identification and assessment
  • Risk mitigation strategies
  • Managing take a chance

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E. Investment Decision – 10%

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A Certified Management Accountant is often hired every bit CFO or controller, jobs that require them to oversee uppercase budgeting. This part of the CMA exam deals with everything from adventure assay for capital investments to cash flow analyses.

It volition be important that you understand and can calculate things similar pre-tax and postal service-tax cash flows (in regard to investments in uppercase projects), the factors that impact discount rates and payment values. You will want to be familiar with Net Present Value (NPV) and Internal Rate of Return (IRR).

• Capital budgeting process

  • Stages of capital budgeting
  • Incremental cash flows
  • Income tax considerations
  • Evaluating dubiety

• Capital investment analysis methods

  • Cyberspace present values
  • Internal rate of render
  • Payback
  • Comparison of investment analysis methods

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F. Professional Ethics – 15%

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The IMA has a Argument of Ethical Professionals that whatsoever CMA must know and comply with. This is guided past a set of upstanding principles, which may come into play in this part of the exam.

Information technology will exist important that you tin can respond to upstanding scenarios that may include manipulation, fraud, standards, and more than. Specifically related to fraud, you will need to know what the Fraud Triangle model is and explicate how information technology can be used to mitigate the risk of fraud.

• Business organisation ethics

  • Moral philosophies and values
  • Ethical Decision making

• Ethical considerations for management accounting and financial management professionals

  • IMA's Argument of Ethical Professional person Practice
  • Fraud triangle
  • Evaluation and resolution of ethical issues

• Ethical considerations for an system

  • Organizational factors and ethical civilisation
  • IMA's Argument on Management Bookkeeping, "Values and Ideals: From Inception to Practice"
  • Ethical leadership
  • Legal compliance
  • Responsibility for ethical conduct
  • Sustainability and social responsibility

CMA Examination Part 2 Format

All of the content listed to a higher place is organized into part two of the CMA exam in a pretty straightforward way. In that location are two sections, and both are reckoner-based.

Read on to learn the exam format, what the two sections entail, and how they're scored.

Multiple Option Questions

On the CMA exam, you'll begin with multiple-choice questions. Co-ordinate to the IMA, these are some bones facts about the multiple-option questions in CMA Exam Part 2:

• 75% of your overall score
• 100 questions total
• No marks off for incorrect answers
• Yous will have 3 hours, or nigh one.8 minutes per question
• You must go 50% of the questions right to progress to the essay questions

Annotation: The all-time Certified Management Accountant practice tests will include a huge assortment (and number) of multiple-choice questions. Practicing with a realistic timed test simulation should exist a core part of your CMA exam prep.

Make sure your study materials include a quality depository financial institution of practise questions that take authentic, varied material. It's also important that yous find thorough answer explanations. Ideally, you'll be a CMA study program that has all of these materials, so you can report in a streamlined manner.

Essay Questions

CMA examination essay questions come later on multiple-choice questions. Here are the details:

• 25% of your overall score
• 2 essays total
• Each essay volition be a scenario that has five-7 additional questions
• You will have i hour, or about xxx minutes per essay question

To effectively answer CMA essay questions, be sure you read the question in its entirety, have notes, evidence your work as you become, and pay attention to what is really being asked. You want to write conspicuously and succinctly.

It'due south best not to leave questions bare. If you are running out of time, you lot should at least create an outline and jot down some main points.

Conquering both sections on part 2 of the CMA exam requires a programme.

CMA Office ii Study Programme

No question, the CMA examination is difficult. It's intended to test your ability to apply knowledge of advanced accounting and financial management concepts in the real world.

This is a more in-depth studying feel than an exam that only tests you on facts. Y'all can't rely on memorization skills alone, or fifty-fifty primarily. Passing the CMA examination requires knowing the material enough to apply it expertly under the timed pressure level of the test.

The right CMA Function 2 study plan is going to guide you through all the content areas and provide the right amount of practice. Yous need to plan your report time well, cover all of the material, and buy the right grade.

Here are the basics of putting together your plan to conquer CMA Part ii:

Programme Your Written report Fourth dimension

You should dedicate at least 16 weeks of report for part 2 of the CMA examination. Over the course of those weeks, yous will ideally follow a programme that organizes your study for you.

Whether you lot self-study, partially self-study or commit totally to a unmarried CMA course, don't deviate from your plan. The sheer quantity of content you lot need to larn makes fifty-fifty iv months seem short.

One time you know how long yous are going to report, reverse-engineer a CMA written report programme that allocates your written report hours by month, week and even day. Getting that specific will give yous clear parameters and help you understand the kind of effort it's really going to take.

Practice All Question Types

Within the 100 multiple choice questions are various question types. You may run into one of the following 4 question types:

1. Negative questions, which will include phrasing like "not" or "unless."
2. Directly questions, which are the most frequently used type.
3. Multiple answer options, in which y'all'll accept to cull one, more 1 or none.
4. Variable questions, which are like to multiple answers but presented in columns.

Practice quickly identifying the question blazon, and develop strategies based on each type. The faster you can eliminate wrong answers the better, and the question blazon tin help you exercise that.

Make sure your written report plan includes a full practice exam at the start and again afterward you've reviewed all the material. At that point, you'll be able to identify your weak areas, as well as the type of questions that trip you up.

Online Courses

CMA online courses provide a full-length study plan that is usually taught by CMA experts. A good package will take video lessons, audio lessons, CMA textbooks, CMA practice questions, exam simulations, and may include additional study support.

Ownership the right CMA review course is super important. It will literally make or intermission your progress. Check out our guide to choosing the best CMA review course, option one, and get started!

CMA Part two FAQs

Here are some answers to frequently asked questions well-nigh part ii of the CMA exam.

Which is Harder: CMA Part 1 or Part 2?

CMA Exam Part 1 and Part 2 comprehend different content. They both accept several broad categories and comprehend a range of ideas. For nigh people, which department is more hard comes down to educational activity and experience. People who accept a groundwork in Finance usually have an easier time with the CMA Exam Part 2.

For professionals who accept a degree in Accounting, CMA Examination Part 1 may be easier. Some people take the CMA examination without having whatsoever accounting experience at all. At that point, it may be valuable to review the content in both and decide which you want to have first based on personal knowledge and comfort level.

How Long Does information technology Accept to Pass CMA Exam Part 2?

It takes at least sixteen weeks to study for the CMA Exam Part 2. The exam itself is iv hours long. Predicted score release dates are usually about 8 weeks after your test date.

What Topics to Study for Part 2 CMA?

Office ii of the CMA examination covers half dozen topics. You will need to study:

1. 1. Fiscal Argument Assay
   2. Corporate Finance
   3. Decision Analysis
   4. Chance Direction
   5. Investment Decisions
   6. Professional Ethics

How Difficult is CMA Part 2?

The CMA exam pass charge per unit is 45% for both parts of the CMA test. While the numbers are even for 2020, in previous years, Part two has had a higher pass rate than Part 1. This could hateful that CMA test takers notice part 2 slightly easier than part 1.

Have more questions? Drib them below and I'll provide answers!

Back to Frequently Asked Questions

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Source: https://www.cmacoach.com/part-two/

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