Find a CMA lesson

Start with recognition and measurement, then trace the transaction through the statements. Profit measures performance under accrual accounting; operating cash flow also reflects noncash items and working-capital movements.

Worked case: From profit to operating cash

5 explanations · 3 worked cases · 3 practice checks

Build the operating plan from its drivers: sales, production, materials, labor and overhead. Then translate activity into collections, payments and financing. A profitable budget can still require cash borrowing.

Worked case: Sales are not the production budget

5 explanations · 3 worked cases · 3 practice checks

Compare actual results with a budget flexed to actual activity before judging cost control. Then explain the variance, assign responsibility only for controllable causes, and check whether the chosen performance measure encourages the right decision.

Worked case: A higher bill can still show cost control

5 explanations · 3 worked cases · 3 practice checks

Separate cost behavior from cost assignment. Fixed and variable describe how costs change with activity; job, process and activity-based costing describe how costs reach products. Use causal drivers and check capacity before interpreting unit costs.

Worked case: What changes when output rises?

6 explanations · 4 worked cases · 3 practice checks

Start with the objective and the failure that could prevent it. Choose a control that addresses that risk, give it an owner, retain evidence that it operated, and test exceptions. A written policy alone does not demonstrate an effective control.

Worked case: Close the duplicate-payment gap

6 explanations · 3 worked cases · 3 practice checks

Define the finance decision before choosing a dashboard, model or automation. Reconcile the input data, select an analytical method that fits the question, validate the result, and keep human accountability for the action.

Worked case: A dashboard total that is too large

6 explanations · 3 worked cases · 3 practice checks

Use ratios and trends to explain business drivers, not to label a company from one number. Check comparability, earnings quality and cash conversion before drawing a liquidity, profitability or solvency conclusion.

Worked case: Revenue grows while cash collection slows

5 explanations · 3 worked cases · 3 practice checks

Match financing to the cash needs and risks of the business. Compare required returns, capital structure, working-capital timing and funding flexibility. A lower borrowing rate alone does not make a financing strategy better.

Worked case: Shorter cash cycle, same sales

5 explanations · 3 worked cases · 3 practice checks

Compare the future revenues and costs that differ between alternatives, including the value of constrained capacity. Sunk costs and unchanged allocations do not change the choice. State the assumptions before recommending a special order, make-or-buy or product-mix decision.

Worked case: A special order with a dedicated setup

5 explanations · 3 worked cases · 3 practice checks

Connect risk to an objective, assess likelihood and impact, choose a response and monitor residual exposure. Expected loss can support the comparison, but it does not capture every severe outcome, dependency or legal constraint.

Worked case: Compare a prevention control on a common basis

5 explanations · 3 worked cases · 3 practice checks

Build incremental after-tax cash flows, place them at the correct dates and discount them at a rate appropriate to their risk. NPV measures value added in currency; IRR and payback answer different questions and can disagree when projects differ in timing or scale.

Worked case: A two-year project with positive NPV

5 explanations · 3 worked cases · 3 practice checks

Apply IMA’s standards of competence, confidentiality, integrity and credibility to the facts. Identify the threat, use the organization’s resolution process and appropriate escalation, protect confidential information, and seek advice when obligations are unclear.

Worked case: Pressure to hide an assumption

5 explanations · 3 worked cases · 3 practice checks