CMA Exam Part 2 is similar in format and length to CMA Exam Part 1, but that is where the similarities end. Covering an entirely different set of subject matter, Part 2 of the CMA exam needs its own study guide, materials, and practice.
The first thing you need to know is that you should study for each part of the CMA exam for at least 16 weeks. You don’t need to study for them together, since you won’t take them at the same time.
Many people also wonder if they have to take the CMA exam parts in sequence. You don’t. You can take them out of order. In fact, many people choose to take part 2 first. That’s exactly what I did.
However you schedule it out, know that CMA Exam Part 2 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 January 25, 2021.
CMA Part 2 Syllabus
CMA part 2 syllabus covers six topic areas. These are:
- Financial statement analysis, which accounts for 20% of your exam score.
- Corporate finance, which accounts for 20% of your exam score.
- Decisions analysis, which accounts for 25% of your exam score.
- Risk management, which accounts for 10% of your exam score.
- Investment decision, which accounts for 10% of your exam score.
- Professional ethics, which accounts for 15% of your exam 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’s important that you take each section seriously and dedicate study time to learning the content you’ll be tested on.
Most CMA candidates use a review course to learn the content through a combination of videos, audio lectures, and textbooks. A complete CMA review course also includes a study plan, practice exams, and coaching to keep you on track.
Some people find it helpful to start with the big picture and work down into the specifics. Read on for more detail on each section of the CMA Exam Part 2.
CMA Exam Part 2 Content: Strategic Financial Management
Certified Management Accountants are often tapped for high-power roles that require strategic financial decision making. Part 2 of the CMA Exam ensures that people with this certification actually have that skill.
Applying financial knowledge, thinking critically, and displaying managerial aptitude are all important for this part of the CMA Exam.
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.
A. Financial Statement Analysis – 20%
This section of the exam will test a lot of practical skills for analyzing the financial health of a business. You’ll need a solid grasp of financial statements and financial ratios, and all the factors that go into profitability analysis.
There will also be some content relating to reporting currency, functional currency, and foreign currency transactions.
Basic Financial Statement Analysis
- Common size financial statements
- Common base year financial statements
- Income measure analysis
- Revenue analysis
- Cost of sales analysis
- Expense analysis
- Variation analysis
- Impact of foreign operations
- Effects of changing prices and inflation
- Impact of changes in accounting treatment
- Accounting and economic concepts of value and income
- Earnings equality
B. Corporate Finance – 20%
This is the section of the test that will require you to use models (like a Capital Asset Pricing Models), interest structures, and bond sensitivity. It deals with managing a corporation’s financial investments as well raising capital.
You need to distinguish between different kinds of risk as well as assess relationships between risk and return. It will be important to apply an understanding of risk types like market, political, credit, systematic/unsystematic, industry and more.
This section also deals with financial markets, including Initial Public Offering (IPO), investment banks, and restructuring through mergers and acquisitions.
Risk and return
- Calculation return
- Types of risk
- Relationship between risk and return
Long-term financial management
- Term structure of interest rates
- Types of financial instruments
- Cost of capital
- Valuation of financial instruments
- Financial markets and regulations
- Market efficiency
- Financial institutions
- Initial and secondary public offerings
- Dividend policy and share repurchases
- Lease financing
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
- Mergers and acquisitions
- Other forms of restructuring
- International finance
- Fixed, flexible and floating exchange rates
- Managing transaction exposure
- Financing international trade
C. Decision Analysis – 25%
When dealing with decision analysis content, you’ll encounter questions about costs, pricing, profit margins. These factors combine with market forces, productivity, and product life cycle.
As a CMA, you’ll need to synthesize all of this information to make strategic judgements. You’ll project pricing for goods and services, and how that pricing is impacted by supply and demand.
Questions will also require that you understand value added and non-value added cost, engineering, operating income per unit, and more.
- Breakeven analysis
- Profit performance and alternative operating levels
- Analysis of multiple products
- Sunk costs, opportunity costs, and other related concepts
- Marginal costs and marginal revenue
- Special orders and pricing
- Make vs. buy
- Sell or process further
- Add or drop a segment
- Capacity considerations
- Pricing methodologies
- Target costing
- Elasticity of demand
- Product life-cycle considerations
- Market structure considerations
D. Risk Management – 10%
Managing risk is often a key part of a CMA’s role in a company. This part of the exam will address risk-related concepts and practices. You will need not only to define the types of risk but to describe the elements of each type.
Then, 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 Management (ERM), which you need to understand in-depth. Lastly, you may need to express the role of corporate governance in managing risk.
- Types of risk
- Risk identification and assessment
- Risk mitigation strategies
- Managing risk
E. Investment Decision – 10%
A Certified Management Accountant is often hired as CFO or controller, jobs that require them to oversee capital budgeting. This part of the CMA exam deals with everything from risk analysis for capital investments to cash flow analyses.
It will be important that you understand and can calculate things like pre-tax and post-tax cash flows (in regard to investments in capital 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 uncertainty
Capital investment analysis methods
- Net present values
- Internal rate of return
- Comparison of investment analysis methods
F. Professional Ethics – 15%
The IMA has a Statement of Ethical Professionals that any CMA must know and comply with. This is guided by a set of ethical principles, which may come into play in this part of the exam.
It will be important that you can respond to ethical scenarios that may include manipulation, fraud, standards, and more. Specifically related to fraud, you will need to know what the Fraud Triangle model is and explain how it can be used to mitigate the risk of fraud.
- Moral philosophies and values
- Ethical Decision making
Ethical considerations for management accounting and financial management professionals
- IMA’s Statement of Ethical Professional Practice
- Fraud triangle
- Evaluation and resolution of ethical issues
Ethical considerations for an organization
- Organizational factors and ethical culture
- IMA’s Statement on Management Accounting, “Values and Ethics: From Inception to Practice”
- Ethical leadership
- Legal compliance
- Responsibility for ethical conduct
- Sustainability and social responsibility
CMA Exam Part 2 Format
All of the content listed above is organized into part 2 of the CMA exam in a pretty straightforward way. There are two sections, and both are computer-based.
Read on to learn the exam format, what the two sections entail, and how they’re scored.
Multiple Choice Questions
On the CMA exam, you’ll begin with multiple-choice questions. According to the IMA, these are some basic facts about the multiple-choice questions in CMA Exam Part 2:
- 75% of your overall score
- 100 questions total
- No marks off for wrong answers
- You will have 3 hours, or about 1.8 minutes per question
- You must get 50% of the questions correct to progress to the essay questions
Note: The best Certified Management Accountant practice tests will include a huge assortment (and number) of multiple-choice questions. Practicing with a realistic timed exam simulation should be a core part of your CMA exam prep.
Make sure your study materials include a quality bank of practice questions that have authentic, varied material. It’s also important that you find thorough answer explanations. Ideally, you’ll be a CMA study program that has all of these materials, so you can study in a streamlined way.
CMA exam essay questions come after multiple-choice questions. Here are the details:
- 25% of your overall score
- 2 essays total
- Each essay will be a scenario that has 5-7 additional questions
- You will have one hour, or about 30 minutes per essay question
To effectively answer CMA essay questions, be sure you read the question in its entirety, take notes, show your work as you go, and pay attention to what is actually being asked. You want to write clearly and succinctly.
It’s best not to leave questions blank. If you are running out of time, you should at least create an outline and jot down some main points.
Conquering both sections on part 2 of the CMA exam requires a plan.
CMA Part 2 Study Plan
No question, the CMA exam 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 experience than an exam that only tests you on facts. You can’t rely on memorization skills alone, or even primarily. Passing the CMA exam requires knowing the material enough to apply it expertly under the timed pressure of the exam.
The right CMA Part 2 study plan is going to guide you through all the content areas and provide the right amount of practice. You need to plan your study time well, cover all of the material, and buy the right course.
Here are the basics of putting together your plan to conquer CMA Part 2:
Plan Your Study Time
You should dedicate at least 16 weeks of study for part 2 of the CMA exam. Over the course of those weeks, you will ideally follow a program that organizes your study for you.
Whether you self-study, partially self-study or commit totally to a single CMA course, don’t deviate from your plan. The sheer quantity of content you need to learn makes even four months seem short.
Once you know how long you are going to study, reverse-engineer a CMA study plan that allocates your study hours by month, week and even day. Getting that specific will give you 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 encounter one of the following four question types:
- Negative questions, which will include phrasing like “not” or “unless.”
- Direct questions, which are the most frequently used type.
- Multiple answer options, in which you’ll have to choose one, more than one or none.
- Variable questions, which are similar to multiple answers but presented in columns.
Practice quickly identifying the question type, and develop strategies based on each type. The faster you can eliminate wrong answers the better, and the question type can help you do that.
Make sure your study plan includes a full practice exam at the start and again after 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.
CMA online courses provide a full-length study program that is usually taught by CMA experts. A good package will have video lessons, audio lessons, CMA textbooks, CMA practice questions, exam simulations, and may include additional study support.
Buying the right CMA review course is super important. It will literally make or break your progress. Check out our guide to choosing the best CMA review course, pick one, and get started!
CMA Part 2 FAQs
Here are some answers to frequently asked questions about part 2 of the CMA exam.
Which is Harder: CMA Part 1 or Part 2?
CMA Exam Part 1 and Part 2 cover different content. They both have several broad categories and cover a range of ideas. For most people, which section is more difficult comes down to education and experience. People who have a background in Finance usually have an easier time with the CMA Exam Part 2.
For professionals who have a degree in Accounting, CMA Exam Part 1 may be easier. Some people take the CMA exam without having any accounting experience at all. At that point, it may be valuable to review the content in both and decide which you want to take first based on personal knowledge and comfort level.
How Long Does it Take to Pass CMA Exam Part 2?
It takes at least 16 weeks to study for the CMA Exam Part 2. The exam itself is four hours long. Predicted score release dates are usually about 8 weeks after your test date.
What Topics to Study for Part 2 CMA?
Part 2 of the CMA exam covers six topics. You will need to study:
- Financial Statement Analysis
- Corporate Finance
- Decision Analysis
- Risk Management
- Investment Decisions
- Professional Ethics
How Difficult is CMA Part 2?
The CMA exam pass rate is 45% for both parts of the CMA exam. While the numbers are even for 2020, in previous years, Part 2 has had a higher pass rate than Part 1. This could mean that CMA test takers find part 2 slightly easier than part 1.
Have more questions? Drop them below and I’ll provide answers!