US CMA Cheatsheet
Shared 11/27/2025•134 views
External Financial Reporting Financial Statements Income statement Balance sheet Statement of cash flows Statement of changes in equity Revenue Recognition Revenues recognized when earned Some contracts use percentage-of-completion Inventory FIFO (first-in, first-out) LIFO (last-in-first-out) Weighted average Cost of Goods Sold (COGS) COGS: Beginning inventory + Purchases - Ending Inventory Standard Costing Standard cost set benchmark Favorable variances: Actual Unfavorable variances: Actual > Standard Ratio Analysis Current ratio: Current assets / Current liabilities Gross profit margin: (Sales - COGS) / Sales ROA (return on assets): Net Income / Total Assets Debt ratio: Total liabilities / Total assets Planning, Budgeting, and Forecasting Strategic Planning Long-term, sets mission, goals, and objectives Budgeting Quantitative plan for an entity Budgeting Methods Incremental: Prior year's budget as baseline Zero-based: Each expense must be justified Flexible: Adjusts to changes in volume Budgeting Techniques Master budget: Overall financial plan for a period Operating budget: Sales, production, and operating expense budgets Financial budget: Capital expenditures, cash, and balance sheet Types of Budgets Operating budget Capital budget Making predictions under uncertainty Quantitative Methods Regression analysis: $Y = a + bx$ Moving averages Learning curve analysis: $Y = aX^b$ KPI (Key Performance Index) Helps measure achievement of goals Can include both financial and non-financial measures Can be leading or lagging indicators Responsibility Centers Cost center: Responsible for costs only Profit center: Responsible for revenues and costs Investment center: Responsible for investments, revenues, and costs Balanced Scorecard Performance measurement system that links strategies to operational objectives