2016 part 2 wiley CMAexcel learning system exam review self study guide

WILEY CMAEXCEL LEARNING SYSTEM EXAM REVIEW 2016:
SELF-STUDY GUIDE
Part 2: Financial Decision Making

ISBN 978-1-119-05632-4
(Part 2)

ERRATA
Added text is underlined. Deleted text is struck out. Modified text is in bold. In some cases, additional
text, before and/or after the change, may be included to clarify the context or specific location. Italicized
text is FYI.
Section A: Financial Statement Analysis
Topic 2: Financial Ratios
Page: 6
Solvency is a company's ability to meet its long-term obligations as they come due and continue its
business.
Page: 45
Remove “$” from the denominator
Fully Diluted EPS = $50,000,000 - $5,000,000 + $30,000
3,920,000 + 50,000 + 1,000,000
Page: 50
Please note the revised calculation found in the paragraph beginning, “If Company A were to add
provision…”
The $50,000 net positive interest should be a reduction (i.e., $500,000 - $50,000) not an addition. In
addition, we have added a parenthesis (in bold) to ensure the mathematical operators are performed in
the correct order.
(($10,000,000 - ($4,500,000 + $3,500,000) - ($500,000 - $50,000)) / $10,000,000 = $1,550,000 /
$10,000,000 = 15.5%)
Topic 3: Profitability Analysis
Page: 65
ROE = Net Income/Average Assets Stockholders’ Equity

Page: 67
Gross Profit Margin = Sales – Cost of Sales
Gross Profit Margin = Gross Profit / Sales

Section C: Decision Analysis
Topic 1: Cost/Volume/Profit Analysis
Page: 318
Revisions to the following equation as follows: 0.6 × $47 $52 + 0.4 × $52 $47 = $50

Topic 3: Pricing
Page: 362
There is an inverse relationship between a shift in the supply curve and the equilibrium price, and
equilibrium quantity but a direct relationship with the equilibrium quantity.
4/24/2017

| Page 1

| John Wiley and Sons, Inc.


WILEY CMAEXCEL LEARNING SYSTEM EXAM REVIEW 2016:
SELF-STUDY GUIDE
Part 2: Financial Decision Making

ISBN 978-1-119-05632-4
(Part 2)

Answers to Section Practice Questions
Page: 638
Delete Question 2A3-LS11 and explanation (question does not appear in the practice exam).

4/24/2017

| Page 2

| John Wiley and Sons, Inc.