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Planning, Budgeting, and Forecasting Overview

This document provides information about Section B of the CMA Part 1 exam, which covers Planning, Budgeting and Forecasting and represents 20% of the exam. It indicates that the exam will contain 100 multiple choice questions and 8-10 written response or calculation questions based on scenarios. It outlines some of the key topics covered in this section, including understanding the budgeting process and its connection to planning, different types of planning a business engages in, top-level planning and use of pro forma statements, and numerical questions involving calculations of expected cash balances or inflows/outflows. The document emphasizes understanding concepts well and being prepared to apply principles to different situations.

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Lama Al Hout
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57 views2 pages

Planning, Budgeting, and Forecasting Overview

This document provides information about Section B of the CMA Part 1 exam, which covers Planning, Budgeting and Forecasting and represents 20% of the exam. It indicates that the exam will contain 100 multiple choice questions and 8-10 written response or calculation questions based on scenarios. It outlines some of the key topics covered in this section, including understanding the budgeting process and its connection to planning, different types of planning a business engages in, top-level planning and use of pro forma statements, and numerical questions involving calculations of expected cash balances or inflows/outflows. The document emphasizes understanding concepts well and being prepared to apply principles to different situations.

Uploaded by

Lama Al Hout
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Section B – Planning, Budgeting and

Forecasting
Planning, Budgeting and Forecasting represents 20% of the CMA Part 1
exam. Part 1 is a four-hour exam that will contain 100 multiple-choice
questions and 8 to 10 written-response or calculation questions based
on two scenarios. Topics within an examination part and the subject
areas within topics may be combined in individual questions.
Therefore, the number of multiple-choice questions on Planning,
Budgeting and Forecasting in any one exam cannot be predicted, nor
can it be predicted whether or not an individual exam will have any
essay questions on the topic. The best approach to preparing for the
exam is to know and understand the concepts very well and be ready
for anything.

This section focuses on the budgeting process in a business and its


inseparable connection with the planning process. Candidates need to
understand the benefits of planning, the goals of planning, and the
general steps in the planning process. Additionally, candidates should
be familiar with the different types of planning a business does. Exam
questions may address the theories and process of planning and
budgeting as well as the different types of planning and budgeting.
Top-level planning and the use of pro forma financial statements in the
planning process are important topics.

Numerical questions may relate to how much should be budgeted or


expected during a period. Questions may also involve a more detailed
calculation of the expected cash balance at some period in time, or the
cash inflows or outflows during a period. The scope of the numerical
questions in planning and budgeting is large, requiring the ability to
apply principles and ideas to different situations.

In the area of budgeting, it is important to understand the budget


process, the order in which the different budgets are prepared, and to
be able to make different budgeting calculations. These calculations
are not necessarily intuitive at the beginning of the study process, but
after answering some questions and mem- orizing the required
formulas, the calculations should become much easier.

Forecasting techniques, learning curves and other quantitative analysis


tools are included because of their usefulness in planning and
budgeting. Another topic in this section, top-level planning and
analysis, deals with pro forma financial statements and their use in
strategic planning.

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