PART II: BUSINESS ANALYSIS

In this section

• Chapter 4: Financial Statement Analysis
  • Ratio Analysis (Profitability, Liquidity, Solvency)
    Explore key financial ratios, their formulas, and real-life applications for CPA candidates seeking a deep understanding of profitability, liquidity, and solvency measures.
  • Horizontal, Vertical, and Trend Analysis
    Discover how to compare financial statements across periods, highlight key changes, and deepen your strategic insights using horizontal, vertical, and trend analysis.
  • Benchmarking and Industry Comparisons
    Learn how to identify reliable benchmarks, gather peer data, and interpret key deviations for effective financial analysis.
  • Identifying Anomalies and Potential Red Flags
    Explore essential strategies for detecting irregularities in financial statements, uncover warning signs in ratio fluctuations and disclosures, and learn best practices to safeguard financial integrity.
• Chapter 5: Managerial and Cost Accounting Essentials
  • Cost Classifications (Fixed, Variable, Mixed)
    Explore the core principles of cost behavior, learn to distinguish fixed, variable, and mixed costs, and see how each flows through accounts for analysis in managerial and cost accounting contexts.
  • Cost Accumulation Systems (Job Order, Process, ABC)
    Explore essential cost accumulation approaches—job order, process, and activity-based costing—that drive informed budgeting, performance evaluations, and strategic decision making.
  • Variance Analysis (Material, Labor, Overhead, Sales)
    Learn how to identify, calculate, and interpret key variances in material, labor, overhead, and sales to enhance managerial decision-making and operational efficiency.
  • Volume, Price, and Mix Effects
    Learn how to analyze and interpret sales volume, sales price, and product mix variances to make more informed managerial decisions.
• Chapter 6: Non-Financial and Non-GAAP Measures
  • The Balanced Scorecard Approach
    Explore the Balanced Scorecard method by linking financial, customer, internal process, and learning/growth measures for effective performance management. Learn how to align organizational strategy with measurable metrics, overcome pitfalls, and implement practical best practices.
  • Operational Indicators and Customer Metrics
    Discover how to identify and interpret non-financial key performance indicators, including operational and customer-focused metrics, to strengthen business analysis and reporting in line with CPA BAR objectives.
  • Evaluating EBITDA, Free Cash Flow, and Other Non-GAAP Metrics
    Discover how EBITDA, Free Cash Flow, and other Non-GAAP measures are calculated and used by management, including their benefits and limitations.
  • Interpreting Non-GAAP Reporting with Professional Skepticism
    Explore the nuances of non-GAAP measures, potential manipulations, and how to apply a critical mindset for robust financial analysis.
• Chapter 7: Budgeting and Forecasting
  • Master Budgeting (Sales, Production, Cash, etc.)
    Discover how to create, integrate, and manage master budgets—from sales estimates to production plans to final cash forecasts—in a cohesive, step-by-step approach.
  • Rolling Forecasts and Zero-Based Budgeting
    Explore rolling forecasts and zero-based budgeting as flexible and dynamic approaches to financial planning, comparing their advantages and applications for CPA exam readiness.
  • Sensitivity Analysis and Scenario Planning
    Explore comprehensive strategies for incorporating sensitivity analysis and scenario planning into budgeting, highlighting best/worst-case perspectives, risk assessment, and real-world applications.
  • Using Data Patterns and Predictive Analytics
    Learn how to harness historical data models and analytics techniques to improve forecast accuracy and drive strategic decisions in budgeting and forecasting.
• Chapter 8: Risk Assessment and Prospective Analysis
  • Capital Structure and Cost of Capital
    Explore essential concepts in capital structure, WACC, and financial risk, with practical examples, diagrams, and best practices for CPA candidates.
  • Capital Budgeting Tools (NPV, IRR, Payback)
    Explore key capital budgeting metrics and methodologies—NPV, IRR, and Payback Period—essential for evaluating project feasibility, risk assessment, and long-term profitability in CPA exam scenarios.
  • COSO ERM Overview for Business Analysis
    Discover how the COSO Enterprise Risk Management framework integrates with strategic planning and performance measurement, guiding organizations toward informed risk-aware decisions and robust business analysis.
  • Market Influences (Demand, Inflation, Interest Rates, Currency)
    Explore how demand, inflation, interest rates, and currency fluctuations shape revenues, costs, and valuations, and discover practical strategies for navigating these external forces in business analysis and forecasting.
• Chapter 9: Valuation Techniques and Investment Decisions
  • Valuation Approaches (Income, Market, Asset)
    Explore the foundational valuation approaches—Income, Market, and Asset—including key concepts, practical calculations, and real-world CPA exam scenarios.
  • Mergers, Acquisitions, and Divestitures Considerations
    Explore synergy calculations, intangible asset valuations, and accounting complexities for M&A transactions, including best practices, case studies, and strategic insights.
  • Real Option Valuation and Complex Modeling
    Gain a comprehensive understanding of real option valuation, including key principles, sophisticated modeling techniques, and best practices for complex decision-making in modern finance.
  • Discount Rates, Premiums, and Synergy Assessments
    Learn how to adjust discount rates for varied risk premiums and incorporate synergy estimates in valuation and investment decisions.