Summary: Cma Review Part 2: Strategic Financial Management
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1 Liquidity, Solvency, and Leverage Ratios

The attitude of an entity concerning risk is best explained by what kind of ratios?
Management's intent with respect to risk is best explained bymeasures ofSolvency such asCapital StructureRatios andEarnings Coverage Ratios .
[Adaptive Quiz 1  Q19] 
1.1 CommonSize Financial Statements
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What are useful techniques for assessing the persistence of the firm's revenues?
Useful techniques for assessing the persistence of the firm's revenues are:
(1) Trend percentage analysis.
(2) Evaluation of MD&A (Management's Discussion and Analysis, a section of the annual report). 
1.2 Liquidity
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What are the Liquidity ratios you know?How many? What are the distinguishing features?
For theCMA exam 5ratios are relevant:
 Currentratio
 Quickratio akaacidtest
Cash ratio
Cash flowratio
 Net workingcapital ratio 
1.3 Solvency
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What are Capital Structure Ratios?
These ratios report the relative proportions of debt and equity in a firm's capital structure at a given reporting date. 
1.4 Leverage
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What is a general statement of leverage (formula)?
Prefixedcost income amount
Degree of Leverage = _______________________________________
Postfixedcost income amount 
What is the formula for a single period?Degree of Operating Leverage (DOL)
Contribution Margin
DOL = _____________________________
Operating Income or EBIT 
What is the formula for the percentagechange version of DOL?Degree of Operating Leverage (%∆DOL)What does it express?
%∆ in operating income or EBIT
DOL (%∆) = _____________________________
%∆ in sales
It does express the percentage change in EBIT generated by each 1% change in sales. 
What is the formula for a single period?Degree of Financial Leverage (DFL)
EBIT
DFL = ________________
EBT 
What is the formula for the percentagechange version of DFL?Degree of Financial Leverage (%∆DFL)What does it express?
%∆ in net income
DFL (%∆) = _____________________________
%∆ in EBIT
It does express the percentage change in net income generated by each 1% change in EBIT. 
5 Financial Markets and Financing
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5.1.1 Aspects of Financial Markets
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In which two ways can transfers of funds be managed?
Transfers offunds may be either: Direct, or
 through
intermediate entities, such as banks
 Direct, or
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Topics related to Summary: Cma Review Part 2: Strategic Financial Management

Liquidity, Solvency, and Leverage Ratios  CommonSize Financial Statements

Liquidity, Solvency, and Leverage Ratios  Liquidity

Liquidity, Solvency, and Leverage Ratios  Solvency

Liquidity, Solvency, and Leverage Ratios  Leverage

Financial Markets and Financing  Financial Markets and Securities Offerings  Primary Markets and Secondary Markets

Financial Markets and Financing  Financial Markets and Securities Offerings  Insider Trading and Efficient Markets Hypothesis

Financial Markets and Financing  Financial Markets and Securities Offerings  Rating Agencies

Risk Management  The Evolution of Risk Management

Risk Management  Five Types of Risk

Risk Management  Key Steps in the Risk Management Process

Ethical Considerations for Management  Business Ethics