ICMAB CMA Knowledge Level cheat sheet

The communication process has seven elements: sender, encoding, message, channel, receiver, decoding, and feedback; noise can disrupt any element.

Channel richness ranks face-to-face highest, then video, telephone, written personal documents, impersonal written documents, and formal numeric reports lowest.

Effective listening stages: receiving, attending, understanding, responding, and remembering; active listening requires paraphrasing and clarifying.

Grapevine communication is informal, fast, and largely oral; it supplements but does not replace formal downward, upward, and lateral channels.

A memo has four parts: heading (To, From, Date, Subject), opening, body, and closing; it is internal, while a business letter is typically external.

The 7 Cs of effective writing: clear, concise, concrete, correct, coherent, complete, and courteous.

Barriers to communication include semantic (jargon, ambiguity), psychological (emotion, distrust), organizational (hierarchy, filtering), and physical (noise, distance).

Nonverbal communication includes kinesics (body movement), proxemics (space), paralanguage (tone, pace), and chronemics (use of time).

Accounting equation: Assets = Liabilities + Equity; every transaction preserves this equality under double-entry bookkeeping.

Debit increases assets and expenses; credit increases liabilities, equity, and revenue. Debits must equal credits in every entry.

Accrual basis records revenue when earned and expenses when incurred, regardless of cash timing; cash basis records only on cash movement.

Matching principle requires expenses to be recognized in the same period as the revenues they helped generate.

Depreciation methods: straight-line = (Cost − Residual)/Useful life; declining balance applies a fixed rate to carrying amount; units-of-production uses usage.

Trial balance lists all ledger balances to verify debit-credit equality; it does not detect all errors (e.g., offsetting or omission errors).

Current ratio = Current assets / Current liabilities; quick ratio = (Current assets − Inventory) / Current liabilities.

Closing entries transfer revenue, expense, and dividend balances to retained earnings, zeroing temporary accounts before the next period.

Time value of money: FV = PV(1 + r)^n; PV = FV / (1 + r)^n; annuity PV = PMT × [1 − (1 + r)^−n] / r.

Net present value = sum of discounted cash inflows minus initial outlay; accept projects with NPV > 0.

Internal rate of return is the discount rate making NPV zero; accept if IRR exceeds the cost of capital, but IRR can mislead with nonconventional cash flows.

Capital asset pricing model: required return = risk-free rate + beta × (market return − risk-free rate).

Weighted average cost of capital = (E/V) × Re + (D/V) × Rd × (1 − tax rate).

Bond price moves inversely to market interest rates; a bond trades at a premium when coupon rate exceeds yield and at a discount when below.

Risk types: systematic (market, non-diversifiable) versus unsystematic (firm-specific, diversifiable); beta measures systematic risk.

Working capital management balances liquidity and profitability; the cash conversion cycle = inventory days + receivable days − payable days.

Management functions: planning, organizing, leading, and controlling (POLC); controlling compares performance with standards and takes corrective action.

Span of control is the number of subordinates a manager supervises; wider spans flatten hierarchy, narrower spans deepen it.

Maslow's hierarchy: physiological, safety, social, esteem, and self-actualization needs, satisfied in ascending order.

Herzberg's two-factor theory separates hygiene factors (pay, conditions) that prevent dissatisfaction from motivators (achievement, recognition) that drive satisfaction.

The marketing mix is the 4 Ps: product, price, place, and promotion; services add people, process, and physical evidence (7 Ps).

Market segmentation divides buyers by demographic, geographic, psychographic, and behavioral variables; targeting selects segments; positioning shapes perception.

Product life cycle stages: introduction, growth, maturity, and decline; pricing and promotion strategies shift by stage.

Leadership styles include autocratic, democratic, and laissez-faire; contingency theories (e.g., Fiedler) hold no single style fits all situations.

Simple interest = P × r × t; compound interest amount = P(1 + r/n)^(nt), where n is compounding periods per year.

Break-even quantity = Fixed costs / (Unit price − Unit variable cost); contribution margin per unit is price minus variable cost.

Mean is the arithmetic average; median is the middle value; mode is the most frequent; skewed data pull the mean toward the tail.

Standard deviation measures dispersion around the mean; variance is its square; coefficient of variation = standard deviation / mean.

Probability: P(A or B) = P(A) + P(B) − P(A and B); P(A and B) = P(A) × P(B|A) for dependent events.

Normal distribution is symmetric and bell-shaped; about 68% of values lie within one standard deviation, 95% within two, 99.7% within three.

Index numbers express relative change versus a base period; Laspeyres uses base quantities, Paasche uses current quantities.

Present value of a perpetuity = PMT / r; it values constant cash flows continuing indefinitely.

Law of demand: price and quantity demanded move inversely, ceteris paribus; supply rises with price. Equilibrium occurs where demand equals supply.

Price elasticity of demand = % change in quantity demanded / % change in price; demand is elastic if |E| > 1, inelastic if |E| < 1.

A price ceiling below equilibrium creates shortage; a price floor above equilibrium creates surplus.

Perfect competition has many firms and price-taking; monopoly has one seller and barriers to entry; oligopoly has few interdependent firms.

Gross domestic product measures market value of final goods and services produced within a country in a period; real GDP is adjusted for inflation.

Inflation is a sustained rise in the general price level; measured by consumer price index; demand-pull and cost-push are main causes.

Fiscal policy uses government spending and taxation; monetary policy uses money supply and interest rates via the central bank.

Phillips curve shows short-run inverse relation between inflation and unemployment; stagflation breaks this trade-off.

Computer system components: hardware (CPU, memory, input/output devices), software (system and application), data, procedures, and people.

RAM is volatile working memory; ROM is nonvolatile; cache is faster and closer to the CPU than main memory.

Database management systems store structured data; SQL is the standard language for querying and manipulating relational databases.

Enterprise resource planning integrates core functions (finance, HR, supply chain) into one system with a shared database.

Network topologies include star, bus, ring, and mesh; the internet uses TCP/IP protocols, with HTTP for web and SMTP for email.

Cloud computing service models: IaaS (infrastructure), PaaS (platform), SaaS (software); deployment models include public, private, and hybrid.

Information security triad: confidentiality, integrity, and availability (CIA); controls include encryption, authentication, and access control.

E-commerce models: B2B (business to business), B2C (business to consumer), C2C (consumer to consumer), and B2G (business to government).

A valid contract requires offer, acceptance, consideration, capacity, and lawful object; intention to create legal relations is also required in common-law systems.

An offer may be revoked before acceptance; acceptance must be unconditional and communicated to the offeror.

Consideration is something of value exchanged; it must be sufficient but need not be adequate.

A company is a separate legal person with perpetual succession, limited liability, and capacity to own property and sue or be sued.

Memorandum of association governs a company's external relations; articles of association govern internal management.

Industrial law covers employment: wages, working hours, safety, termination, and dispute resolution; labor statutes set minimum standards.

Negotiable instruments: a bill of exchange is an unconditional written order to pay; a cheque is drawn on a bank payable on demand.

Breach of contract remedies include damages, specific performance, injunction, and rescission; damages aim to put the injured party in the position as if performed.