CMA Sri Lanka SL2 Financial Strategy & Valuation Exam study plan

Compute NPV, IRR, discounted payback and profitability index for a single project, showing capital allowances, tax paid one year in arrears and working-capital injection/recovery as separate cash-flow lines.

Adjust project cash flows for inflation, distinguishing money from real rates, and justify in writing which discount-rate/cash-flow pairing is internally consistent.

Rank mutually exclusive projects of differing scale and life by NPV, and reconcile any NPV-versus-IRR conflict using incremental cash-flow and incremental IRR analysis.

Build a five-year spreadsheet appraisal with a one-way sensitivity table on selling price, volume and discount rate, and interpret the switching values.

Apply adjusted present value to a levered project, separating base-case NPV from financing side effects: issue costs, the interest tax shield and the benefit of a subsidised loan.

Evaluate a replacement decision with unequal lives using equivalent annual cost and identify the optimal replacement cycle.

Rank projects under single-period and multi-period capital rationing, explaining why profitability-index ranking fails when rationing binds across more than one period.

Value managerial flexibility with a decision tree and a simple real-option calculation for the option to delay, expand or abandon, and state the conditions under which each option carries material value.

Value an entity using free cash flow to firm and free cash flow to equity, building the enterprise-to-equity bridge and deriving value per share after deducting net debt and minority interests.

Apply Gordon growth and two-stage dividend growth models and explain, with numbers, why the models diverge from an FCFE valuation for the same company.

Derive and apply P/E, P/B, EV/EBITDA and EV/Sales multiples to a set of listed comparables, adjusting for control premium and marketability discount.

Compute EVA, MVA and cash value added for three years and link the results to the underlying value drivers of margin, capital turnover and cost of capital.

Contrast shareholder-value maximisation with stakeholder and triple-bottom-line objectives, and evaluate agency conflicts between managers, shareholders and lenders together with the governance remedies for each.

Assess a company's strategic position from its published financial statements using growth-share, Ansoff and value-driver analysis, and identify the two or three ratios that best signal strategic drift.

Screen a proposed acquisition for strategic fit, estimating synergy value and the maximum premium payable before value transfers to the target's shareholders.

Recommend a dividend policy (residual, stable or constant payout) for a company with a stated capital budget, computing the residual dividend and explaining clientele and signalling effects.

Compute WACC using market-value weights, then unlever and relever beta to derive a project-specific discount rate for a diversification proposal.

Apply the Modigliani-Miller propositions with and without tax, reconcile them with the traditional view, and explain how financial-distress costs produce a trade-off optimum.

Run EBIT-EPS indifference analysis across two financing plans and combine it with interest-cover and net-debt-to-EBITDA tests to recommend a target gearing range.

Estimate the cost of convertible debt by separating the liability and option components, and state the conversion premium and floor value at issue.

Compare an initial public offer, a rights issue and a placing on cost, dilution and certainty of proceeds, and compute the theoretical ex-rights price and value of the right.

Evaluate term loans, debentures and bonds with covenants, computing yield to maturity and after-tax cost of debt and identifying which covenant terms would reprice the issue.

Analyse convertibles and preference shares as hybrid finance, calculating conversion value, premium over straight-debt value and the issuer's effective cost if conversion occurs or fails.

Evaluate lease versus borrow-to-buy using the NPV of incremental after-tax cash flows, including depreciation allowances, lease rentals, maintenance and residual value.

Explain two non-conventional funding routes open to Sri Lankan listed companies and match each to an appropriate asset or cash-flow profile.

Compute the operating and cash conversion cycles and quantify the cash released by cutting receivable days and inventory days by ten days each, net of the effect on payable days.

Build a three-month cash budget and compare the all-in cost of an overdraft, a revolving credit facility and invoice discounting for the same funding gap.

Compute and compare forward, money-market and option hedges for a foreign-currency receivable, ranking them on certainty, cost and downside retained.

Design a cap, floor or collar for a floating-rate borrower and compute the effective interest cost at three rate scenarios, including premium cost.

Apply interest rate parity and purchasing power parity to forecast a future spot rate and state when hedging adds value relative to remaining unhedged.

Sit two full-length timed mock papers covering all seven domains and record the score and time taken per domain.

Re-work every incorrect answer from both mocks to a correct full solution, tagging each error as knowledge, method or time-management.

Re-derive the ten formulas most often dropped under time pressure (WACC, relevered beta, TERP, EAC, conversion value, cash conversion cycle, cap effective cost) from memory in a single sheet.

Rebuild the two heaviest-domain weak spots with fresh practice questions until each scores 80% or above, and confirm the final formula sheet against the syllabus.