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Within the 'Procure-to-Pay' (P2P) cycle, which sequence correctly orders the core process steps?
A
B
C
D
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2026 Statistics
Key Facts: CMA Final Paper 20A Exam
100
Marks in the Paper
ICMAI Syllabus 2022
3 hrs
Exam Duration
ICMAI Syllabus 2022
50/50
Section A / Section B Weight
ICMAI Syllabus 2022
Group IV
Elective Paper
ICMAI CMA Final
40%/50%
Paper / Group Pass Mark
ICMAI Examination Rules
1 of 3
Electives (20A/20B/20C)
ICMAI CMA Final
ICMAI CMA Final Paper 20A, Strategic Performance Management and Business Valuation, is a 100-mark, 3-hour descriptive elective in Group IV of the CMA Final under Syllabus 2022. Section A (Strategic Performance Management, 50%) spans Introduction to Performance Management (10%), Performance Measurement and Improvement Tools (15%), Economic Efficiency of the Firm (10%), and Enterprise Risk Management (15%). Section B (Business Valuation, 50%) spans Fundamentals (5%), Laws and Compliance (5%), Methods and Approaches (10%), Valuation of Assets and Liabilities (15%), and Valuation in M&A (15%). Candidates must score 40% in the paper and 50% in the group aggregate.
Sample CMA Final Paper 20A Practice Questions
Try these sample questions to test your CMA Final Paper 20A exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.
1In the context of performance management, which statement best distinguishes 'efficiency' from 'effectiveness'?
A.Efficiency is doing the right things; effectiveness is doing things right
B.Efficiency and effectiveness are synonyms used interchangeably in performance reports
C.Efficiency is the ratio of output to input; effectiveness is the degree to which objectives are achieved
D.Efficiency measures market share while effectiveness measures profit margin
Explanation: Efficiency is an input-output relationship (resources consumed per unit of output), whereas effectiveness measures the extent to which planned objectives or outcomes are actually achieved. A firm can be efficient yet ineffective if it produces the wrong output cheaply.
2Productivity is most precisely defined as:
A.The total revenue earned in an accounting period
B.The number of employees engaged in production
C.The percentage of capacity utilised during a shift
D.The ratio of output produced to the input resources consumed
Explanation: Productivity expresses the relationship between output achieved and the inputs (labour, material, capital) used to produce that output. Improving productivity means generating more output from the same inputs or the same output from fewer inputs.
3Within the 'Procure-to-Pay' (P2P) cycle, which sequence correctly orders the core process steps?
A.Invoice receipt -> Purchase requisition -> Goods receipt -> Payment
B.Payment -> Goods receipt -> Purchase order -> Requisition
C.Purchase requisition -> Purchase order -> Goods receipt -> Invoice processing -> Payment
D.Purchase order -> Payment -> Goods receipt -> Invoice
Explanation: The procure-to-pay cycle begins with a purchase requisition, converts it into a purchase order, receives goods/services, processes (three-way matched) the supplier invoice, and ends with payment. Correct sequencing supports control and timely vendor settlement.
4Supply Chain Management (SCM) primarily seeks to optimise which of the following?
A.Only the internal production scheduling of a single plant
B.The dividend policy of the holding company
C.Solely the marketing and advertising spend of the firm
D.The flow of materials, information and funds from supplier's supplier to customer's customer
Explanation: SCM coordinates the end-to-end flow of materials, information and finance across the extended network, from upstream suppliers to downstream customers, to maximise value and minimise total cost. It is inherently inter-organisational, not confined to one plant.
5A key analytical metric in Customer Relationship Management (CRM) is Customer Lifetime Value (CLV). CLV essentially represents:
A.The one-time revenue from a customer's first purchase
B.The cost of acquiring a new customer
C.The present value of net cash flows expected from a customer over the entire relationship
D.The number of complaints a customer raises
Explanation: CLV is the discounted (present) value of the stream of future net margins a firm expects to earn from a customer across the whole relationship. It guides acquisition spend, retention investment and segmentation decisions.
6Financial performance analysis using ratios classifies the 'current ratio' under which category?
A.Profitability ratios
B.Activity (turnover) ratios
C.Solvency (leverage) ratios
D.Liquidity ratios
Explanation: The current ratio (current assets divided by current liabilities) measures short-term liquidity, the firm's ability to meet near-term obligations. Profitability, solvency and activity ratios address different performance dimensions.
7Vendor Relationship Management increasingly emphasises 'vendor rationalisation'. This term refers to:
A.Increasing the number of vendors to maximise competition
B.Paying vendors only after a full year of supply
C.Optimising and often reducing the vendor base to strategic, high-performing suppliers
D.Outsourcing all procurement to a single broker
Explanation: Vendor rationalisation streamlines the supplier base by retaining and developing the most reliable, cost-effective strategic vendors, reducing administrative complexity and leveraging volume. It improves quality consistency and negotiating power.
8A firm's output rose from 1,000 to 1,200 units while labour hours increased from 500 to 550. The percentage change in labour productivity (units per hour) is approximately:
A.20.0% increase
B.9.1% increase
C.8.7% increase
D.No change
Explanation: Old productivity = 1,000/500 = 2.0 units/hour; new = 1,200/550 = 2.1818 units/hour. Change = (2.1818 - 2.0)/2.0 = 0.0909, i.e., about 9.09%. Rounded the closest listed figure is 8.7% only if mis-rounded; the precise value is 9.1%.
9Which of the following is NOT one of the four classic perspectives of Kaplan and Norton's Balanced Scorecard?
A.Financial perspective
B.Customer perspective
C.Internal business process perspective
D.Competitor benchmarking perspective
Explanation: The Balanced Scorecard comprises Financial, Customer, Internal Business Process, and Learning & Growth perspectives. 'Competitor benchmarking' is not one of the four; benchmarking is a separate improvement tool.
10Under the DuPont (three-step) framework, Return on Equity is decomposed as:
A.Net profit margin x Asset turnover x Equity multiplier
B.Gross margin x Current ratio x Debt-equity ratio
C.Operating margin + Asset turnover + Leverage
D.EBIT margin x Interest coverage x Tax rate
Explanation: The three-step DuPont identity expresses ROE = (Net profit/Sales) x (Sales/Total assets) x (Total assets/Equity), i.e., net profit margin x total asset turnover x equity (financial leverage) multiplier. This isolates the drivers of shareholder return.
About the CMA Final Paper 20A Practice Questions
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