C3 - Student Guidance Notes

Student Guidance Notes

September 2004

Guide C03

Guidance notes for students planning to sit C03 Fundamentals of Business Mathematics of the new 2006 CIMA Certificate in Business Accounting syllabus This guide outlines the issues relating to transition from C03 Business Mathematics of the 2000 syllabus to CO3 Fundamentals of Business Mathematics of the new 2006 CIMA Certificate in Business Accounting syllabus. The first section of this guide compares the two syllabuses, highlighting the differences between them. The second part of this guide focuses on the assessment strategy for the new C03 Fundamentals of Business Mathematics exam. The third part of this guide lists additional (or changed) learning outcomes in the new syllabus. If you have any further queries relating to this guide, please contact the CIMA Contact Centre: Telephone+ 44 (0)20 8849 2251 Email: [email protected]

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Syllabus Comparison New Syllabus

Old Syllabus

C03 Fundamentals of Business Mathematics A. Basic Mathematics 15%

C03 Business Mathematics 3 (i) Basic Mathematics 10%

B. Probability 15%

C. Summarising and Analysing Data 15%

Basic Mathematics rises from 10% to 15% with the inclusion of inequalities and the reference to the learning curve. 3(iii Probability 20% Probability falls from 20% to 15% but concentrates on probability and expected values. The normal distribution is dealt with in section C. 3(ii) Summarising and Summarising and analysing data falls from Analysing Data 25% 25% to 15% and now focuses on the analysis and presentation of univariate data. It excludes primary v secondary data and sampling. A new section dealing with correlation and regression.

D. Inter-relationships between Variables 15% E. Forecasting 15%

3(v) Forecasting 25%

F. Financial Mathematics 15%

3(iv) Financial Mathematics 20%

G. Spreadsheets 10%

Comparison and Comments

Forecasting falls from 25% to 15% but it previously contained correlation and regression, now in the new section D. Financial mathematics falls from 20% to 15% with the reduction in requirements for investment appraisal. This is covered in depth at Managerial level. A new section.

Aims There are two specific aims not seen in the old syllabus: i) ii)

correlation coefficients and simple regression analysis were previously included under forecasting, and the use of spreadsheets, in recognition of their importance in quantitative analysis.

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Assessment There will be a computer-based assessment (CBA) of 2 hours duration, comprising 45 compulsory questions, each with one or more parts. The current paper requires a CBA of 90 minutes duration with 35 questions with one or more parts. A variety of objective test question types and styles will be used within the assessment. As well as the conventional multiple choice format other possible styles include: • filling in the blank in a sentence • listing items in rank order • stating a definition (in not more than __ words) • identifying a key issue, for example advantage/ disadvantage (in not more than __ words) • calculating one specific figure, for example profit for a period. • completing a blank or partially completed prescribed format using terms and/or numbers, for example an overhead cost table • identifying points on a graph or diagram, for example a break even point • identifying a specific term describing action/valuation seen in a scenario, for example the conditions for a recession • matching items together or with a description, for example “are the following cash or non-cash items” • interpreting numerical or graphical data.

For further information about computer based assessment please visit the website at www.cimaglobal.com/cba

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Learning Outcomes Additional (or changed) learning outcomes The following learning outcomes were either not included in the corresponding “old” syllabus or have experienced a change: • calculate for both ungrouped and grouped data: arithmetic mean, median, mode, range, variance, standard deviation and coefficient of variation; • explain the concept of a frequency distribution; • prepare graphs/diagrams of normal distribution, explain its properties and use tables of normal distribution; • apply the Pareto distribution and the ‘80:20 rule’; • calculate indices using either base or current weights; • use indices to deflate a series and explain how and why they are used • prepare a scatter diagram; • calculate the correlation coefficient and the coefficient of determination between two variables; • calculate the regression equation between two variables; • apply the regression equation to predict the dependent variable, given a value of the independent variable. • prepare a time series graph; • identify trends and patterns using an appropriate moving average; • prepare a trend equation using either graphical means or regression analysis; • calculate seasonal factors for both additive and multiplicative models and explain when each is appropriate; • calculate predicted values given a time series model; • identify the limitations of forecasting models. • calculate the future value of regular savings and/or the regular investment needed to generate a required future sum using the formula for the sum of a geometric progression; • calculate the NPV and IRR of a project and explain whether and why it should be accepted; • explain the features and functions of spreadsheet software; • explain the use and limitations of spreadsheet software in business; • apply spreadsheet software to the normal work of a Chartered Management Accountant.

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Transition Arrangements Exams based on the CIMA Certificate in Business Accounting 2006 Syllabus, will be available at CIMA approved CBA centres from 2 October 2006. Exams based on the CIMA Certificate in Business Accounting 2000 Syllabus, will be available at CIMA approved CBA centres until the 1 March 2007. Exams based on the 2000 and 2006 Syllabus will be available concurrently between the 2 October 2006 and the 1 March 2007.

Conclusion This syllabus has undergone some re-arrangement of material into different sections and there is an addition of a new section on spreadsheets. However the bulk of the previous syllabus remains. The majority of the learning outcomes listed above have experienced changes of wording or emphasis rather than signalling new topic areas. The computer based assessment is now two hours duration (from 90 minutes) and there are 45 compulsory questions (previously 35).

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