Part 1 Financial Planning, Performance, and Analytics E-Book

Azhar ul Haque Sario

• Herausgeber: Azhar Sario Hungary
• Kategorie: Fachliteratur
• Serie: ICMA Certified Management Accountant CMA Examinations
• Sprache: Englisch

Seitenzahl: 205

Veröffentlichungsjahr: 2025

Beschreibung

Unlock the future of finance and dominate the 2026 CMA Part 1 exam with a guide that transforms you from a number cruncher into a strategic storyteller.

This book is your comprehensive roadmap to mastering Part 1 of the Certified Management Accountant exam for the 2026 syllabus. It covers the full spectrum of required topics. You will explore External Financial Reporting Decisions. You will dive into Planning, Budgeting, and Forecasting. The text breaks down Performance Management. It simplifies Cost Management. It demystifies Internal Controls. It clarifies Technology and Analytics. You will learn to view the Balance Sheet as a live dashboard. You will treat the Income Statement as a narrative of business survival. It explains how to value volatile assets like crypto. It teaches you to estimate environmental liabilities. It shows how AI impacts forecasting. It covers modern supply chain strategies. It details the shift from static budgets to rolling forecasts. You get clear examples for every concept.

While other guides act like dusty encyclopedias, this book serves as a dynamic conversation with a mentor. Its competitive advantage lies in its recognition of the 2026 reality: robots can do the math, but only you can tell the story. Traditional books focus on memorizing formulas. This book focuses on "The Why" and "The So What." It integrates cutting-edge themes like ESG (Environmental, Social, and Governance), blockchain validation, and "Zero Trust" cybersecurity directly into accounting principles. It teaches you to be a Data Translator, not just a calculator. It explains how to use "Digital Twins" for process redesign. It prepares you to face the exam with the mindset of a CFO, offering a unique edge in a world dominated by automation.

Imagine mastering the "Income Statement as a Movie" where you direct the plot of profit and loss. You will understand why modern budgeting is a "nervous system" connecting strategy to the factory floor. You will learn to spot "zombie costs" using Zero-Based Budgeting. The book guides you through the "Atlantic Divide" between GAAP and IFRS. It helps you navigate the "Grey Areas" of revenue recognition. You will discover how to use Regression Analysis as a "BS Detector" for bad data. It turns the dry topic of Internal Controls into a thrilling guide on preventing cyber-fraud in a remote-work world. You will explore how "Smart Contracts" on the blockchain are replacing traditional invoices. From "Green Storage" in data centers to the "Three-Legged Stool" of consolidation control, every page is packed with vivid analogies. This is not just exam prep; it is career insurance for the algorithmic age.

Copyright Disclaimer: This book is an independently produced study resource. The author, Azhar ul Haque Sario, has no affiliation with the Institute of Management Accountants (IMA) or the certification board. All references to "Certified Management Accountant" and "CMA" are used under nominative fair use for educational purposes to describe the subject matter of the book.

Leseprobe

Part 1 Financial Planning, Performance, and Analytics: Certified Management Accountant CMA

Azhar ul Haque Sario

Copyright

Copyright © 2025 by Azhar ul Haque Sario

All rights reserved. No part of this book may be reproduced in any manner whatsoever without written permission except in the case of brief quotations embodied in critical articles and reviews.

First Printing, 2025

[email protected]

ORCID: https://orcid.org/0009-0004-8629-830X

LinkedIn: https://www.linkedin.com/in/azharulhaquesario/

Disclaimer: This book is free from AI use. The cover was designed in Canva.

Copyright Disclaimer: This book is an independently produced study resource. The author, Azhar ul Haque Sario, has no affiliation with the Institute of Management Accountants (IMA) or the certification board. All references to "Certified Management Accountant" and "CMA" are used under nominative fair use for educational purposes to describe the subject matter of the book.

Contents

Copyright

External Financial Reporting Decisions (15% - Levels A, B, and C)

Financial statements

The Balance Sheet

The Income Statement (CMA 2026)

Mastering Statement of changes in equity & Statement of cash flows

Consolidated statements and Integrated reporting

Recognition, measurement, and valuation

Planning, Budgeting, and Forecasting (20% - Levels A, B, and C)

Strategic planning

Budgeting concepts

Forecasting techniques

Budgeting methodologies

Annual profit plan and supporting schedules

Top-level planning and analysis

Performance Management (20% - Levels A, B, and C)

Cost and variance measures

Responsibility centers and reporting segments

Performance measures

Cost Management (15% - Levels A, B, and C)

Measurement concepts

Costing systems

Overhead costs

Supply chain management

Business process improvement

Internal Controls (15% - Levels A, B, and C)

Governance, risk, and compliance

System controls and security measures

Technology and Analytics (15% - Levels A, B, and C)

Information systems

Data governance

Technology-enabled finance transformation

Data analytics

About Author

External Financial Reporting Decisions (15% - Levels A, B, and C)

Financial statements

The Balance Sheet

In the past, the Balance Sheet was often viewed as a "snapshot"—a static photo. In 2026, think of it as a live dashboard.

For a Management Accountant, this document answers the two most primal questions of business survival:

What resources do we control? (The engines of future cash flow).

Who has a claim on those resources? (The creditors and the owners).

The 2026 syllabus adds a layer of complexity: Sustainability and Digitization. You aren't just counting cash anymore; you are valuing volatile crypto assets, estimating environmental cleanup costs (ESG), and predicting credit losses with AI models.

2. The Golden Rule: The Accounting Equation

Everything rests on one immutable law of physics in the financial universe. You cannot create value out of thin air; every resource must be funded by someone.

Assets=Liabilities+Equity

Think of this as "The Stuff" vs. "The Funding."

Assets (The Uses): "We bought a factory."

Liabilities (The Sources - External): "We took a loan to buy the factory."

Equity (The Sources - Internal): "The owners put in cash to buy the factory."

2026 Reality Check: An asset is only an asset if it provides future economic benefit. A server that cannot run modern AI algorithms is not an asset, regardless of what you paid for it. It’s an expense waiting to happen.

3. The New Frontiers of 2026

The classic definitions of assets and liabilities have evolved. Here are the three "Game Changers" you must master for the exam.

A. Digital Assets (The Crypto Shift)

This is the biggest verifiable change. Historically, crypto was treated like a broken machine—you recorded losses, but never gains.

The Old Way: Cost minus Impairment.

The 2026 Way (Fair Value): If you hold Bitcoin and the price skyrockets, your Balance Sheet immediately shows that value, and the gain hits your Net Income. It is volatility in real-time.

B. The "Invisible" Debt (Leases)

Companies used to hide rental agreements in the footnotes to make their debt look lower. That loophole is closed (ASC 842 / IFRS 16).

The Reality: If you rent a fleet of trucks, you have a Right-of-Use Asset and a massive Lease Liability. This hurts debt ratios but reflects reality.

C. The ESG Liability

If a company pollutes today with a promise to clean it up in 2035, that obligation is a liability now. You must estimate the present value of that future cleanup and book it.

4. Case Study: A Year in the Life of "Nebula Dynamics"

Let’s apply this to the real world. Meet Nebula Dynamics, a robotics startup operating in 2026.

The Context:

Industry: Robotics & AI.

Strategy: High growth, tech-heavy, holding crypto reserves.

Status: First year of operations (Jan 1 – Dec 31, 2026).

The "Live" Log (Transactions)

We need to process the chaos of a business year into an orderly statement.

Event TypeThe StoryThe Financial Impact

FoundingOwners invest cash.Cash ↑ $600k / Equity ↑ $600k

LeverageBank loan taken (5% interest).Cash ↑ $200k / Liability ↑ $200k

CapexBought high-tech servers.Cash ↓ $180k / PPE (Asset) ↑ $180k

InventoryBought robot parts on credit.Inventory ↑ $150k / Accts Payable ↑ $150k

Crypto BetBought 2 Bitcoin @ $20k each.Cash ↓ $40k / Digital Asset ↑ $40k

SalesSold robots. Half cash, half credit.Cash ↑ $200k / AR ↑ $200k / Revenue $400k

OperationsPaid bills and suppliers.Cash ↓ $200k total / Exp & Liab ↓

The Strategic Adjustments (Year-End)

This is where the Accountant adds value over the Bookkeeper. We must adjust for time and risk.

Crypto Mark-to-Market: The Bitcoin bought for $40k is now worth $70k. We must record this $30k gain.

CECL (Credit Losses): We predict $5k of our customers won't pay. We reduce the asset value now, not later.

Depreciation: The servers are wearing out. We expense $36k of their value.

5. The Solution: Nebula Dynamics Balance Sheet

Below is the "Anchor of Truth" for Nebula Dynamics as of Dec 31, 2026.

Nebula Dynamics, Inc. Statement of Financial Position

ASSETS (What we have)AmountNotes

Current Assets

Cash & Cash Equivalents$580,000High liquidity; safe.

Accounts Receivable (Net)$195,000Adjusted for the $5k predicted loss.

Inventory$40,000What's left on the shelves.

Total Current Assets$815,000

Non-Current Assets

Digital Assets (Crypto)$70,000Valued at Market Price (Level 1 Fair Value).

Property, Plant & Equip (Net)$144,000Cost minus $36k depreciation.

Total Non-Current Assets$214,000

TOTAL ASSETS$1,029,000

LIABILITIES & EQUITY (Who funded it)AmountNotes

Current Liabilities

Accounts Payable$70,000What we still owe suppliers.

Interest Payable$10,000Accrued interest on the loan.

Total Current Liabilities$80,000

Non-Current Liabilities

Long-Term Bank Loan$200,000Due in 2031.

Total Liabilities$280,000

Equity

Common Stock$600,000Initial Investment.

Retained Earnings$149,000Includes the $30k Crypto Gain.

Total Equity$749,000

TOTAL LIAB & EQUITY$1,029,000Balanced.

6. The Strategic Readout

As a CMA, you don't just build the spreadsheet; you read the tea leaves. What does this sheet tell us about Nebula Dynamics?

Extreme Liquidity: The company has $815k in liquid assets to pay just $80k in bills. This is incredibly safe, but potentially inefficient. Strategic Question: Why is so much cash sitting idle? Should we invest more in R&D?

The Crypto Boost: The Retained Earnings are healthy ($149k), but roughly 20% of that profit came from the Bitcoin price surge, not operations. Risk Note: This profit is volatile. If Bitcoin crashes next month, Equity will shrink.

Low Leverage: The company is mostly funded by owners ($749k) rather than debt ($280k). This gives them financial flexibility to borrow more if they need to expand rapidly in 2027.

The Income Statement (CMA 2026)

Introduction: The Movie vs. The Poster

Think of a company like a blockbuster movie. The Balance Sheet is the movie poster. It’s a frozen moment in time—the glamorous shot of the heroes looking strong. It tells you who is in the movie (Assets) and who paid for the costumes (Liabilities/Equity).

The Income Statement? That represents the actual movie. It is the footage. It captures the action, the drama, the explosions, and the plot twists over a period of time.

For the 2026 CMA exam, the IMA doesn't want you to be a film critic who just memorizes the cast list. They want you to be the Director. They want you to understand how the story is told, how to edit out the noise, and how to use modern tech to predict the sequel.

1. The Plot: Did We Win or Lose?

At its heart, the Income Statement answers one brutally honest question: Did we actually accomplish anything this year?

The script is simple:

Net Income=(Revenue−Expenses)+(Gains−Losses)

But here is the trap for new players: Net Income is just the main plot. There is a spin-off called Comprehensive Income.

Net Income: Goes to Retained Earnings. This is the money we can re-invest or buy pizza with.

Other Comprehensive Income (OCI): This is the "behind the scenes" footage (like currency adjustments). It skips the Income Statement and goes straight to Equity. Don't confuse the main plot with the behind-the-scenes features.

2. The Format: Single-Step vs. Multi-Step

Imagine trying to watch a movie where all the scenes are shuffled randomly. That is a Single-Step Income Statement. It dumps all revenues in one bucket and all expenses in another. It’s technically correct, but it’s terrible storytelling.

The CMA exam (and Wall Street) prefers the Multi-Step Format. This organizes the movie into "Acts," allowing you to judge performance at different levels:

Act I: Gross Profit (The Product).

Revenue minus Cost of Goods Sold (COGS).

The Story: Is our actual product profitable? If you sell lemonade for $1.00 but the lemons cost $1.50, your movie ends here. No amount of accounting magic can save you.

Act II: Operating Income / EBIT (The Business).

Gross Profit minus Operating Expenses (SG&A).

The Story: The product is good, but is the company functional? Are we spending too much on the CEO’s private jet or the marketing budget? This measures management's skill.

Act III: Net Income (The Bottom Line).

After interest and taxes.

The Story: This is what’s left for the shareholders after the government and the banks take their cut.

3. Revenue Recognition: The "Don't Count Your Chickens" Rule

In the old days, you booked revenue when the check cleared. In 2026 (under ASC 606), you book revenue when you fulfill a promise.

Think of it like a gym membership. If "TechFlow 2026" sells a $1,200 annual subscription on January 1st, they have $1,200 in cash, but zero revenue. Why? Because they haven't done anything yet.

The 5-Step Model is your script for when to clap:

The Handshake: Identify the contract.

The Promises: What are we delivering? (Software? Support? Training?)

The Price Tag: How much is the whole deal worth?

The Split: Assign a price to each promise.

Action: Recognize revenue only as you do the work (e.g., $100/month).

The Vibe: Revenue is earned, not just collected.

4. Expenses: The Law of Karma (Matching Principle)

In accounting, every action has an equal and opposite reaction. You cannot claim the glory of a sale without admitting the pain of the cost to get there.

Product Costs (COGS): These are attached to the product like a shadow. You buy leather to make shoes. You cannot expense that leather until the shoes are sold. Until then, the cost sits on the Balance Sheet in "Inventory" limbo.

Period Costs (SG&A): These are attached to the calendar. The rent for the factory is due whether you make 1 shoe or 1,000. Expense it immediately.

A Note on Depreciation: Depreciation isn't about valuation; it's about fairness. If you buy a $100k robot that lasts 10 years, it’s unfair to dump a $100k expense on Year 1 and $0 on Year 2. You spread the pain out so it matches the years the robot helps you make money.

5. Plot Twists: The "Irregular" Items

Every now and then, something weird happens. As a CMA, you need to tell the audience (investors) whether this is a recurring villain or a one-time cameo.

A. Discontinued Operations (The Break-Up)

If Ford decides to stop making sedans to focus on trucks, that is a strategic shift. We handle this like a breakup.

We move the results of the "Sedan Division" to the very bottom of the page.

We report it Net of Tax.

Why? So investors can look at the top of the page and see the "Continuing Operations"—the future of the company—without the noise of the ex-partner.

B. The Death of "Extraordinary Items"

There used to be a category for "Extraordinary Items" (like a volcano erupting in Nebraska). Update for 2026: This category is dead. GAAP eliminated it. Now, even weird events are part of "Continuing Operations."

6. EPS: Slicing the Pizza

Earnings Per Share (EPS) is the most famous number in finance. Imagine Net Income is a pizza. EPS tells you how much pizza each share of stock gets.

Basic EPS: The pizza divided by the people currently at the table.

Diluted EPS: The "Paranoid Scenario." This asks: "What if everyone who has a coupon (stock options) or a VIP pass (convertible bonds) showed up right now to eat?"

7. GAAP vs. IFRS: The Cultural Differences

Since you are taking a global exam, you need to know the local customs.

FeatureUS GAAP (USA)IFRS (International)

InventoryAllows LIFO (Last-In, First-Out). We like it because it lowers taxes when prices rise.LIFO is banned. It makes no physical sense.

MistakesIf you write down the value of inventory, it stays down. No take-backs.If the value recovers, you can reverse the write-down. Optimism is allowed.

FormatFlexible. No strict list of required line items.Strict. Must list finance costs and tax expense explicitly.

8. The 2026 Edge: You Are Not a Calculator

Here is the reality of the 2026 exam: The robots have won the math war. Software can calculate the Gross Margin in 0.002 seconds. The exam doesn't test if you can add; it tests if you can analyze.

Don't just calculate variance; explain it. Why did Gross Margin drop? Was it higher material costs, or did we offer too many discounts?

Continuous Accounting: The books don't close at the end of the month anymore; they close every second. Your job is to monitor the live stream.

Predictive Analytics: Use the historical data to draw a line into the future. Regression analysis isn't just for statisticians; it's for CFOs.

Final Takeaway: The Storyteller

When you sit for Part 1 of the CMA in 2026, don't just look for the right number. Look for the story.

If a company has high Net Income but plummeting Operating Income, they might be selling off assets to hide a failing business model. If they have huge Revenue but no Cash Flow, they might be "stuffing the channel" with fake sales.

You are the doctor, the director, and the detective. The Income Statement is your evidence. Read it carefully.

The Narrative of Numbers: Orion Robotics FY2026

To: The Board of Directors & Strategic Planning Committee From: Corporate Controller Subject: The Story Behind the Statement – Transitioning from Playthings to Powerhouses

We often treat the Income Statement as a scorecard—did we win or lose? But for fiscal year 2026, Orion Robotics’ Income Statement is not just a scorecard; it is a manifesto.

We are witnessing a metamorphosis. We have shed the skin of a toy company to reveal an industrial automation titan. A standard single-step statement would blur this reality. By using the Multi-Step Format, we are carefully dissecting our anatomy to show investors exactly which muscles are strong and which limbs we had to amputate to survive.

Here is the narrative of our year, decoded.

I. The Top Line: Reality vs. Invoices

Net Sales: $4,300,000

In accounting, as in life, it’s not about what you ask for; it’s about what you keep.

We invoiced $4.5 million in Gross Sales. However, the "Top Line" that matters is the $4.3 million Net Sales. Why the gap? The $200,000 in Returns & Allowances.

The Controller's Pulse Check: In the toy business, returns meant a kid didn't like the color. In industrial robotics, a return means a gyroscope failed in a warehouse. This number is our "Quality Control Metric."

The "Matching Principle" in Action: We booked this deduction now. We don't wait for the client to ship the defective unit back in January 2027. We take the hit in 2026 because that’s when the revenue was recognized. It is painful, but it is honest.

II. The Core Engine: Gross Profit

Gross Profit: $2,200,000

This is where the rubber meets the road—or rather, where the lithium meets the carbon fiber.

After stripping away the direct costs of manufacturing (COGS)—the batteries, the assembly labor, the factory electricity—we are left with $2.2 million.

Gross Margin=4,300,0002,200,000≈51.1%

Why this excites me: A 51% margin is the hallmark of a premium technology player. If we were selling commodities, this would be 20%. This number tells the Board that we have Pricing Power. Our clients aren't buying a drone; they are buying an efficiency solution, and they are willing to pay a premium for it.

III. The "Middle Line": Operating Expenses

Total OpEx: $1,550,000

If COGS is the cost of the product, Operating Expenses are the cost of time and talent.

Selling ($450k): The fuel for our growth engine (commissions and ads).

Admin ($800k): The infrastructure. I am flagging this. When admin costs outpace sales growth, companies become sluggish. We need to watch this "overhead bloat" in 2027.

R&D ($300k) – The Gamble:

The GAAP Reality Check: Under US GAAP, we expensed this $300k immediately. We took the hit to our profit today for technology that might not pay off until 2028.

If we were in Europe using IFRS, we might have "capitalized" this, hiding the cost on the Balance Sheet. But we are taking the conservative route. We are telling investors: "We are spending cash now to invent the future."

IV. The Verdict: Operating Income (EBIT)

Operating Income: $650,000

This is the most critical number on the page.

Forget the taxes (government mandated) and the interest (bank mandated). This number asks: Is the core business of making industrial drones actually viable?

The answer is a resounding YES. We generated $650k in pure operational profit. This covers our interest payments ten times over. The heart of Orion is healthy.

V. Noise Below the Line

Interest & Gains

We separate these to keep the "story" clean.

Interest Expense ($60k): The cost of leverage.

Gain on Equipment ($40k): We sold an old machine. This is "lucky money." We isolated this so analysts don't accidentally assume we will sell a machine for a profit every single year.

VI. The Tax Logic: Intraperiod Allocation

Income from Continuing Ops (After-Tax): $472,500

Tax allocation sounds complex, but the philosophy is simple: Let the tax follow the income.

We calculated the tax only on the robotic operations first.

630,000×0.25=157,500 (Tax Expense)

This leaves us with $472,500. This is the number analysts should plug into their spreadsheets for 2027 projections. It represents the sustainable, recurring earnings of Orion Robotics.

VII. Discontinued Operations: Cutting the Anchor

Net Loss from Discontinued Ops: ($75,000)

This line item represents our past: The Toy Division. We shut it down. It cost us money to close the doors, resulting in a pre-tax loss of $100,000.

The Silver Lining (Tax Benefit): Because Orion is profitable, the IRS allows us to use that $100k loss to offset our gains.

The Loss: ($100,000)

The Tax Savings (25%): +$25,000

The Net Hit: ($75,000)

By isolating this at the bottom of the statement, we are signaling to the market: "This $75k loss is a scar, not a wound. It is healed, it is gone, and it will not bleed into 2027."

VIII. The Headline: Earnings Per Share (EPS)

Wall Street loves a single number, but a single number lies.

Net Income EPS ($0.80): The official bottom line.

Continuing Ops EPS ($0.95): The real value.

Strategic Narrative: If we only show the $0.80, the market undervalues us. We must direct their eyes to the $0.95. This metric proves that for every share an investor owns, our actual business generated 95 cents of profit. The 15-cent drag from the toy division is history.

Controller's Summary

The Fiscal Year 2026 Multi-Step Income Statement is a declaration of intent.

We are efficient: 51% Gross Margins prove it.

We are conservative: Expensing R&D proves it.

We are focused: Disposing of the toy division proves it.

Orion Robotics is no longer playing games. We are building the industrial future, and our financials finally reflect that reality.

The Autopsy of a Fiscal Year: Orion Robotics (2026)

An Income Statement isn't just a spreadsheet; it is a story of triumphs, failures, expensive lessons, and the literal cost of doing business. For Orion Robotics, 2026 was a year of shedding dead weight and doubling down on heavy industry.

Here is how the chaos of the real world translated into the bottom line.

Part 1: The Narrative Feed (The "Real" Story)

Before we get to the clean final numbers, we have to look at the messy reality of the last 12 months.

1. The Hero Product (Gross Sales) The "Atlas-X" Industrial Drone was the star of the show. We didn't just sell units; we moved heavy metal. We shipped 150 units to logistics giants like Amazon and FedEx. At $30k a pop, the revenue engine was roaring.

The Scoreboard: $4,500,000 in Gross Sales.

2. The Reality Check (Returns & Allowances) Hardware is hard. A batch of gyroscopes failed calibration, forcing five clients to return their units for a full refund ($150k). Another client found scratches on the chassis; rather than ship them back, we cut them a deal and knocked $50k off the price. It hurts, but it keeps the relationship alive.

The Hit: $200,000 lost to quality control issues.

3. The Guts of the Machine (COGS) You can’t build a drone out of thin air. It takes lithium, carbon fiber, and highly skilled labor. We burned through $1.2M in raw materials and paid our assembly team $600k. Keeping the factory lights on and the machines running cost another $300k.

The Cost: $2,100,000 to build what we sold.

4. Keeping the Lights On (OpEx) This is the "overhead" beast. We had to pay the salespeople to close those Amazon deals ($450k), pay the executives and lawyers to steer the ship ($800k), and fund the "mad scientists" in the back room working on the Next-Gen AI prototype ($300k).

The Burn: $1,550,000 in Operating Expenses.

5. The Garage Sale & The Bank (Other Items) We had to pay the bank $60k in interest on our startup loans. However, we found a silver lining: an old hydraulic press gathering dust in the back. Book value said it was worth $10k; we managed to sell it for $50k.

The Result: A net cost of $20,000 (Interest outweighing the gain).

6. Cutting the Dead Limb (Discontinued Ops) It was time to admit defeat on the "Robo-Pup" toy division. It was a distraction. We shut it down, paid the severance, and broke the lease. It cost us $100k upfront, but it stops the bleeding for next year.

The Loss: $100,000 (Pre-tax).

7. The Tax Man The government takes their slice: 25%. However, the tax code works both ways—while they tax our profits, they also give us a tax break on that massive loss from the Robo-Pup division.

Part 2: The Financial Portrait (Multi-Step Income Statement)

When we organize that narrative into "Good Form," it provides a clear cascade from top-line hype to bottom-line reality.

Orion Robotics Inc. Income Statement For the Year Ended December 31, 2026

ItemDetailSubtotalTotal

Sales Revenue

Gross Sales (The "Atlas-X" Revenue)$4,500,000

Less: Sales Returns & Allowances($200,000)

Net Sales$4,300,000

Cost of Goods Sold (COGS)($2,100,000)

Gross Profit (What we made on the hardware)$2,200,000

Operating Expenses

Selling Expenses (Commissions/Ads)$450,000

General & Admin (Salaries/Rent)$800,000

R&D (The Future Tech)$300,000

Total Operating Expenses($1,550,000)

Operating Income (EBIT)$650,000

Other Revenues, Gains, Expenses & Losses

Interest Expense($60,000)

Gain on Sale of Equipment$40,000

Total Other Items($20,000)

Income from Continuing Operations (Pre-Tax)$630,000

Income Tax Expense (25%)($157,500)

Income from Continuing Operations (After-Tax)$472,500

Discontinued Operations

Loss from "Robo-Pup" Division (Pre-Tax)($100,000)

Less: Income Tax Benefit (25%)$25,000

Net Loss on Discontinued Operations($75,000)

Net Income$397,500

Part 3: The Shareholder's Takeaway (EPS)

What does this mean for the people holding the stock? Based on 500,000 shares, here is the breakdown of value per ticket.

MetricThe StoryEPS Value

Continuing OperationsIf we only look at the healthy part of the business (The Atlas-X drones), we are profitable.

$0.95

Discontinued OpsThe failure of the "Robo-Pup" division dragged down the share value, but it's a one-time hit.($0.15)

Net IncomeThe final walk-away profit per share.$0.80

Summary Analysis

Orion Robotics is fundamentally healthy. The core business (Continuing Operations) is generating nearly a dollar per share. The final Net Income ($397,500) looks lower strictly because the company made the brave decision to amputate a failing limb (The Toy Division). Next year, without the "Robo-Pup" losses, the bottom line should instantly spring back up.

Mastering Statement of changes in equity & Statement of cash flows

Welcome to the future of the CMA.

If this were 2015, I’d tell you to memorize formats and punch numbers into a calculator until your fingers cramped. But it’s 2026. The bots are doing the data entry. The AI is handling the reconciliations.

So, what is left for you? The Story.