5 Study Tips for CPA Canada Performance Management (PM) Module

If you’ve made it to the elective modules, you’ve been successful at Core 1 and Core 2, congrats! While some candidates find the Performance Management (PM) module to be overwhelming with both qual and quants, others find it overlaps with Core 2, so it’s easier to study. Below are some helpful tips for succeeding in the PM module.

#1: Don’t Forget The Qualitative

Many candidates think of calculations (quants) when they think of performance management. However, ~70% of the AOs will be qualitative, while ~30% quantitative. The practice cases will require concise and specific explanations, while integrating case facts.

Some examples of qual. include:

  • When preparing variance analysis, you’ll be asked to explain what the variance implies and identify potential causes, based on case facts.
  • For ratio analysis, you’ll be required to discuss the results of efficiency, liquidity, and solvency ratios. You’ll also be asked to identify causes and compare to industry benchmarks or prior years.
  • When asked to assess responsibility centers, you’ll be asked to identify the type of center the division is and make a suggestion on how to evaluate performance.
  • When asked to help with a decision, such as capital investment, purchase, acquisition, partnership, outsourcing, etc., you may be required to perform a pro/con analysis, in addition to quant analysis.

A good formula for writing pro/con qual analysis is: case fact + interpretation/explanation + impact (operating and financial) + integration.

Most candidates miss the “impact” and “integration” elements, which drops them to RC/NC. Impact means how and why the case fact is important to the company. Think of  impact as: “how are the company’s operations and financials affected.” For example, here are some operating impacts:

  • New market access
  • Geographic expansion
  • Enhance brand awareness
  • Employee morale
  • Lead to synergies
  • Give competitive advantage
  • Help to retain customers
  • Improve the supply chain
  • Cause delays in delivery
  • Enhance company reputation
  • Access to new technology
  • Tap into growing market

Here are examples of financial impacts:

  • Improve sales
  • Improve profits
  • Improve the bottom line
  • Improve ratio X
  • Decrease costs
  • Help with cash flow constraints
  • Help with covenants

You can write either operating or financial impact, or both. I recommend both (see example below).

Integration means connecting to the big picture (eg M/V/V, KSF, objectives, user preferences, etc).

You should use “connecters” to tie these 4 elements together. Some examples of connectors include: which means, therefore, as such, as a result, consequently, while, etc.

Let’s look at an example of a “perfect qual”. Here’s a con that’s written in-depth (C/CD):

You have no prior experience in the clothing industry. This means you may not be able to buy the right amount of clothing in appropriate sizes and styles. As such, the store could be left with a large quantity of unsaleable clothing, or it may not have enough stock of the popular styles, which could affect the store’s reputation and be costly, while reputation is one of values of your company.

1. Case fact: You have no prior experience in the clothing industry.
[Connector: This means]
2. Interpretation/explanation: You may not be able to buy the right amount of clothing in appropriate sizes and styles.
[+Connector: As such]
3. Impact (operating and financial): The store could be left with a large quantity of unsaleable clothing, or it may not have enough stock of the popular styles, which could affect the store’s reputation and be costly. (Note: “Reputation” is operating impact, “costly” is financial impact).
[+Connector: While]
4. Integration: Reputation is one of values of your company.

A good method to practicing qual is to compare your response to the solutions while debriefing. CPA Canada case solutions are typically lengthy and unrealistic under exam situation. However, for PM qual AOs, you should write at the same length and depth as the solutions to ensure you get C. I suggest that you re-write the required, compare your response to the solution, and identify what elements you’re missing using the formula above.

#2: Identify The Appropriate Calculation

Being able to identify the most appropriate analysis (“quants tool“) will help you save time when writing cases. Identifying the user’s ask (i.e. the ultimate goal of the calculation), the financials available to you, and the time frame will help you isolate what quant tool you need.

Some examples include:

  • When reviewing potential capital investments, you can choose NPV (Net Present Value) or IRR (Internal Rate of Return). NPV is more appropriate when you have the discount rate, long-term projects, or when you need to find the potential surplus from a project. IRR is more appropriate for short-term projects or when you have benchmark rate to compare to.
  • Opportunity costs should be considered when there is potential forgone income or expenses between multiple options. For example: outsourcing vs insourcing, operating capacities, closing down a division, or adding a new product.

There are several other quants tools: Payback, CM analysis, ratio analysis, break-even point (BEP), valuation, constraint, product mix, pricing, net advantage of leasing (NAL) and so on. MA Templates toolkit is a great resource to master these.

#3: Consider the Big Picture

For many of the assessment opportunities (AOs), it’s important to realize the content is often big-picture focused. Big picture means you’re asked to assess the overall strategy and make suggestions that align with company’s values or user objectives.

Some examples include:

  • You’re asked to help with deciding to pursue a new business venture. You should write about alignment with user preferences, integrating the company’s mission, vision, values (M/V/V).
  • In some cases, you may be asked for suggestions on how to revise the mission or vision, based on strengths and weaknesses of the company. You should discuss the current M/V/V with their strengths/weaknesses, what ideal M/V/V should look like, and suggest new ones.
  • You’re asked to identify major risks and discuss the impact on the overall strategy. You should perform a variation of WIR analysis (Weakness + Implication + Recommendation) called RIM (Risks + Implication + Mitigation).
  • You’re asked to address strategic decisions or perform external environment analysis. You should perform a Porter’s 5 Forces, SWOT (Strengths, Weakness, Opportunity, Threat) or PESTEL (Political, Economical, Social, Technological, Environment, Legal).

Keep the big picture items in mind when addressing each of the above AOs, while making recommendations that are practical and realistic for the company.

#4: Understand Integration of Various AOs

One of the challenges you’ll face in the PM module is the integration of AOs. Many appendices and calculations will overlap and you’ll need to use case facts interchangeably.

Some examples include:

  • Discount rate is provided in one appendix, while NPV analysis will be required in various external and internal projects. You’ll need to note the discount rate in your case outline, so that you can use it in different AOs.
  • You’re given financials, such as Income Statement, and you’ll use it for Cash Flow forecast and valuation AOs.
  • You’re asked to calculate CM (contribution margin), which is later used for beak-even analysis, target sales or deciding which product to pursue given an input constraint.

Understanding the various quants tools and having an organized case outline will help you answer these integrated AOs.

#5: Practice Time Management

Because there is a mix of qual and quant analysis, it’s important to manage your time effectively. For each AO, you should be allocating your time appropriately during your planning phase, by considering: complexity of the AO, whether both quant and qual are required, size of the appendix (ie, number of case facts to read), how well you know the topic, and ranking of issues (ie, does one AO impact the other and should be done first).

This will come with practice, so actively track your time as you practice cases. Sticking with the time and learning when to walk away from an AO will set you up for success.


To be successful in the CPA Canada PM module, you should practice a balance of well laid out quants, case specific and detailed quals, big picture integration, and time management. Extra study resources are available in the PM Review course.