Find Courses > CFO Guidebook

CFO Guidebook #362426

Course Overview

Credit

Amount

CPA

Course Author: Steven M. Bragg, CPA Field of Study (CPA): Finance

Course Description

Course publication/revision date: This course was updated on 7/24/2026.

The CFO manages the financial structure and oversees the financial performance of an organization, so this is a critical and demanding management position. The CFO Guidebook provides the CFO with detailed advice regarding how to be most effective in every aspect of the job. The course covers all parts of the CFO’s traditional finance role, including budgeting, fundraising, investments, going public, investor relations and share management. It goes on to address more recent additions to the job, such as strategic planning, risk management, the control environment, and information technology. Given its comprehensive coverage of the CFO position, The CFO Guidebook can serve as a reference manual for anyone wanting to become more effective in the position.

Table of Contents

Chapter 1 - The CFO Position1

The CFO Job Description	1
The Controller Job Description	3
CFO and Controller Differences	4
Accounting Training for the CFO	5
The CFO Organizational Structure	5
Relations with the Chief Executive Officer	7
Relations with the Board of Directors	8
Relations with the Audit Committee and Auditors	9

Chapter 2 - Strategic Planning11

Strategy Overview	11
SWOT Analysis	12
Competitor Analysis	13
Five Forces Analysis	14
Types of Strategies	17
Risk Analysis	18
A Tight Strategic Focus	19
Pacing	20
Acquisition Strategy	21
Outsourcing	22
The Consideration of Cash in Strategy	23

Chapter 3 - Risk Management25

Risk Management	25
The Role of the CFO	26
Risk Identification	27
Risk Quantification Issues	27
Risk Ranking	28
The Risk Profile	30
Risk Planning	31
Insurance	32
Data Security Risk	35
Supply Chain Risk	35
Political Risk	36
Foreign Exchange Risk Overview	37
Foreign Exchange Risk Management	39
Take No Action	39
Avoid Risk	39
Shift Risk	40
Time Compression	41
Payment Leading and Lagging	41
Build Reserves	41
Maintain Local Reserves	42
Hedging	42
Types of Foreign Exchange Hedges	43
Loan Denominated in a Foreign Currency	43
The Forward Contract	43
The Futures Contract	45
The Currency Option	45
The Cylinder Option	46
Swaps	47
Netting	48
Interest Rate Risk Overview	49
Interest Rate Risk Management	49
Take No Action	49
Avoid Risk	49
Asset and Liability Matching	50
Hedging	50
Types of Interest Rate Hedges	50
The Forward Rate Agreement	50
The Futures Contract	52
The Interest Rate Swap	54
Interest Rate Options	55
Interest Rate Swaptions	58
Risk Management Themes	59

Chapter 4 - The Control Environment62

The Genesis of Accounting Controls	62
The Proper Balance of Control Systems	63
The Nature of Risk	64
Control Principles	65
The Failings of Internal Controls	67
Preventive and Detective Controls	67
Manual and Automated Controls	68
Constructing a System of Controls	68
Special Case - Acquisitions	69
Special Case – Rapid Growth	69
Control System Documentation	70

Chapter 5 - Performance Measurement73

Cash Conversion Cycle	73
Days Sales in Accounts Receivable	74
Days Sales in Inventory	75
Days Payables Outstanding	75
Free Cash Flow	76
Working Capital Productivity	77
Cash Reinvestment Measurements	78
Cash Reinvestment Ratio	78
Funds-Flow Adequacy Ratio	79
Contribution Margin Ratio	80
Core Earnings Ratio	80
Quality of Earnings Ratio	81
Breakeven Point	82
Margin of Safety	83
Return on Equity	84
Return on Assets	87
Return on Assets	87
Return on Operating Assets	88
Affordable Growth Rate	90

Chapter 6 - Mergers and Acquisitions94

Acquisition Strategies	94
The Failings of Acquisition Strategy	96
Acquisition Due Diligence	96
Indicators of a Strong Acquisition Candidate	101
Acquisition Valuation	102
Forms of Acquisition Payment	107
The Stock-for-Stock Exchange	107
The Debt Payment	109
The Cash Payment	109
The Acquisition Legal Structure	110
Tax Issues	110
Issues with Stock Purchases	111
Gain Recognition Avoidance Rules	111
Type “A” Acquisition	112
Type “B” Acquisition	112
Type “C” Acquisition	113
Triangular Merger	113
Reverse Triangular Merger	113
Asset Purchase	114
Acquisition Integration	115
General Integration Concepts	115
Function-Specific Integration Issues	115
Integration for the Serial Acquirer	116
Divestitures and Spinoffs	117

Chapter 7 - Budgeting and Forecasting121

The Advantages of Budgeting	121
The Disadvantages of Budgeting	122
Capital Budgeting Problems	123
The Command and Control System	124
Behavioral Impacts	125
Bureaucratic Support	125
Information Sharing	126
The System of Budgets	126
Operating Decisions Impacting the System of Budgets	130
The Reasons for Budget Iterations	131
Alternatives to the Budget	132
Forecasting without a Budget	133
Capital Budgeting	134
Goal Setting without a Budget	135
Strategy without a Budget	136
Management Guidelines	137
The Role of Senior Management	137
Compensation without a Budget	138
Behavioral Norms	140
Information Exchange	141
Accounting Reports	141
The Rolling Forecast	143
The Rolling Forecast Format	144

Chapter 8 - Product Pricing149

Psychological Pricing	149
Cost-Plus Pricing	150
Dynamic Pricing	151
Freemium Pricing	152
High-Low Pricing	154
Premium Pricing	154
Time and Materials Pricing	156
Value Based Pricing	157
Other Pricing Strategies	159
Internet Pricing	159
Price Elasticity of Demand	160
Cross Price Elasticity of Demand	162
Non-Price Determinants of Demand	163

Chapter 9 - Capital Budgeting165

CFO Responsibilities	165
Overview of Capital Budgeting	167
Bottleneck Analysis	168
Net Present Value Analysis	168
The Payback Method	170
The Outsourcing Decision	171
The Lease versus Buy Decision	172
Capital Budgeting During a Trade War	173
The Post Installation Review	174

Chapter 10 - Cash Management177

The Cash Forecast	177
The Short-Term Cash Forecast	178
The Medium-Term Cash Forecast	181
The Long-Term Cash Forecast	182
The Use of Averages	182
The Use of Clearing Dates in a Forecast	183
Cash Forecast Reconciliation	184
The Need for Cash Concentration	184
Cash Sweeping	186
The Zero Balance Account	186
Multiple Sweep Arrangements	187
Manual Sweeping	187
Sweeping Rules	187
Sweeping Problems	188
Sweeping Costs	188
Notional Pooling	190
Notional Pooling Problems	190
Notional Pooling Costs	191
Multi-Tiered Banking	191
Cash Concentration Best Practices	192
Cash Concentration Alternatives	192

Chapter 11 - Investment Management196

Investment Guidelines	196
Investment Strategy	199
Repurchase Agreements	201
Time Deposits	201
Certificates of Deposit	202
Bankers' Acceptances	202
Commercial Paper	202
Money Market Funds	203
U.S. Government Debt Instruments	203
State and Local Government Debt	203
Bonds	204
The Primary and Secondary Markets	204
The Discounted Investment Formula	205
The Effective Interest Rate	205

Chapter 12 - Fundraising with Debt208

Overview of Debt Funding	208
The Line of Credit	209
The Borrowing Base	209
Invoice Discounting	211
Factoring	211
Inventory Financing	212
Purchase Order Financing	212
Leases	212
The Long-Term Loan	213
Agency Financing	214
Other Lending Alternatives	214
Improving Upon Prepayment Terms	214
Floating-Rate Notes to Individuals	214
Debt Covenants	215
Lender Relations	216
Debt Risk Issues	217
Deleveraging	218

Chapter 13 - Fundraising with Equity221

Overview of Equity Funding	221
Restricted Stock	222
Unrestricted Stock	222
The Accredited Investor	223
Regulation D Stock Sales	223
Warrants	225
Regulation A Stock Sales	225
Angel Investors and Venture Capital	226
Debt for Equity Swaps	227

Chapter 14 - Credit Rating Agencies230

The Credit Rating Environment	230
The Rating Process	232

Chapter 15 - Going Public and Going Private236

Reasons for and Against Going Public	236
The Initial Public Offering	237
The Reverse Merger Concept	240
Advantages and Disadvantages of the Reverse Merger	241
The Price of a Shell	242
Shell Due Diligence	243
Trading Volume	244
Other Reverse Merger Issues	245
Rule 144	245
The Reverse-Forward Split	246
Going Private	246

Chapter 16 - Stock Exchanges250

Stock Exchange Overview	250
The New York Stock Exchange	251
The NYSE American	252
The NASDAQ	253
The NASDAQ Global Select Market	253
The NASDAQ Global Market	254
The NASDAQ Capital Market	255
Delisting from an Exchange	256

Chapter 17 - Investor Relations258

Investor Relations Overview	258
The Earnings Call	259
Guidance	261
The Road Show	264
The Fundraising Road Show	264
The Non-Deal Road Show	265
The Road Show Presentation	266
Regulation FD	267
Short Sellers	269

Chapter 18 - Public Company Financial Reporting272

Interim Reporting	272
The Integral View	272
The Discrete View	273
Comparison of the Integral and Discrete Views	274
Interim Reporting Issues	274
Segment Reporting	274
Primary Segment Reporting Issues	275
The Segment Report	276
Earnings per Share	277
Basic Earnings per Share	277
Diluted Earnings per Share	279
Presentation of Earnings per Share	282
The Public Company Closing Process	282
The Form 10-Q	283
The Form 10-K	285
The Form 8-K	288

Chapter 19 - Share Management293

Float Management	293
Activities to Increase the Float	293
Activities to Delay Stock Sales	294
The Direct Stock Purchase Plan	294
The Employee Stock Purchase Plan	295
Dividend Reinvestment Plans	295
Stock Splits	295
Dividend Payments	296
The Stock Buyback Option	297
The Stock Repurchase Safe Harbor Provision	298
Odd Lot Shareholders	299

Chapter 20 - Information Technology302

Types of Information Technology	302
Technology Ranking Methods	304
Technology Usage Based on Strategy	304
Cloud Computing	305
GRC Software	306
Enterprise Resource Planning Systems	306
Sales Force Automation Software	307

Answers to Chapter Questions310

Glossary332

Index338

Course Details

Author: Steven M. Bragg, CPA

Steven Bragg, CPA, has been the chief financial officer or controller of four companies, as well as a consulting manager at Ernst & Young. He received a master’s degree in finance from Bentley College, an MBA from Babson College, and a Bachelor’s degree in Economics from the University of Maine. He has been a two-time president of the Colorado Mountain Club, and is an avid alpine skier, mountain biker, and certified master diver. Mr. Bragg resides in Centennial, Colorado. He has written more than 300 books and courses, including New Controller Guidebook, GAAP Guidebook, and Payroll Management.

Publication/Revision Date: 7/24/2026

Course Exam Questions (online): 120 (multiple-choice)

Program Delivery Method: NASBA QAS Self-Study

Available Formats of Course Text: PDF or PDF plus printed copy sent in the mail

Course Level, Prerequisites, and Advance Preparation Requirements

License	Course Level	Prerequisites	Advance Preparation Requirements
CPA	Overview	None	None

* This program is appropriate for professionals at all organizational levels.

Sponsor ID Numbers

National Registry of CPE Sponsors ID: 107615

State CPA Board Sponsor ID Numbers (where applicable)

Florida Division of Certified Public Accounting: 0004761

Hawaii Board of Public Accountancy: 14003

New York State Board for Public Accountancy: 002146

Ohio Accountancy Board: CPE .51 PSR

Pennsylvania State Board of Accountancy: PX178025

Texas State Board of Public Accountancy: 009349

Learning Objectives

As a result of studying the course material, you should be able to meet the objectives listed below:

Identify the key responsibilities of the CFO position, and key aspects of CFO relations with the controller and CEO.
Specify the stages in strategy development, strategy types, and the role of the CFO in strategy.
Cite the methods for identifying and mitigating risks, especially in regard to foreign exchange risk and interest rate risk.
Identify the types of controls, when they should be used, and the characteristics of better controls.
Recognize the characteristics of the cash conversion cycle.
Identify the strategies under which acquisitions are made, the steps in the due diligence process, the characteristics of a strong acquisition candidate, and the various methods for valuing an acquisition candidate.
Specify the advantages and disadvantages of budgeting, types of budgets, and how to operate without a budget.
Itemize the different types of product pricing, and the situations in which they are most useful.
Identify the methods and concepts used to evaluate capital budgeting proposals, as well as the alternatives to fixed asset acquisition.
State the methods used to construct and update a cash forecast, as well as the methods employed to concentrate cash for investment purposes.
Cite the available cash investment strategies and the more common investment instruments.
Identify the types of debt funding, and associated covenants.
Specify the types of equity funding, the investor rights associated with these instruments, and the types of investors who may invest in them.
Identify the main credit rating agencies, the types of credit ratings, and the process for obtaining and appealing a credit rating.
Specify the processes by which a company can go public or take itself private, and the reasons for going public or private.
Cite the reasons for being listed on a stock exchange, and the qualifications for listing on the various exchanges.
Identify the participants in and topics covered by an earnings call, the use of guidance, the topics covered in a road show, and the regulations governing investor relations.
Identify the major public company reports, key reporting concepts, and the method by which reports are filed with the Securities and Exchange Commission.
Specify how float can be increased, as well as alternative methods for selling shares.
State how competitive advantage can be gained from the use of information technology (IT), as well as how to manage risk with IT.