This calculation, which is a spin-off calculation of Collected Balances Required (CBR), is an important bank relationship management tool that can be used where you are compensating your banks for services with balances rather than with fees. It indicates the amount of additional collected balances required to cover one dollar of additional services. For example, let's assume that the Balance Multiplier for one of your banks is $270 and the bank relationship manager is sitting across your desk and suggesting that you consider using a new service that the bank has to offer. Since you are compensating the bank with balances and this new service will increase the monthly service charge by $500 you can quickly make a rough estimate that your CBR will increase by approximately $150,000 (you do this by rounding $270 up to $300 and multiplying it by $500).

As a practitioner I used the Balance Multiplier in many situations such as the one outlined in the above example and therefore I understand its value as an important tool for managing the bank relationship. So, even though it is not expanded upon in the BOK, I think it could be on the exam as a calculation question. And since it is a spin-off calculation of the CBR, I'd like to first simplify the CBR equation as follows, so that it might be easier to memorize:

                                  CBR    =   SC   x   365 / ECR   x   .9    x   Days

            Where:            SC   =   Monthly Service Charge

                                   ECR   =   Earnings Credit Rate

                                    .9      =   (1 - Reserve Requirement @ 10%)

                                   Days =   Days in Month

The Balance Multiplier equation is the same as the CBR equation except that it assumes a SC equal to $1, like so

           Balance Multiplier  =   $1    x    365 / ECR   x   .9   x   Days

                                            =    365 / ECR   x   .9   x   Days

-          George Schilling, CTP

Exhibit 3.3 References: AFP Learning System, Treasury, Module One, Chapter 3, Pg. 1-150

                                           ETM 3^rd ED., Chapter 3, Pg 106

Ratio Analysis is a primary analytical tool for evaluating historical financial performance against both internal financial benchmarks and industry standards. However, another financial performance evaluation tool, Common-Size Statement Analysis, can also be used for this purpose, but much more narrowly, to make similar financial performance comparisons. Since the BOK doesn't devote very much discussion to this topic, I think that an exam question designed to test your understanding of it would fall into the category of a "drill-down" question. So I believe that some study of this subject is warranted so that you gain an understanding of how common-size benchmarks are determined and how they are used to evaluate financial performance. 

This analytical tool expresses the components of the Income Statement and the Balance Sheet as percentages of their respective totals. In the case of the Income Statement, for example, the components of Cost of Goods Sold and Operating Expense are divided by Net Profit and expressed as a percentage. Also, the various Profit Margins that are discussed in the BOK are calculated this way (see my Blog: "Some Thoughts about Profit Margins").

In the case of the Balance Sheet, for example, the various asset categories are divided by Total Assets and expressed as percentages. The following are the asset categories from the sample Balance Sheet in the BOK expressed as percentages.

                     
Cash                                          10%

                     
Short -Term Investments           8%

                     
Accounts Receivable                 11%

                     
Inventory                                    17%

                     
Pre-Paid Expense                       6%

                     
Net PP&E                                   48%

The same procedure would also be applied to the components of Total Liabilities and Equity to determine their respective percentages for the purpose of performing Common-Size Statement Analysis.

This financial performance evaluation technique is based on the premise that companies in the same industry will have relatively the same percentages for the components of their financial statements. Given this, these "industry percentages" can serve as financial performance benchmarks for comparison purposes.

Here's an example, let's assume that the 10% Cash percentage mentioned above is an industry benchmark and our company is a member of that industry group. Now, if our Cash is 20% of Total Assets which is above the industry benchmark, investors will question our ability to profitably manage our assets. On the other hand, if our Cash is 5% of Total Assets which is below the benchmark, both investors and lenders will be concerned that we may have liquidity problems.

So, using Common-Size Statement Analysis as one of the techniques to evaluate the financial performance of your company gives you the opportunity to add the following, to your litany of  responses, to the almost daily question of, "How's Business?" which is, " We're in the zone"

-George Schilling, CTP

One of the methods used to measure a company's performance is to analyze the relationship between its revenue and the various expense categories that are delineated on the Income Statement. Prior to the 3^rd Ed. of the ETM, the discussion of this performance measurement method was mainly focused on Net Profit Margin, otherwise known in "finance-eze" as the "bottom line". However, in the 3^rd Ed. this discussion has been expanded to include three additional profit margin measures. Given this, I thought it might be useful to discuss each of the four profit margin ratios to help prepare you to answer potential exam questions that are designed to test your understanding of their definitions and more importantly, how each is differentiated from the others. So, let's start with Gross Profit Margin.

Gross Profit Margin (GPM)

Gross profit is the difference between Revenue and Cost of Goods Sold (COGS) and when it is divided by the Revenue and expressed as a percentage, it yields the GPM:

                GPM   =   Revenue - COGS / Revenue   =   Gross Profit   /   Revenue

GPM is a key measure of manufacturing performance because it represents the relationship  between the costs related to making the product and the revenue generated by the sale of that product. For example, when GPM is decreasing over time while revenue is increasing it " raises a red flag" that COGS might be in need of tighter cost control. Also, in many companies, GPM targets are used to determine the levels of compensation (salary and/or bonus) treatment for manufacturing management personnel.       

Operating Profit Margin (OPM)

Operating profit is the difference between Revenue and the total of COGS and Operating Expenses and when it is divided by Revenue and expressed as a percentage it yields OPM:

     OPM  =  Revenue  -  (COGS + Operating Expense) / Revenue  =  EBIT / Revenue

OPM is a key measure of overall operating performance because it represents the relationship between the total costs, of making and selling the product plus corporate overhead (i.e. administrative expenses), and the revenue generated by the sale of that product. Also, EBIT (Earnings before Interest and Taxes) is generally the same as OPM and for the purposes of the ETM and therefore for CTP exam questions, it is absolutely the same as OPM.

EBITDA Margin

This margin is essentially a hybrid performance measure because it combines EBIT, which is an "accounting profit" number, calculated in accordance with GAAP, with the "non-cash charges" of Depreciation and Amortization (see Blog 3, The Non-Cash Charge Enigma). By doing so, it restates EBIT and therefore Operating Profit on a cash flow basis, as follows:

 EBITDA Margin  =  ( EBIT + Depreciation & Amortization)  /  Revenue  =  EBITDA / Revenue

Net Profit Margin (NPM)

This margin, "the bottom line", reflects Operating Profit less all other expenses not related to the operations of the company such as, interest and taxes and plus other non-operating income items such as Comprehensive Income.

 Net Profit Margin   =   Revenue - (Operating Profit -/+ Non-Operating Items) / Revenue

                                 =   Net Income / Revenue

Simply stated, NPM measures the level of net profit generated on each dollar of revenue. For example, a company with a 10% NPM generates $.10 of net profit on every $1.00 of revenue.

-George Schilling, CTP

There are several yield equations in the BOK that you could potentially be tested on when you’re taking the CTP exam. So, I’ll be suggesting some study tips to help you prepare for exam questions where you will be required to recall and solve yield equations. I’d like to begin by putting the yield equations in their “operational context”. That is, answering the questions of “why” and “how” they are used to manage the short-term investment portfolio.

I found, when I was managing the short-term investment portfolio, that on any given day I would be offered a large variety of competing investment opportunities. And if two of these investments had relatively the same amount of low risk and similar maturity dates, then my only decision was to select the one with the highest yield. However, the investment with the highest yield is not always obvious since competing investments can be quoted on either a 360 or a 365 day year and to complicate matters more, can be sold on either an interest bearing or a discount basis. Given this, the annualized yield equations are used to “level the playing field” between two competing investments so that the portfolio manager can make an informed decision as to which investment has the highest yield.

So, I’ve put the yield equations that are covered in Chapter 11 of the BOK in the   following three categories with their suggested study tips.

Annualized Yield Equations: Discount Rate (DR), Money Market Yield (MMY) and Bond Equivalent Yield (BEY)

These three equations can be studied in two steps.

First, you must be able to recall the following equations:

     Dollar Discount           =   Par Value   -   Purchase Price

     Dollar Discount           =   Par Value x DR x Maturity Days / 360

     Discount Rate (DR)     =   $Discount / Par Value   x   360 / Maturity Days

Second, you only need to be able to recall how slight changes, shown in Bold, to the DR equation will give you the MMY and BEY equations, as follows:

  Money Market Yield (MMY)    =   Discount / Purchase Price   x   360 / Maturity Days

                                          Par Value changes to Purchase Price

  Bond Equivalent Yield (BEY)   =   Discount / Purchase Price   x    365 / Maturity Days

                                          Par Value changes to Purchase Price and 360 changes to365                                                                  

Commercial Paper Nominal Yield (CPNY)

GOOD NEWS!!!  You don’t have to learn this additional equation because if you can recall the (BEY) equation by using the “tip” outlined above, you’ve already got it.

    CPNY    =   $ Discount / Purchase Price    x    365 / Maturity Days

Holding Period Yield (HPY)

This equation does not annualize the yield of an investment and as such is not used to  “level the playing field”, as mentioned above, for the purpose of selecting an investment with the highest yield.. However you could get a HPY calculation as an exam question, so here it is simply stated as:

      HPY   =   What you Get   /   What you Pay

For an investment sold on a Discount basis:

      HPY   =   Par Value   -   Purchase Price   /   Purchase Price

For an investment sold on an Interest Bearing basis (i.e. MMY  basis):

       HPY   =   Interest Earned   /   Par Value

                 Where:  Interest Earned   =   Cash Received at Maturity   -   Par Value

-          George Schilling, CTP

But first I’d like to review the following points that I think can help clarify how the technique can be used to answer option pricing exam questions:

1) When Call or Put options are Out-of-the-Money they are not exercised which means that the underlying asset (e.g. raw materials) is bought or sold in the spot market. Therefore the value of the option only reflects the cost of the premium.

2) When Call or Put options are In-the-Money they are exercised at the strike price. The value of the option reflects the net of the strike price , the market price and the premium cost.

3) When Call or Put options are At-the-Money the strike price and the market price are the same so the value of the option only reflects the cost of the premium.

Here’s the “Option Pricing Lines”:

                                                        Call Option Pricing Line 

                     Out-of-the Money                                                   In-the-Money 

    (-$)___________________________ Strike Price_____________________________(+$)

                                                         Put Option Pricing Line 

                      In-the-Money                                                        Out-of-the-Money 

     (-$)__________________________ Strike Price _____________________________(+$)

Now, keeping the points outlined above in mind, here’s some examples using the Option   Pricing Lines:

1) XYZ has a raw material call option with a strike price of $50/unit and the premium paid for the option is $1. If the market price is $54/unit on the maturity date, what is the value of the option contract?

                                                        Call Option Pricing Line 

     (-$)_______________________________$50____________$54__________________(+$)

                Profit   =    $54 - $50 - $1   =    $3  In-the –Money  

                Rational: Exercising the option rather than buying the raw materials in the spot market results in a value increase of $4 which is offset by the premium cost.

2) Assume that at maturity the market price is $48/unit. What is the value of option contract?

                                                          Call Option Pricing Line

      (-$)_____________$48_______________$50__________________________________(+$)

                 Loss   =   -$1  Out-of the-Money 

              Rational: The option is not exercisedand the raw materials are bought on the spot market at the lower price of $48/unit.

3) ABC has a raw material put option with a strike price of $50/unit and the premium paid for the option is $1. If the market price is $46/unit on the maturity date, what is the value of the option contract?

                                                            Put Option Pricing Line 

       (-$)_____________$46_______________$50__________________________________(+$)

                  Profit   =   $50 - $46 - $1  =  $3  In-the-Money 

4) Assume that at maturity the market price is $53/unit. What is the value of the option contract?

                                                              Put Option Pricing Line 

            (-$)______________________________$50_______________$53______________(+$)

                 Loss   =   -$1  Out-of-the-Money  

              Rational: The option is not exercised and the raw materials are sold on the spot market at the higher price of $53/unit.

You can practice using the ”Option Pricing Line” tool by using it to verify the Call and Put option pricing relationships detailed in Exhibits 9.2A and 9.2B in the BOK (see references below).

Finally, if you get an option pricing question on the exam, you might want to draw the  appropriate “Option Pricing Line” on your white board as an aid to determine the correct answer.

References: AFPLearning System, Treasury, Module Four, Chapter 9, Pgs. 4-57 to 4-58 

                     ETM 3^rd ED., Chapter 9, Pgs. 305 to 306   

- George Schilling, CTP

This is understandable given the complexity of the equations and therefore the difficulty of committing them to your memory. And while a guessing strategy gives you a 25% chance of getting the correct answer, I think that this two-step procedure is easier to learn and therefore using it might increase you chances of answering this type of calculation question correctly. But before I outline how the two-step procedure works, I’d like to briefly review the concept of Accounts Receivable Carrying Cost.

Carrying Cost is the cost to your company of not having the use of the cash, for a period of time, that your customers owe you for their purchases of your products or services. This time period (i.e. the Collection Period) is the number of days between invoice issuance and receipt of payment. And it is primarily a function of the credit terms you’ve granted to your customers to induce them to purchase from your company rather than from your competition .Typically, Carrying Cost is determined by using the company’s Weighted Average Cost of Capital (WACC) and is calculated as follows:

(Invoice Amount x WACC x Collection Period) / 365

Now let’s move ahead with the two-step procedure to calculate the Present Values (PVs) and the Net Present Value (NPV) of a sellers proposal to offer early payment terms of 2/10 Net30 to their customers. I’m using the same example that is presented in the BOK so that you can compare the results of this procedure with those of the BOK equations.

The general form of the two-step procedure is as follows:

And by applying it to the BOK example you can calculate the PVs for payment by the customer on day 10 and day 30 as follows:

PV (Customer takes discount, pays on day 10)
 

PV (Customer does not take discount, pays on day 30)  

When you compare this NPV with the BOK NPV you see that they are very close and are the same when rounded to the nearest hundred.

Given this, you might want to consider studying this two-step procedure because by doing so you will be preparing yourself to answer a Sellers Discount calculation question correctly rather than just guessing at its answer.

So, if you find yourself confronted with this type of question on the exam, rather than thinking “let’s guess on this question” you can say, with some degree of confidence because you’re armed with this two-step procedure “let’s dance”!!!

- George Schilling, CTP

References:  

AFPLearning System: Treasury, Module Three, Chapter 7, Pgs. 3-75 to 3-77 

Essentials of Treasury Management, 3^rd ED., Chapter 7, Pgs. 241 to 242 

After working my way through all 17 chapters, I've amassed an impressive collection of flashcards:


 
 

New study plan
I spent my first week of review working through my flash cards, but this was somewhat aimless, especially because I have so many. I decided to form a new study plan to get more effective use out of my remaining four weeks. I listed everything I intend to review between now and the exam, so I have a clear plan of what I need to accomplish. This includes:
•    reviewing each textbook chapter (3 to 4 per week)
•    writing a final review test each weekend
•    preparing calculation sheets that include all the calculations from the text
•    working through the module calculation questions
•    continuing reviewing flash cards, and start removing those I know well

Writing the AFP online post-test
I wrote the post-test with mixed results. I improved in all sections except module 6, where I actually dropped 25%! I’m still having difficulty with the way the questions are phrased, especially the use of grammatical double negatives. I also need to make a concentrated effort to read each question in full, because some of my mistakes came from missing key words, not misunderstanding the concepts.
In the AFP Learning System, the post-test results are only listed by module; it would be much more helpful if they were listed by chapter so I could direct my review more efficiently. However, I did find that the in the online record of reports/best test scores, I can see all the questions I answered incorrectly for each test, which means I can review these specifically.
The final review tests are made up of questions from the module tests, so my score on the first one was much higher than the post-test from the previous week. It was a good confidence boost – but I’m not sure how useful it will be if I’m reviewing the same questions every week. I am not timing myself yet; instead, I’m focussing on ensuring that I understand all the questions I answer incorrectly. I guess I will have to start pay attention to timing as well.

Beginning the study process

What I expect
I expect the CTP material to give me a broader understanding of the role of treasury in business. As most of my experience is with one company, I hope the CTP will fill in the areas I have not yet experienced, giving me the technical skills to fully develop my treasury abilities. I expect the CTP to be very universally applicable, especially because I know will be applying the knowledge in professional roles in Australia and Canada at least, but perhaps not in the US. Finally, I expect the actual exam to be somewhat formula/calculation driven, and less focused on the memorization of facts and details.

I’m actually looking forward to studying again because I finished my formal studying five years ago.

Getting started
I chose the AFP Learning System:  Treasury as my study material and ordered it using my Australian shipping address and my Canadian billing address. I was surprised to hear a few weeks later that the books had been delivered to my parents in Canada! There was apparently a mix-up with the addresses, so I contacted the CTP, and they had a set of books on my desk in Australia the next week. High marks to the CTP account reps for quickly remedying the problem! That was when I realised I only had 18 weeks before my chosen exam date.

Forming a study plan
It’s been seven years since the last major exam I wrote. Since then, my life has changed somewhat. One of the biggest changes has been my marriage, which has its pros and cons when it comes to studying. It means more commitment and responsibility, especially in terms of housework. My wife also studies full time and works part time, which can cause stress. However, she’s offered to help ensure I have sufficient time for studying, and when her own schedule permits, has suggested she could help me review.

I was optimistic after my first glance through the study material; I felt confident in my study abilities and my general familiarity with treasury. Realising there were 17 chapters, I considered the pace of one chapter per week, but realised this would leave me insufficient time for review. Instead, I planned to review roughly three chapters every two weeks; this would take me through all 17 chapters in 12 weeks, leaving just over a month for review.

The first thing I did was complete the Learning System online pre-test score: 44%, ouch. However, I felt as though I knew more than this score indicates, because each question I got wrong, I had narrowed down to two options, one of which was always the right one. This also gave me confidence that I would connect with and learn the material quickly. Now for the hard part, actually starting!

 

I passed!!

So the good news is that I passed the exam!  I’m not sure by what percentage because if you pass you just get a piece of paper that says “Congratulations!”  If you do not pass, you get a sheet that says what questions you got wrong and how far you were from passing.  Unfortunately I was extremely sick on the day of the exam with flu symptoms and I was afraid that being tired might interfere with the exam, but the good news is that it didn’t.  If you’re sick during the exam don’t bother bringing any cough drops or tissues as they make you keep everything in a locker and you’re not allowed to bring anything in the testing room.  They do provide you with earplugs and their tissues.  As I went through the exam questions I realized how helpful the practice questions on the AFP Learning System were.   There were a handful of questions that were very similar to the questions on the system.  [editor's note:  This was just a coincidence.  The exam and the Learning System are developed by two separate teams of subject matter experts that have no access to what the other team is doing.] Seeing familiar questions on an exam is always nice as it gives you a boost of confidence boost.  I was also surprised that I used up the entire 3.5 hour time limit for the test.  I was anticipating finishing ahead of time and having at least a half hour to review my answers.  I would say taking all 170 questions in a row with no break was the most difficult part of the exam for me because although I took all the practice exams, I would take breaks to read the explanations when I got questions wrong and did not answer all the questions in a row.

The online format of the test is extremely helpful from a strategic and timing perspective.  The remaining time is in the top right corner of the screen and you can skip and “flag” or mark questions that you want to go back and review later.  I would recommend highly utilizing this functionality as this prevents you from spending too much time on certain question.  When I saw multiple step long calculation questions I just skipped them and went back to them after I had finished going through all of the questions.  There were a few questions I couldn’t figure out at the end and I just had to guess. 

My overall impressions of the exam was that it requires a large amount of studying, there is just so much material that you have to cover.  No matter how much you think you’ve studied there will always be some questions that you get wrong as well because some questions are more high level and applications of concepts.  This is not an exam that you can just show up and take; you have to put in time and gauge your progress via the practice questions.  I would definitely recommend heavily utilizing the online Learning System.  It was definitely the best resource from my perspective and although I passed I wish I had started using it earlier in my studies.  Gooooooood luck!

My exam date is tomorrow at noon.  I’m not a morning person so it was important for me to have time to sleep in a bit, study and have a good meal before the test.  I saved the post-test on the Learning System for one last final review on the last day of studying (or so I thought).  The first issue that came up was that I was unable to log into the Learning System.  I changed my password a few times and was dumbfounded when I was unable to access my account.  I dug through some emails and realized that I had activated the Learning System a few days over exactly 1 year ago.   Please keep this in mind if you are taking the exam for the second time or if you had to defer your exam as I had to!  Your Learning System login is only valid for exactly 1 year.  Luckily one of my friends was able to let me use their as they had already taken the exam during the testing window. [editor's note:  Access to the online portion of the AFP Learning System: Treasury lasts for one year from the date you first logged in.  However, in most cases, if your access expires during the testing window in which you are enrolled, it can be extended until the end of the window by contacting the Learning System customer service team at customerservice@holmescorp.com]

The second issue that occurred was that the practice test was extremely difficult and I scored 57%.  This was very disheartening considering it was the day before my exam test date.  At this point I had read and taken notes of all the chapter books, taken the pre-test, taken the practice exam from the CTP Exam Prep Guide, taken all the practice tests for the modules and made notes on the questions I got incorrect, reviewed all the flash cards and formulas on the learning system and read through my notes.  I also created a formula sheet that I’ve been constantly referencing whenever I have a free moment.  Some of the more complicated formulas are difficult to understand as they build off of each other.  An example of this is the calculation for the annual interest rate for commercial paper.  In this calculation you start by calculating the interest + fees and then annualizing over the purchase price.  A second example of this is the cost of a line of credit based on the used and uncommitted portions.  These calculations can really only be memorized by doing an example rather than by looking at a bunch of formulas.

With the last few hours tonight and tomorrow morning I’m planning on reviewing my typed notes – looking for key definitions, lists, terms, laws, agencies, etc to refresh my memory.  In addition, I plan on going through about 10 final review questions from the Learning System in the morning prior to leaving for the exam just to get myself into the test tasking mode.  Wish me luck!

My module scores were in the range of 70-85% which is much better than I did on the pre-test.  At this point in my studies it’s all about reviewing facts (laws, definitions, and formulas and being able to apply these facts.  It would be impossible to memorize all of the facts in the books, but by taking the practice exam you realize what is important and what areas you need to focus on.  Another valuable resource to me was the CTP Exam Prep Guide, particularly page 3 of the document which lists out the number of questions on the exam per chapter.  This really allows you to realize what chapters you should focus on.  Chapter 10 – Payment Systems, Collections and Disbursements has the most, with 16-18 questions with Chapter 8 – Cash Management and Forecasting (14-16 questions), Chapter 11 – Money Markets, Short Term Investing and Borrowing (12-14 questions) and Chapter 3 – Managing Relationships with Service Providers (11-13 questions) following after with the most questions.  I decided to review my typed/printed notes again and began with the chapters with the most questions and working down from there.  In this way studying becomes strategic and my time is most utilized. 

At this point in my studies I am just reviewing general concepts and memorizing definitions and formulas.  I have also found the AFP Learning System: Treasury extremely useful.  I took the Pre-Test for the second time and my score has increased, but not significantly from when I took the exam about a year ago before I opened a booked to study.  When I took the pre-test a year ago my score was 48% and after I read through all the materials my score jumped to 64%.  Although I do not find this score acceptable at this point.  I realize that I need to put a large amount of effort during the last couple of weeks to bump up that score.  By the time I take the post test I’d like my score to be at least 85%.  

After the pre-test I started to review the notes and formulas.  Reading through the notes takes a large amount of time as well as there is over >200 pages of typed material.  I highlight and note definitions/concepts that I do not know and need to be reviewed again.  I find the notes very helpful as the main points are listed out and the various government groups and agencies are listed out accordingly.  The formulas list is also very helpful as it is just a single piece of paper and I can take it everywhere with me.  I just pull it out of my purse when I’m on the bus or waiting around and can get a few extra minutes of study time in.  At this point I have reviewed the typed notes and formulas for the first 3 modules.

I then decided to go review using the individual module sections of the AFP Learning System.  I took the Module 1, 2 and 3 tests.  I did better on the individual module tests than I did on the overall.  My scores were the following:  Module 1 - 81%, Module 2 – 79%, and Module 3 – 81%.  On the first three Modules I scored much better than I did on the overall test.  I will now review the remaining module chapter notes and formulas and then this will help me focus on certain chapters that I am having trouble with specifically.   I have decided to skip the calculation section of the AFP Learning System for now and return to it at a later point after taking all of the module tests and reading through all of my notes.

This week I am going to focus on utilizing the AFP Learning System as I find it easier for me to focus with more interactive study tools than just reading books or reviewing notes.  Week two will be focused on reviewing the presentations from my study group and the questions at the end of the chapters.  The third week will focus primarily on chapter questions and practicing calculations. 

In addition, I will also have to review the exam format – how the questions are scored (leaving answers blank versus guessing), calculator usage, etc.  I often find that just knowing the format of the exam can actually be the difference of a few points. In addition to studying for the CTP, I also am studying to take the GMATS shortly after.  The two tests are completely different in both material and testing taking format.  The GMAT exam is adaptive and every question must be answered immediately (skipped answer is graded as wrong) as you cannot go back to review/change answers.  The GMAT questions, being adaptive, get progressively easier or harder depending on how well you’re doing.  The CTP on the other hand is a set number of questions and a set timeframe.  Questions can be returned to and reviewed for accuracy if time permits.  I believe the most important study habit of the CTP is just understanding and applying the material and understanding calculations. 

Currently I have outlined and read through the material in the first 5 Modules.  Since my previous entry which reviewed the dense material of Chapter 10: Payment Systems, Collections and Disbursements, I have outlined and read though chapters 11, 12, and 14.  (I outlined and review Chapter 13: Financial Decisions and Management for my study group chapter presentation prior).  Chapter 11: Money Markets, Short Term Investing and Borrowing begins by reviewing money markets (participants, types of instruments, etc) on a global scale and then focuses specifically on U.S. money markets.  The text then describes how to set up an investment policy and whether to outsource and manage the investments in house.  The text then describes pricing and yields on the MMF instruments.  Chapter 12:  Capital Markets describes investments in debt and equity for an investment portfolio to layer onto the money market fund investments in Chapter 11.  Chapter 14: Capital Structure and Dividend Policy flowed nicely from Chapter 12 as it described how a company decides how it will split its allocation of debt and equity for a “target” capital structure.  It later details the factors behind the dividend decision and policy.

Throughout my studies I have found that naturally the areas that I can apply to my larger department are easier to absorb and understand.  Most of the concepts except for cash forecasting do not relate directly to what I do on a day to day basis, but certain concepts like issuing commercial paper, long term debt, issuing equity, MMF investments, fixed income portfolio, FX hedging and management are specific of my greater Treasury department.  The text has expanded my knowledge and understanding in these areas.

With only 28 days left until my exam date I feel as though I am a bit behind.  The tasks I still need to complete prior to the exam include reading and outlining the last module consisting of the final 3 chapters (chapter 15-17).  I also need to review and practice exam taking with the online AFP Learning System and review notes and exam practice questions provided by my study group.  I also should utilize the typed notes and formulas that I have spent so much time creating as well as memorize and practice the various calculations and related formulas.  I worry that I spent too much time outlining and reading through the material than practicing exam questions and memorizing. Due to the fast approaching exam I have decided to set myself on a schedule when I cover the areas described above.  I hope the time I have spent really deep diving into the book will better prepare me for the practice questions and calculations.

After skipping ahead to Chapter 13 for my study group presentation, I then returned to my sequential studying by chapter.  At this point I believe I encountered my hardest chapter yet, Chapter 10, Payment Systems, Collections and Disbursements.  This chapter is extremely dense with definitions and will require patience.  From my memory recollection I believe it is also the longest chapter as well – the page count seems to be double, triple, and quadruple some of the other chapters.  I had to read through this chapter in quite a few sittings rather than being able to read through a chapter in a few hours.

There are no formulas in Chapter 10 for those individuals who are not math savvy.  I, on the other hand, majored in mathematics and therefore prefer formulas to memorizing definitions and concepts.   The chapters in general have a distribution of both concepts and chapters, but Chapter 10 is heavy on content.  If a person work at a large company where collections and disbursements are often outsourced or completely separate from the Treasury department many of these detailed concepts will be new to you.  At the same time though, if you work in the core Cash Management function at a company many of the concepts such as SWIFT, IBAN, different types of payments and settlement systems will just be review to you.

The chapter begins with payment systems; different types of payments, concepts that are simple for all to understand – cash payments, paper payments (checks), cards, and electronic payments.  Electronic payments are the most effective, but also the most complicated due to the various clearing and settlement systems.  The chapter then discusses global and country specific banking practices and the appendix further discusses banking and payment systems for selected countries. The focus then turns to the U.S. payments specifically.  The text goes into the different types of U.S. electronic fund transfers – ACH, Fedwire and CHIPS specifically.

The shift is then to collections and disbursements in the U.S. specifically.  From a collection standpoint the concept of float and lockboxes are discussed.  From a disbursement standpoint ZBA accounts, controls such as positive pay and electronic disbursements such as direct deposit are discussed. The chapter closes with a discussion of potentially outsourcing the accounts payable function and how to reconcile and manage the disbursement data.

Although I have been previously studying in sequential order and am only currently on Chapter 8, it was my turn to present to my study group and therefore I had to skip ahead to Chapter 13 – Financial Decisions and Management and focus on the details of that specific chapter.  My study group coordinator sent over the presentation from the previous study group to myself and my co-presenter.  The format of the presentation can be in either of the following formats: 1) power point presentation outline 2) end of chapter questions.  The previous presenters went over the end of chapter questions for Chapter 13 and we decided to use the same format.  I read through the Chapter outlining and noting the formulas in my Excel sheet.  Also, when I encountered one of the presentation answers in the book I would cross check it with the presentation and make additions where needed. 

After sending over the final updated presentation, our group coordinator noted that it might be more useful to paraphrase the answers to the questions rather than just re-reading them.  I decided to go back through my answers and adding talking note boxes to the presentation noting key points and concepts (rather than full, long sentences) and also added in real life examples.  Chapter 13 reviews the concept of short term versus long term debt.  In this case, a treasury professional would want to monitor the interest rate cycles and the yield curve to identify opportune times for issuing debt.  As an example, I mentioned that Google issued $3B in long term date in Q2 2011 due to the low interest rate environment.   

In addition, I had to understand all the concepts of Chapter 13 in the instance that there were any questions during the presentation.  I also made sure that the review multiple choice questions that we review for the second half of the sessions were also correct.  Some concepts in the multiple choice questions did not have extensive explanations in the text OR the explanation was too complex and so I decided to research on my own.  A website that I’ve found extremely useful is investopedia.com.  It gives you a breakdown of all the formulas/equations as well as definitions of topics covered in the text.  Particularly for Chapter 13, I wanted to l earn more about the “Beta” used in the Capital Asset Pricing Model (CAPM) and I was able to find this short 2 minute video which breakdown the concept of beta and stocks of companies http://www.investopedia.com/video/play/understanding-beta#axzz1fDJccwzq.  I wanted to share this website/videos with future exam takers as it is extremely used and I will be using it for the rest of my study time.

In addition to outlining all of the chapters in Word, I’ve also created an Excel document that lists out all of the formulas that appear in the text.  The Excel document also includes columns containing the page number and chapter where the formula is found in the instance that I need to reference the formula or an example problem.  The Excel document also contains the definition of undefined variables and additional notes pertaining to the context of the formula.  I hope that the Word outlined notes and the Excel document will serve as references for quick review during the latter stages of my studying progress after I’ve read through all of the chapters.  Specifically, the Excel document will serve as a formula reference guide which I hope to use either directly to memorize formulas or can be turned into flashcards.  The Word document can also be used later to create flashcards for definitions of any unknown content.  In addition, the process of taking notes allows me to really focus on the material and the concepts, as I am reading for main points and trying to understand and translate the topics.

So far, I have been able to read and take notes through all the first three Modules, Chapter 1-7, using the above study techniques.  This is also the same point where I had to stop studying and deferred my exam for the June/July session.  Therefore, this is actually my second time completely reading through all of the material in Chapter 1-7.  So far, I’ve noticed that Chapter 2 – Financial Regulatory Environment and Chapter 5 – Financial Planning and Analysis will require some extra review and memorization. 

Chapter 5 will require a large amount of formula memorization as it covers future value, present value, various financial ratios, Return on Investment, Free Cash Flow, and Economic Value Added, just to name a few.  All these formulas and their applications will have to be studied extensively as there will be no formula guide during the exam. 

Chapter 2 does not contain a large amount of formulas, but since it covers the regulatory environment, it contains information on the various regulatory boards, agencies and departments, as well as legislation relating to the regulation of financial institutions, payment systems, financial crimes, consumer protection, bankruptcy and others.  Chapter 6 – Introduction to Working Capital Management also covers U.S. legislation around credit and collections.  Differentiating between various legislation and agencies/departments will require in depth studying as well.  

As I mentioned briefly in my firstblog post, I initially began studying for the June/July 2011 exam period andhad to defer taking the exam due to serious illness in my family.  The study technique that I followed the firsttime around was just to first make a pass by reading through all of thematerial and then use the AFP Learning System: Treasury for review.  Before opening any of the books though I tookthe “Pre-test” on the AFP Learning System Treasury to gauge my base knowledge and also previewthe exam format.  From that point, Iwould read one chapter at a time, highlighting, taking notes directly on thepages, and using post it flags to mark relevant tables/graphs/figures for myreference later.  After successfullyreading each chapter, I would then answer the book chapter reviewquestions.  I would first try to answerthe questions on my own and then I would review all of the answers from theanswer key.  At the point where I had todefer my exam, I had completed the study technique described for the first 3modules (that is, chapters 1-7). 

At that point I stopped studying and then pickedit back up in late September.  Afterdiscussions with my coworker who took the exam in January, I decided to try adifferent study technique.  This timearound I am still reading through all of the chapters and decided to start fromthe beginning again on Chapter 1, but the difference is that I amoutlining/taking notes in Microsoft Word. I make sure to outline important topics, but even more importantly I notetopics that are foreign to me and that will need to be reviewed moredeeply.  I find that in general withtaking notes that I focus more on the text and the content when trying to pullout main points and unknown topics.  Inaddition, I also make sure to include the pages for helpful charts/tables soI’ll know exactly where to look if I need to reference them.  The goal is to just use the notes for review,rather than having to carry around the bulky books.

I heard about the SFMTA study group for this testing session via an email I received and I decided to join the study group for various reasons.  Mostly I was hoping it would keep me focused and help me track my studying.  The study group is on Tuesdays and runs for an hour and a half approximately.  The breakdown of the study group is 1) presentation on a certain chapter by group participants and 2) review questions on each chapter.  The course does not cover all the chapters in the book, but just focuses on the chapters with the largest number of questions [editor's not:  see page 3 of the CTP Exam Prep Guide] according to historical past tests.  I’ve been reviewing the chapters in sequential order and therefore I am behind on the chapters that we go over during the study group, but I still listen in on the sessions as they give a great overview and when I get to a chapter on my own that we’ve gone over during the study group, I use the materials from the study group for review and reference notes.  I wonder if it would’ve been more beneficial to pace myself with the study group and review the other chapters on my own.  This will be something I will definitely think about if I have to take the exam a second time.

 Usually two group participants work together to create an overview of the particular chapter they are assigned.  They then present the main point of the chapter via phone conference and the presentation is posted to a yahoo site so that all the members can follow along during the presentation.  As many of the CTP chapters cover a large amount of material the presentations can often be over 40 pages of PowerPoint.  The presentations from the previous study groups are used as the basis of the current study groups presentations.  That is, only edits or additional slides have to be added, but the main presentation is already created for most chapters.

Part I of each session consists of going over chapter questions.  These questions have been gathered and prepared by the study session hosts, Janet and Mark.  They have gathered these questions from various sources over the years.  The questions are not always necessarily in the CTP exam format, but are meant to test key concepts of the chapter.  The questions are posted prior to the study group and we do our best to answer them individually.  During the study session we then go through each question and discuss the answers.  What is also extremely beneficial is that the answers are also posted to the yahoo site so even if you were unable to answer a question or if you were confused about an answer you can reference the answer key at a later date. 

My current study group began its weekly study sessions in mid September and meets almost weekly (some weeks are skipped due to holidays, etc) and will end during the first week of December.*  This is a good timeline as you will need to cover the additional chapters on your own not covered during the study sessions and also review the material that you’ve studied. 

The other benefit of the study session is being able to get feedback from others who are also studying on 1) study techniques 2) areas of difficulty that they are encountering and also 3) feedback from others who have been unsuccessful when taking the exam previously.

*editor's note: This candidate tested during the Dec 2011/ Jan 2010 testing window.  These blogs were submitted as she prepared for the exam.] 

There is just a little over 12 hours before exam time.  I’m nervous, but I think I have come to the realization that I know what I know and I just need to spend the rest of the time relaxing and clearing my head.  If I fail I know I can take the exam again, but it is on my performance review for this year, and I really don’t want to look like a failure to my co workers, family, and friends.  Everyone I talk to tells me they know I will pass, which I know they say because it’s the right thing to say.  You don’t exactly go around telling people that you know they will fail at something.  I just feel like so much faith is being placed in my and I don’t want to look stupid.

I spent about four hours at the library today practicing the calculations. I spent about 40 minutes reviewing the chapter summaries at the end of the book.  I’m wondering how many exam candidates actually know every single formula covered in the book going into the exam.  I’m still having a heck of a time understanding the calculations in chapter 11. Bonds have never been easy to understand for me.  It’s like I have a mental block against all information having to do with them.  I am very comfortable with the earnings credit, required balance, and many of the financial ratios.  The bonds and WACC calculations are a pain! 

While studying the calculations I reverted back to grade school.  When I found myself struggling with one I actually wrote it at least three times then practiced solving it with numbers.  This actually seemed to help me to remember them.  I did not practice solving the calculations for one of the variables being missing.  My manager at work told me that when she took the exam you had to know how to solve for each variable. [editor's note:  This is true.  When you are applying these formulas in real life, you're going to have different pieces of information at times, so you'll need to know how to approach the formula from different angles. If the formula is x + y = z, you should be able to solve for x & y, as well as z.]

I haven’t followed through on any of the other plans I had put in place but my plan for this evening is to relax, maybe review the formulas one more time before going to bed and getting a good nights sleep.  Tomorrow morning I’m going to wake up early enough to have a nice breakfast consisting of Kashi Oatmeal, and a cup of coffee while reviewing exam information one last time.  Just about a year of preparation is going to come to an end in a few short hours and I’m ready to face the outcome no matter what it is.

As I have said repeatedly, I did not plan on studying the day before the exam.  However, I will be at the library for another four hours tomorrow.  I have five calculation practice sheets per chapter.  My plan is to get through each sheet, and have a good handle on the calculations by the time the library closes.  Hopefully, there will be time to review the chapter summaries provided at the end of the book.  I’m struggling most with the calculations for chapter 11.  There are 20 different formulas to know from this chapter. 

My first piece of advice to anyone reading this would be to start earlier than I have on gaining an understanding of the calculations.  I’ve known about the exam for almost a year now and at this point I feel there is no reason that I shouldn’t have been looking at the calculations before now. 

I have really enjoyed my time at the library.  I have a really hard time focusing at home.  Even when no one is in the house but me my mine wanders and I start thinking about all the other stuff I could be doing.  The library is so quiet and I feel like I’m able to stay focused for hours.  When I find myself losing focus I just get up and take a little walk and get right back to my studies.   I really wish I would have thought of this sooner!        

Yesterday, I practiced on the sample exam questions in the CTP exam preparation guide.  I answered 70 questions and only got half of them correct which is terrifying.  I am hoping that I did so poorly just from lack of focus with being sick and that I am really not that clueless! 

I am still having trouble with the same areas I wrote about in my last entry.  I had a terrible time with a sample question that was asking about currency exchanges.  I am comfortable doing the calculation for converting an amount of foreign currency into dollars.  However, there was a sample question regarding the interest rate of a currency being higher than the rate of another currency and you are supposed to answer whether it is trading at a premium or discount in the futures market. This is such a foreign concept to me that I just can’t grasp it.  Unfortunately, this material makes up somewhere between 8 and 13 questions* on the exam so I’m going to focus a large part of time this evening reading this over again in the book. 

If all goes according to plan I will focus on studying this for about six hours between now (Monday) and Thursday.  I have taken Friday off work to study.  I will spend a good part of Saturday studying.  Sunday, I am hoping to study a little, but spend a majority of the day relaxing with my family.  The exam is Monday and I hope to go into it with a clear head.  This was one piece of advice that I read in the study tips provided in the CTP preparation guide that I really hope to stick to.  The advice was to spend the day before the exam day trying to relax and clear your head instead of trying to spend your final hours cramming information into your brain. 

*editor's note:  For more information on the number of questions on the exam per chapter of the ETM, see page 3 of the CTP Preparation Guide.

 Last week I spent about an hour each evening reading the book.  Friday, I wasn’t able to study at work due to a last minute project that needed to be completed by the end of the day.  Saturday and Sunday I studied for about four hours in total.  On one side I don’t feel like this was nearly enough studying but on the other hand I think that an hour a day is just enough to ensure I am retaining what I am studying and avoiding getting burned out on the material.

Over the last week I have really struggled with understanding the material in the book.  I find chapters 8-10 extremely difficult.  Of course, these chapters represent a large number of questions on the exam!   I understand the basic definition of puts, calls, options, and forwards.  However, when it comes to answering questions about the details involved with each of those I get confused.  When reading this material I feel like my brain just shuts down and I comprehend nothing.  As of right now I don’t have an answer as to how to conquer this.  I think the reason I find this so difficult to understand is that I don’t have any job experience in this area.  I started working in treasury as our company was taken private so we don’t do anything with stocks anymore.  I wasn’t in the department when our bonds were issued and I don’t know the details on the covenants for our debts.  All of this material is very foreign to me.  I have a very limited amount of time now to gain an understanding of this material which just adds to the stress.

A new semester starts at school tomorrow and I’m very concerned about how much time I will have to study.  I’m just under two weeks away from test day and getting very nervous.   

My goal is to have the entire book complete by January 8^th.  With the book read I will have two weeks to work solely on calculations and formulas.  I start back to school on January 9^th so having the book compete by then is a must. 

Currently, my struggles and concerns are mainly the calculations.  I’ve seen just about all of the calculations in the book before in school but there are just so many!  Chapter 5 was loaded with calculation after calculation.  I’ve read that they are easier to remember if you know what they do but that really isn’t working for me.  I’ve also read that you can do a brain dump and write all the formulas in your head on the white board as soon as the exam starts.  My problem is how do you get any of them to stick in your head?

Hopefully over the next I get a good handle on the formulas. 

My biggest struggle right now is that I feel like I am pulled in so many different directions.  I feel like I am expected to give everyone in my life 100 percent of my time leaving no time to do what I need to do.  Adding to the stress is the holidays.  Just when I think I have everything done and I can finally focus on the CTP exam I’m asked to do something else.  If I’m not able to do exactly what I’m asked to do then I get an attitude from the family member that asked.  No one seems to understand that my life is very busy and I don’t have time to get together for dinner at a moments noticed just because they have the time.

As those of you who work in retail know, December and January are very busy.  We are getting ready to close the year in January and all the preparation begins in December.   Luckily, I have still made the time on Friday afternoon to study. 

Three weeks have gone by since I said I was going to start studying 3 hours a week and I’ve only gotten in an hour per week.  I hope that those of you who read my blog are seeing the importance of putting yourself on a schedule and sticking to it.  My school semester starts again the third week of January and I need to have a good handle on the CTP material by that time. 

I planned on spending a good amount of time this weekend and my daughter decided to refuse her nap so I didn’t get the time to study.   Next weekend is Christmas and we have plans every night.  I would love to get advise from someone as to how to balance family, work, and studying the enormous body of knowledge such as the CTP exam book. 

I’ve stayed committed to my studying time at work on Friday afternoons for the past two weeks.  I’ve read the chapter and highlighted the answers to the questions at the end.  When I’ve come to a difficult to understand concept I took a note of it so I can go back at a later time and review it so I can get a better understanding of this material.

Unfortunately, I intended on getting a lot of reading done this weekend but I spent a lot of time preparing for Christmas.  Now that I’m mostly caught up on my holiday to do list studying should be much easier.  I’m going to come up with a schedule that I will have to hold myself to for studying so that I don’t feel so overwhelmed. 

Over the next few weeks my biggest obstacle to overcome is going to be myself.  I know that I have issues with procrastination.  I need to hold myself accountable from here on out and make sure that I set accomplishable goals to keep myself on track.  I start back to school one week before the exam so I would like to have the good understanding of the material. 

My biggest take away so far in the preparation for this exam is the importance of taking a very large amount of information and splitting it into smaller more manageable pieces.  I even applied this idea to my classes this past semester and it makes the subject so much easier to understand.   Studying for the exam will be go very smoothly if I can stay focused on taking each chapter and breaking it into smaller pieces that will be easier to understand and review.

This is a very stressful time in the year when I am trying to prepare for final exams at school, get all my final projects complete, and prepare for the holidays*.  I make sure that I have at least an hour every evening to sit down and play with my daughter.  I’m feeling very overwhelmed and question myself as to if I have taken on too much.  I have two weeks until the end of the semester.  If I can just get through finals I will have a good month and a half to step up my studying for the CTP exam. 

The hardest obstacle I’ve had to overcome over the past couple of weeks has been work/life balance.   My daughter wants me to focus my attention on her while I am trying to concentrate on school work.  She will crawl up on the couch and sit on my book or if I’m sitting at the dining room table she wants to sit in the chair with me.  How am I supposed to look at her and say no?  I leave her all day to go to work, two nights a week I leave her for school, and now when she wants me to hold her I say no?  I hope that by the time I have completed all of my blog entries I have answered these questions and can help another parent that feels the same guilt I do for missing time with their children.

For now I am keeping my eyes on the prize.  My education is very important and so is passing the CTP exam.  As I write this blog entry I am reflecting back and realizing that I need to be much more disciplined and utilize my time better.  My next step will be to come up with a studying schedule that I can stick to.

* editor's note:  This blog was written as the candidate prepared for the Dec 2011/ Jan 2012 testing window.  The entries were submitted as they were written and the candidate did not have the opportunity to edit them once they were submitted.

I began studying two weeks ago by first going to the AFP website and reading the blogs to get advice on how I should tackle this enormous body of knowledge.  I found some great advice by reading the blogs. 

Obviously, the formulas are going to be a very important element of the exam.  One blog entry suggested that you shouldn’t stress over the formulas themselves.  Instead clear your mind and think about why the formulas are used and what they are used for.  I actually applied this approach to a midterm exam in one of my classes and I found it so much easier to remember the formula this way.    

Another blog entry suggested going through the table of contents in the book and picking the areas that you think will be the most difficult and concentrating on learning those subjects first.  This process will help to take the huge amount of information and break it down into smaller more manageable parts that will hopefully be easier to handle. 

One thing that concerned me in the blogs was that former candidates suggested that you should dedicate 3-4 hours a week to studying for 12 weeks.  I don’t have that amount of time to dedicate to studying right now.  My plan is to spend 1-2 hours a week until the first week of December.  Once I am finished with this semester of school I will increase my studying to 3-6 hours per week. 

My plan for now is to make a simple power point presentation for each chapter in the book and use the slides as flashcards.  I am going to use the focus questions at the end of the each chapter to develop the slides.  I hope that this will help me to take the information from the book and break it into smaller more manageable pieces.

It’s over- time to celebrate!

I left the testing facility elated. I did what I always do when I have news; I called my mother. After that, I had an appointment for my thesis project at a local non-profit social enterprise. I could not wait to get back to the office, the appointment seemed to last an eternity!

At the office, I was greeted with hugs and congratulations and quite a bit of hoopla, including an email to the team. It was really nice to have it behind me. In the afternoon, I received an award I was not expecting for my work performance in Q4, complete with name recognition on a national call and a sizeable monetary reward. I was on a roll; too bad they didn’t draw for the Powerball that day or I would have gotten a ticket!

In retrospect, I am glad that I took the test when I did, but that is only because it is over and I passed. I know I did not give myself enough time to study.  My cram style is not a good method for retention learning. I would recommend anyone wanting to take the test allow themselves a solid six months to study for the test and to actually take the time to study during the designated study times they set up for themselves. I had a tendency to let everything else take precedence. I also would not recommend taking the test when work is extremely busy or your personal life is really busy.

The tools that the AFP provides through their learning modules are tools that are well-developed and tested. The volume of information and the number of resources available through the AFP can ensure a successful test if a person makes sure to use them. The test is not forgiving if a person is not willing to put in the study time; I know plenty of people who have failed the test because they thought they could wing it. It is, however, rewarding if you take the time to go through the materials, utilize the tools at your disposal and practice.

The information I learned through the certification process is quite valuable. I can certainly see ways in which I will be able to apply my new knowledge to my job. I am going to be able to better understand the processes and concepts my customers go through as well as the regulations their jobs operate under. I will be a better banker because of the certification process. I just need to ensure I keep my credentials up to date now, I don’t intend to take that test again!

It is over. It was a hard test. It was beyond difficult. When I got to the testing facility, they scanned in my palm in and verified I was who I said I was, not some nut job trying to sneak into a three and a half hour test for fun. The testing facility provided me with a basic calculator and a dry-erase pad to write on. Then I had five minutes to accept the AFP’s terms of the test. After that, there was a tutorial on how to answer the test questions. Luckily, none of the test questions were like the practice questions in the respect that they did not state “choose all that apply” and require multiple answers. The tutorial also lets you know that you have the ability to “flag” questions that you want to come back and review; this is great since your answers won’t be final until the end and you have the entire 3 ½ hours to second guess an answer you input in the first five minutes. After the tutorial, the real fun began.

Within the first ten questions, I had six flagged to come back and review. I was not off to a champion start. The hardest part was the way the questions were worded. Oftentimes the answers were presented as: A. I, IV, V B. I, II, II C. II, III, IV or D. II, IV, V. Many of the times they all made sense to me, this made it extremely tricky.

I managed to answer all of the questions in a bit over 2 ½ hours. I quickly looked to see what I had flagged for review. Fifty-five. Fifty-five of 170 questions I did not feel even slightly confident in! I did the math. That was 32% of the total test. Okay, I thought. I have 50 more minutes to go back and go through them and make something happen. I quickly calculated my odds. If there are 4 possible answers, it is probable that by guessing I could get 13 of the 55 right. It could safely be assumed that I got some of the questions I was fairly confident in incorrect. I estimated I got 25% of the ones I was fairly confident in incorrect. That would mean I would have a total of 100 correct at the end of the test. Drats, I thought. That would be a 58%. Fifty-eight percent does not pass.

I went through and answered the rest of the questions I had flagged. I had fifteen minutes left on my timer when I was finished and I knew some of them I was never going to know the answer to. So I stared at the computer, hoping no one would make me get up and face the fact that I failed. Eventually, however, I had to leave and go to work to show my face. A lot of people fail the test; a hard test is a worthwhile test. Still, I was not pleased about being one of them and the people at work knowing I was one of them.

I left the testing room and the receptionist handed me my grade sheet upside down. It was all I could do not to let out a joyful scream when I read, “Congratulations.”

My cozy chair has a permanent outline on it where I have been sitting for the past four days. That outline is growing, too, as I don’t get up much and certainly haven’t found the time for a run. It is currently 9:30 p.m. Monday and I had the day off to study. I also had Friday off. I have sat in the same chair Friday, Saturday, Sunday and Monday. I’m fairly certain that my brain now has the same consistency as mashed potatoes.

I woke up this morning at 5:30 as my husband had a flight to catch and I could not get back to sleep. I opened my computer, intent to do the final review section of the learning program. I did not anticipate this taking me too long; I passed the post-test online last night on my third overall attempt and I have gone through all of the modules again. What I did not know when I went to do my final review, however, was that in that little “final review” section there are five three hour post tests that a person can review.  I suppose I should have checked that out earlier.

So, at 5:30 a.m., I sat down to do 15 hours of post-test reviews. I started with an anxiety attack. My fears were quickly assuaged when I realized that the questions on test one and two were much the same as the questions on the post test. Whew! But, of course, just when I was getting comfortable with it, tests three and four had all new questions for me. I did not do so great on those tests.

After test four, I took a break. I went to yoga and took a quick run, something I had been denying myself but I desperately needed for my sanity. Then, it was back in my sweats on my chair to study. I finished test five, not with the greatest of scores. It is late now, and I am going to quickly run through my flashcards one last time with the equations. My test is at 8 a.m. At this point, I just want it to be over.

I am working at home today (Wednesday) and was at home working yesterday. I know it sounds silly, but the extra time I can save from commuting ½ hour each way is helpful. The time spent getting ready in the morning - which my husband says is “an eternity”, I say it's 45 minutes – is also helpful to have back in my day. I am getting through module four and part of five. The calculations I mentioned before are taking me a lot longer than I thought they would.

I am back on my flashcard kick as well. One thing I have been doing so that I do not have to go back through all of the information to find the equations that are helpful is to purposefully enter the wrong answer into the calculations section I discovered yesterday. This is great because it does not give you the answer until you answer wrong twice, but it does give the equation, which I promptly write down on my flashcard. There are quite a few, which is a bummer because I have heard rumors that the actual test does not have too many equations. You just never know what ones are going to come back to bite you, though. A co-worker of mine who failed the test told me she was certain it was because she didn’t know her earnings credit calculation. I am not willing to take that risk; that was the first one I memorized!

Of the equations, I am having the toughest time remembering which yield matches to the date periods of 360 or 365. I cannot reiterate how lucky I am that I am going to school for finance because a lot of the equations are the same as I am learning in school. I am certainly stressing out about this test, though. I am actually looking forward to class tonight as it will provide a much-needed respite from the studying!

I am continuing to take the tests at the end of the chapters. I am hopeful I am not just memorizing the answers, however, as the numbers and questions don’t change. If I go through it three times, it is easy to think I just know the answer because I have seen the correct one before. Well, I am off to class. Six more days until this is over.

Well that didn’t go as planned. I took the post-test -the 170 question, 3 hour post-test on a Saturday morning. I got a 50%. That did not make me feel confident at all. I went into the post-test pretty sure there was no way I would get below a 70%. Overconfidence is not a good thing in this studying process, apparently! I spent the rest of the weekend working on homework and studying for the CTP, forgoing a ladies’ night out at the movies. It is officially crunch time with eight days to go before the test.

I am starting again at the beginning, so today I went back through modules 1 and 2. These modules are a bit like the first few chapters in a textbook you had in high school; easy as can be but the foundation of everything that is going to come down the line, so you better have a good understanding of what they mean.

I have to admit, there was one thing I did not do the first round of studying. I did not even click into the calculations section of the learning module. Silly, yes, but I was under the impression that this section would simply lay out what the calculations were. I was wrong - just like on 50% of the post-test questions! There are four different problems relating to the calculation, and they are quite useful. The repetition of doing the problems four times helps to cement the calculation in my head. There are quite a few of them, however, so I would recommend starting this endeavor much earlier than I am.

This week is going to be hectic and intense. I am planning on studying tomorrow because it is MLK Jr. Day and I will not be working. Tomorrow I am hoping to review modules 3 and 4.  I am also planning on taking the Friday of this week off and the Monday before my test. Tuesday I need to finish my MBA paper for the week, Wednesday I have class. Thursday I will get through module 5. Friday I am going to get through module 6 and review. Saturday, Sunday and Monday will be review days until I am comfortable. I need to ensure I do not get over confident again, though. I am not sure what I am going to do with my husband next weekend since I can’t sit him in front of the NFL any longer now that the Packers have lost, but I am sure he can fend for himself! “Only eight more days,” I am telling myself. So close. So so so close to being done!

New Year’s weekend I spent holed up reading through the remainder of module 4 and 5. The good news is that everything is read now and I can begin studying by review, which I find much more enjoyable. One thing that has surprised me continually throughout this studying process is that each chapter inevitably takes more time to read through than I anticipated. I am not a lackluster reader, either. I typically read voraciously and everything I can get my hands on; in my undergraduate years I studied English, if that is an indication of my love of reading. I cannot stress enough: give yourself time to read and comprehend each chapter of each module. It will take time. Modules 4 and 5 took me about 12 hours to read through in full this past weekend. Reading for comprehension will take time.

That being said, I do not recommend this “cram-style” that I am going for right now. I was hopeful to get all of the reading done before my holiday break from school was over, and I did. My retention of the material might not been all that I had hoped by reading through it in this manner. One thing that I noticed right away was there were quite a few questions on the pre-test on module 4. Module 4 is quite a hefty book, with three chapters heavy in information. The payments systems and concentration systems were the biggest struggle for me to wade through. The majority of my struggles deal with verbiage differences between the AFP and what we refer to concepts as in the workplace. It is imperative to learn the AFP language, however, if I want to test well. One piece of advice I received from a co-worker on our ethnography team is to use the language the AFP uses as they are generally quite consistent and want the same definitions that they lay out.

I took the module 4 post test once I finished with the reading. I did not do well on it, 70%, but I am chalking some of that up to distraction; hey, SVU was on and it has been a long day! I noticed right away that there were 83 questions on the quiz. That was the most of any post-module quiz I have taken. This is surely a meaty module that is designed to be paid attention to. I was surprised that there were not more questions related to equations in this module, as well.

Something I certainly would have struggled with had I not studied it in school is the concepts of futures, forwards, swaps and options. I would recommend working toward a thorough understanding of these concepts. I am hopeful that I will soon be able to take the modules 5 and 6 post test, then the pre-test again to understand where I am falling short. I will also be taking the post-test.

As a banker, I realized today I get banker’s hours and have MLK Jr. Day off. Since I have a dream of finishing this test with a passing grade, I just earned myself a free study/review day!

Module 3 is read. I could not resist trying the pre-test again since I only have modules 4 and 5 left to read through. I have to admit the first time I took the pre-test I scored a 50%. Yes, 50%. That felt awful for me. What was even more pathetic is that I was excited to get a 64% on the pre-test after I had studied modules 1, 2, 3 and 6. But the bright side is that most of the questions I got wrong are from modules 4 and 5. Furthermore, it shows that the AFP Learning System is posing questions that test the person’s knowledge who is studying for the test. They are not “gimme” questions at all.

Module 3 was fun for me. I enjoy studying things with which I have a rudimentary familiarity; they tend to make it a bit easier. I am quite familiar with working capital management, it is a common concept that I use to discuss strategy with customers. The two chapters deal with ways finance professionals can have a better handle on their working capital; this is something that we actively educate employees of our bank on so that we can show quantifiable improvements that can be achieved with various bank tools targeted at improving working capital management.

It was interesting to read and learn about the global working capital management techniques discussed in chapter 7. I work mainly with middle market firms, many whom do not have much of a global presence. Understanding the concepts that come along with global working capital management will be imperative in the future as we grow into a more global society. It is also interesting to understand the ways that companies are able to mitigate risk, increase liquidity and reduce costs effectively. In my bank department, there is a separate group that deals with international treasury management. As the liaison between my customers and my international treasury representative, it is educational to have an idea of what types of strategies she will recommend and why.

I am trying to devote more and more time to studying while I am able, even if it is just an hour here or an hour there. I know the test is looming, so I will be continuing to put my nose to the proverbial grindstone and keep working. I hope I pass so I don’t have to go through all this worry about it again in the spring! 

Would You Like Some Alphabet Soup with that Holiday Ham? 

ISO? EDI? ASC X12? IDK! Taking my mentor’s advice, I began to study the later chapters. One thing that I found out? There are a lot of acronyms! That makes for good flashcards, but it also means committing quite a bit to memory. I think I understand a bit of it, and my module 6 post test score leads me to believe I do, but there are a lot of acronyms and formats to remember.

I am not too technologically minded, so at times the concepts are difficult to grasp about coding and formatting and how systems feed into one another. These later chapters deal with writing policy and procedure, risk management and technology in treasury. Policy and procedure feel intuitive to me, as does most of risk management, so the hurdle I have in module 6 will be the learning of the technology standards. There are so many different formats and so many different ways to deliver the information; it can feel a bit overwhelming when reading through the chapter.

I just returned from my mother’s home for the holidays, and it was difficult to study. Compounding the commotion that is Christmas, my nieces found out they were going to Disney World. Needless to say, utter chaos reigned! Another unexpected thing I ran into was an instance of a family member being unsupportive of my taking the CTP exam. My sister made a remark to me about how she didn’t understand why I needed to spend time studying when I could be spending time with her. It was an odd remark coming from a teacher, but I think it encapsulates the frustration that inevitably comes when you are a working person trying to add studying to an already full plate of family and friends and job responsibilities. I had to brush it off; I know that there are many others that support my efforts, like my husband. He is more than willing to leave me alone today to go play video games while I am on PTO to study.

There is one more thing that came up last week that may throw a wrench in my ability to study. A wonderful lady I work with received a well-deserved promotion. I am thrilled for her. I also work closely with her, so I have a feeling I will be covering a bit for her until a replacement is in place. Adding to that issue is the fact that I would like to post for a position that has become available due to this movement. I will hopefully be interviewing for a new job within my group in the next few weeks as well. I know it is a long shot, but no one ever regrets trying, so here goes!

I am done with module six for the time being, post test taken and flashcards made. I need to finish module 3 and start/complete 4 and 5. I have exactly 4 weeks to go before exam day. I am looking forward to that day nervously, but the more I get into it, the more confident I am becoming.

My coworker had her baby this week. He is a perfect baby boy, and I could not be happier for her and her family. There is still a lot of upheaval at work, and it is tough to focus on studying when there is so much going on. After work, there is always a Christmas party or a holiday charity drive to attend. For some reason I always say yes to holiday get-togethers, they are much more fun than staying home and studying! Luckily I am done with school for the next two weeks, so my studying focus has shifted to the CTP. I was able to devote a full three hours to studying on Saturday morning, I felt accomplished.

I took the module 2 post test. I didn’t do so well. I was actually a bit miffed at my performance, I haven’t done that poorly on a test since a fifth grade geography group test. Unfortunately, I could not blame this one on anyone but myself. My only consolation was that a co-worker told me that fewer than 20 questions are on the equations in module 2. [editor's note:  10-15% of the questions on the exam contain calculations.  For more information on the CTP Test Specifications, see page 3 of the CTP Preparation Guide.] Hopefully she is right, but in the case that she’s not, I think I will do quite a bit of review of that module.

I met with my mentor this past week and she challenged me to pass my CTP on the first attempt. Many people in my office have taken it and not passed until their second or third try. She is counting on me to do well with the test. I always hate when I let people I respect down, so it adds an element of pressure to my studying. I mentioned that I was having a difficult time finding enough time to study, no matter how much time I tried to carve out, something else always takes precedence. She recommended that I focus more on the later chapters, as that is what she had the least amount of time to study and what she felt had a lot of test questions on.

With that advice, I shifted gears and began to study the later chapters. One thing that I am having trouble with in the later chapters is trying to make flashcards. For example, Chapter 16’s “Policies and Procedures” section seems so intuitive it made for easy reading, but hard to put onto flashcards. I am worried that I am taking it for granted and that there will be a big part of the test on that section and will go blank. I always worry when I feel like the information makes sense and is better presented in paragraph form. Flashcards feel right for multiple-choice formatted questions. When I can’t make a flashcard, I think that it is a subject more conducive to an essay test, therefore not as relevant to the CTP as it is a multiple choice test. This is going to be an Achilles heel for me.

As I continue to study, I hope work calms down a bit over the holidays. I really need to focus the next few weeks because once I am back at school I will be in my thesis semester. I will not have time to focus on my CTP. These next two weeks of break are going to be the time when I can crank up the studying.

It is December* and everywhere I go I am greeted with mini-lights and holiday cheer. I love Christmas! It is also an excellent time of year to stay indoors, stay warm and study. It can get to be negative thirty degrees at times here in Minnesota; my trips outdoors are limited. It also does not get sunny until well after I am usually at work. What is my solution to the winter darkness? Stay home longer and study!

In our monthly update, I let my boss know that I was having a hard time concentrating on any studying at the office. She was more than obliging to make a work-around for me since my company is paying for me to take the test. Our solution is to allow me more time to work at home.  We also agreed that the week prior to the test, I can work solely from home. I have been staying at home for the first hour to hour and a half to study, anything more than that seems indulgent. It has been a great help. I can have some coffee, plug into the office in case there is anything that genuinely requires my immediate attention, and study. The quiet helps a lot. I am through module 2 and onto module 3 at this point, but I have not had a chance to take the module 2 post test. I am fortunate as much of module 2 relates to calculations I have already learned through the course of my master’s program. Had I not had a good understanding of concepts like WACC and NPV, the calculations would require more work to learn.

I have found myself spending a lot of time going back and reviewing module 1. Retaining the information has been more of a challenge than I thought it would be; the regulations and articles of the laws trip me up a bit. I have also had another unexpected study help. I have been traveling a lot more for work lately. When I am on planes, it is an amazing time to do some studying. There is generally a bit of quiet, I am forced to sit still and the only thing I can occupy myself with is reading and studying.

I am still using the flashcards quite a bit, but I have not made good on my promise to get online more to review. I find that once I am online, I get distracted. There are emails to check and work to do. Once I am online and spend any time there, I think of things not related to the exam more quickly and have a much more difficult time staying focused. My deck of flashcards has grown quite large. I have gone through two packs of index cards. Sometimes, I write down questions that I know the answer to and need no studying at all. Hey, it’s the holidays. It is okay to give myself a little gift!

* editor's note:  Well, it was when she wrote this.  Candidates submitted blogs while they prepared for the 2011A window and were not able to edit their blogs after they were submitted. 

I am two and a half weeks into my study schedule. As usual, things have not gone as planned. The best laid intentions have been laid to waste as there has been some serious upheaval at the office. There has been a restructuring, which means that over 20 jobs were lost. There are heavy emotions all around the office; the group that was eliminated worked closely with my group. Furthermore, the restructuring will put additional demands on my position in the very near future, and grappling with this situation has taken precedent to my studies.

I have been able to carve out an hour or so three days a week to study, not the anticipated five. I have made my way through book one of the AFP Learning System, and I feel like I have a fairly good grasp on the material. I have started in on module 2, and am thankful it is short module, since I am a bit behind. The most beneficial study tool I have utilized thus far is homemade flashcards. They are as effective today as they were when I was learning multiplication in third grade. There is a certain connection that my brain forms when I write something down and associate it with the answer on the back. The repetition of the flashcards definitely helps to solidify that connection. The making of the flashcards is what makes it so effective for me; I would not have the same results with someone else’s flashcards. 

I have not been utilizing the online tools as much as I had anticipated. The reason?  I simply have a time crunch. I have just entered another class in my MBA program that focuses on case studies in corporate finance and it is a grueling course. It is an incredibly interesting course with real finance decisions faced by companies, but I have not had much time to do much else but study for school and work. I am making a resolution to get online once a week to review using the online tools going forward.

One online tool that I have used is the post-test for the first module. I passed the test, but not with a margin that I am incredibly comfortable with. I plan on re-assessing my knowledge periodically throughout my studies. I hope this will help me be more confident and increase my margin of passing. The post test took me about 25 minutes to complete. I found it to be a useful tool that I will be revisiting; it gave clear indication on areas that I needed to review more and areas in which I show mastery.

A positive is that an add-to-staff was granted for my workgroup of four. I am hoping this will alleviate some of the time crunch I am feeling at the office giving me more time to study. At the very least, it is calming my fears about my co-worker’s upcoming pregnancy leave! 

I know that I can pass this test, but I really need to focus in during the small amount of time I have to study.  I need to continue to utilize flashcards and my module book. I need to use the online tools that are available to me. I have all of the resources available to me; I just need to use them more. With the holidays fast approaching, time management will be the key factor to a successful study plan.

AFP Learning System, Treasury, Module Four, Chapter 9, Pgs. 4-66 to 4-68
ETM 3rd Ed., Chapter 9, Pgs. 313 to 314

 

Recall that the currency swap case that is presented in the BOK (See, References Below) concerns XYX that borrows $1,100,000 for a term of ten years in the US capital market. The funds are to be used for a 100 million Yen investment (USD/JPY 90.9091) in a Japanese business venture. XYZ plans to make semiannual interest payments to its US lenders with funds generated by the Japanese business venture. Accordingly, XYZ enters into a currency swap arrangement to limit its USD/JPY exchange rate exposure over the 10 year period. The cash flows associated with the swap will be as follows:

Initial Payments when Swap is Arranged

XYZ pays $1,100,000 to counterparty.

Counterparty pays 100 million Yen to XYZ. (USD/JPY 90.9091)

XYZ invests the100 million Yen in the Japanese business venture.

Interest Payments Activity Over 10 Years

XYZ makes semiannual interest payments in Yen to the counterparty, with funds that are generated by the Japanese business venture.

Counterparty makes semiannual interest payments to XYZ in dollars.

XYZ makes semiannual interest payments to its US lenders in dollars.

XYZ Net Semiannual Interest Payment

Year 10 Payments when Swap is Closed

XYZ pays counterparty 100 million Yen

Counterparty pays XYZ $1,100,000 @ USD/JPY 90.9091

XYZ pays US lenders $1,100,000

Studying the currency swap from the perspective of the cash flows that take place over the life of the swap might help you to prepare to answer conceptual exam questions designed to test your understanding of how currency swaps can limit exchange rate exposure. Alternatively, this study strategy could also prepare you to answer a computational question where you are asked to calculate the XYZ net semiannual interest payment to its US lenders.

References:

AFP Learning System, Treasury, Module Four, Chapter 9,. Pgs. 4-68 to 4-70
ETM 3rd Ed., Chapter 9, Pgs. 315 to 316

-George Schilling, CTP
 

So, I’d like to make you aware that you have access to an on-screen scientific calculator when you’re taking the test and to show you how you can use it to reduce your “number crunching” when answering a calculation question that requires you to solve for the Present Value of some Future Value.

Once you’ve brought-up the on-screen 4-function calculator, go to the tool bar and click on “View” and then click on “Scientific” which will give you access to the scientific calculator.

Before we get started with an example, here’s an alternative way the at the PV equation can expressed that will optimize your use of the scientific calculator.

Traditional Equation: PV = FV / (1 + i)ⁿ

Alternative Equation: PV = 1 / (1 + i)ⁿ x FV

Example:

XYZ company is in the process of analyzing capital expenditure proposals for inclusion in their Capital Budget as part of their annual budgeting cycle. One of these proposals is anticipated to generate annual cash flows of $10,000/year for 10 years. If XYZ has a WACC of 13%, what is the PV of the anticipated cash flow for the sixth year?

Answering this question by using the alternative PV equation and the scientific calculator works like this:

As you can see, this is a very quick way of calculating the PV for any FV. And would be very useful for answering a Net Present Value calculation question where you need to calculate the PV’s for a number of FV’s into the future.

- George Schilling, CTP

I would like to start my first blog by telling you about me.  I started working for a large retailer in December 2005.  I started my career with the company as an invoice processing clerk, and then was promoted to an analyst doing forecasting and analysis in the logistics department.  Ten months ago I was promoted again to a financial analyst in the corporate treasury department.  I absolutely love my job and really feel like I am part of a great team!  In addition to working full time I am also working on my MBA in Management.  If that is not enough to keep me busy, in June of 2010 I had my first child, a little girl who is the absolute joy of my life!  I’m signed up to take the CTP exam at the end of the upcoming window.

I decided to take the CTP exam shortly after starting my current position. When I was hired for the position the CTP credential was mentioned as something that management in the department would like me to obtain.  I am working towards being in a management role in the next three years.  I look at the CTP credential the same way I look at the MBA.   If you want to advance in your career you need something to set yourself apart from your competition.  Everyone has a bachelor’s degree now and I feel like I need more in order to advance in my career.  When looking at the competition at my company everyone has a bachelors and an MBA.  I need the CTP credential to make me stand out from everyone else.

After having my daughter I jumped right back into work and school, which having to do again I would have eased back into the busyness of my normal life. I ended up not performing as well as I should have at school and landed myself on academic probation.  I was originally signed up to take the CTP exam in the previous window but with everything else going on I didn’t dedicate as much time as I should have studying for the exam and moved it to the next testing window.  I am now back in good standing at school and feel like I have the proper work/life balance.  I can dedicate the appropriate amount of time studying for the exam.  The extra time was well worth the $125 transfer fee! 

As of now I have not started actively studying for the exam.   I will begin to study during this upcoming week.  My manager is allowing me to block off time on my calendar to go some place quiet and study.

I hope that this blog about my experience will help another CTP candidate who is juggling just as much, if not more than I am. 

Deciding to take CTP 

Ten years into my finance career, I decided to study for the Certified Treasury Professional designation to ensure I have the technical skills to give me a professional edge in an international job market.

In 2001, I graduated from University of Manitoba with my Bachelor of Commerce, majoring in finance. Soon after, I started working as a financial analyst for a privately owned Manitoba window manufacturer with international distribution. In my first four years with the company, I received my CMA (Certified Managerial Accountant) designation, which is one of the three major Canadian accounting designations, the other two being the Chartered Accountant, and Certified General Accountant. A few years later, I was promoted to manager of treasury and accounting, a role which involved financial reporting, cash management including FX hedging, payments and forecasting, year end audits and cost accounting. I’m now employed in the New South Wales State government as a senior management accountant.

Reasons for taking the CTP 

The CFO of my previous company suggested the CTP to me a few years ago; he knew it would be useful because in my role at that time, I was responsible for treasury functions including cash management and foreign exchange. The CFO recommended the CTP because it is internationally recognised and well regarded.

I’d been thinking of ways to update my skills, especially because it’s been five years since I completed the CMA program. I considered doing an MBA, but I felt at this point it may not benefit my career sufficiently to offset the time and cost involved. The CTP seemed like a more suitable option, but finding the time to study was a challenge due to long work hours, commuting, my wedding and a new home, and so I waited to sign up.

Recently, though, my wife and I moved from Canada to Australia; she was accepted for a Masters program in Sydney. It took me three months to find a job here, which surprised me because I could have found employment easily in Canada, and the Australian economy was stronger at the time. During my time job searching, I became convinced that enhancing my qualifications could give me a professional advantage.

Because finding a job overseas is more challenging, I need to take opportunities to make my resume stand out, but also have an internationally recognised qualification that will be applicable upon return to Canada or elsewhere. The timing has worked out well, as I will be able to create space in my daily routines for studying. My current job has a short commute and limited overtime; my wife and I have fewer commitments in Sydney; as well, my wife and I don’t have kids, so we have the benefit of predictable routines and stability. While I’m studying, a good side benefit is that my study time will go toward my CMA professional development hours.

At this point, my career path could go in a few different directions, but I feel the CTP is an excellent choice to give me greater options for the future.

Most of my Treasury and finance knowledge has been on the job training as my undergraduate major was pure mathematics. I did take a handful of financial courses towards the end of my college career as I realized my interest, but concepts seem to stick in my mind more easily during real life applications.

I decided to sign up for the CTP about a year ago and initially signed up for the last exam window. The study tools I used was the AFP Learning System: Treasury, 3rd Edition. I took the online Pre-Test to understand where I needed improvement and then began studying. My study tactic was to first tackle the written books - read through all the material, highlight, take notes where appropriate, answer the questions at the end of each chapter, etc and then later on in my study prep I was planning on heavily utilizing the online training modules and resources. Unfortunately, during the early part of my studies, two of my immediate family members became extremely ill and I had to defer my studies to the next exam window. I had only gotten through the first two modules at the time where I halted my studies.

I recently took up the studying regime again a few weeks ago and also signed up for the SFTMA study group. I was hoping the study group would keep me on track with studying and provide tips on studying techniques that could only be gained directly from participants with past experience. The study group goes over one chapter (presentation and question review) each week. Not every chapter is covered during the 13 sessions, but just the ones that chapters with the most past questions on the exam. The presentations are presented and prepared by different members of the group and the questions are created by the group organizers. The study group seems to be at a faster pace than my current studying pace, but so far I find the study sessions to be extremely helpful because they provide me with a good overview of chapters and alert me of areas I need to focus on. It is also good to have a set time blocked off each week dedicated to CTP studying as it keeps you on track and focused.

I decided this time around that I would not only read the chapters of the written book, but also to type out bullet point notes which I can take with me and study rather than always having to carry around the large books. Note-taking is making getting through the written text take much longer, but hopefully it will pay off in the long run. I am currently working my way through Module 1 and I hope to be on Module 2 by the time I write my next post.

A candidate for the bar exam needs to be deemed of good character and psychologically fit. It is a blessing there is no such standard for the CTP exam, as I am fairly certain that anyone who evaluated me would find me clinically insane to try to study for and pass the exam in thirteen weeks concurrent to completing my capstone project for my MBA. Additionally, I will soon be taking on more responsibility at work due to a co-worker’s impending maternity leave. I have a feeling this is going to be a crazy couple of months. However, since there is no disqualifying pre-test that could render me crazy for undertaking all of this during the holiday season, here goes!

I took the Learning System pretest and can, with 100% certainty, report there is no way I would be able to pass the test if it were given to me tomorrow. I have a lot of work to do before being able to post passing numbers. The real kicker is that I do not just want to pass this exam; I really want to learn the material. I want to know how the clients I work with do their job on a daily basis and how they understand their work. I am in cash management sales at a bank, and I need to know what governs the environment my customers work in and how they use the tools I sell on a daily basis to make their jobs easier and more efficient. The CTP exam is one way that I can strengthen my understanding of my clients.

In brainstorming ways to make this work, my first thought was to pray for a debilitating, traffic-stopping, blizzard to render me housebound for a week to study and cram. After all, this is Minnesota and there is a storm of the century nearly every year.  After further consideration, though, I can’t risk it with La Nina and my weather guy promising a dry winter. Drats, I guess I need to move to plan B: discipline.  In order to learn the material needed to pass the exam in such a short amount of time, I will need discipline. A marathoner, I am more apt to stick to a running schedule if I lay it out long before the race rather than go day by day. This will need to be my strategy going into the studying of this material through the next thirteen weeks.

I will be using the AFP Learning System to study; there are six modules. I intend to work through each module in two weeks, reading, utilizing homemade flashcards and using the online tools provided. I will carve out 1 hour in the morning each day to study. The morning is when I am most alert and able to absorb what I read. This will also ensure that I will not interfere with my MBA studies, which are oftentimes at night and with my study group. I will review flashcards on my bus commute, which gives me an extra two hours or so of study time per week. I will keep you posted on how this all goes, updating you next week. I have a funny feeling my new husband will be doing a bit more housework than normal the next couple months.

Our first blogger, Kate, is a treasury management analyst for a large bank. She has accepted the challenge of preparing for the CTP exam while completing her MBA capstone project and taking on additional responsibility at work. We’ll follow her while she uses the AFP Learning System Treasury to keep her studies on track while she juggles all of those responsibilities.

Our second blogger, Steve, recently relocated to Australia from Canada and hopes to make his resume stand out in this competitive environment by adding the CTP credential to his list of accomplishments. He currently works for a governmental entity.

Our third blogger, Susan, works for a national retailer and has some of the work/life balance challenges that so many candidates face. She is using the Essentials of Treasury Management to study for the CTP while working on her MBA and still finding time for her toddler.

Our final blogger works for a large tech company and has been in treasury for just 1.5 years. Rose is using the AFP Learning System Treasury. To supplement her studies, she has joined a study group organized by her local TMA association. In the spirit of full disclosure, our bloggers prepared for and took the exam in the December 2011- January 2012 testing window.

However, they prepared and submitted these blog entries throughout the course of their studies and did not have the opportunity to edit them after the fact. Some of their names above have been changed— we didn’t want the pressure of being in the spotlight to change their study habits. We wanted them to be completely honest about the process and share the struggles and successes so future candidates could benefit from their experiences.

Follow our bloggers by checking back every week to read the latest postings.

This is the way it has been described to me: The participant writes down the formulas on a single sheet of paper, as they come across them in their studies of the BOK. Then, just before they take the test, they review all the formulas over and over. When they get to the testing facility, they go in and, using the paper and pencil or whiteboard provided, proceed to write down as many of the formulas as they can recall, as quickly as possible. Then they will begin the exam and, whenever a calculation is called for, they will refer to their sheet of paper. Hopefully, the formula is listed, they do the calculation, and go on to the next question.

As I’ve said before, there are as many ways to do something as there are people to get it done. If I don’t understand the logic of a formula, I can’t make it work. But that’s me. If you can cram the formulas into your mind, dump them to a piece of paper, and use them, go for it!

- Fred Butterfield, CTP

editor's note - If you choose to do this, make sure you do it only AFTER your exam has officially began.  Several candidates have tried to do it immediately upon sitting down at the testing computer and failed to notice the Non Disclosure Agreement on the screen.  When they finished writing down their notes, they looked up and saw that the five minutes they had to agree to the NDA had passed and the test had been locked.  If this happens, a test center administrator cannot restart the exam.  It's as if the candidate has taken the exam and, should they like to attempt the exam in the future, they will need to submit a Re-examination form, pay the $300 fee and take the exam in another testing window.   

- Fred Butterfield, CTP

When you get closer to exam time, you’ll want to pull out that list of topics and subjects and re-visit them, precisely because they are unfamiliar to you.  It is entirely possible that you can use logic and reasoning to figure out the answer to a question related to a topic or subject that is familiar to you.  With a question on a topic or subject that is unfamiliar, sometimes the best you can do is go

“Huh?”

My suggestion is to take time, after you’ve gone through the BOK but before the exam, and go back over the unfamiliar parts in a deeper dive to increase your understanding to the greatest degree you can.  Obviously, you won’t know it as well as a 20 year veteran, but you should be able to grasp the principles and theories presented in the text.  That’s the starting point for all of us.

- Fred Butterfield, CTP

- Fred Butterfield, CTP

- Fred Butterfield, CTP

- Fred Butterfield, CTP

- Fred Butterfield, CTP

- Fred Butterfield, CTP

- Fred Butterfield, CTP

- Fred Butterfield, CTP

This equation is one of the Statistical Time Series Forecasting techniques that is discussed in the BOK in connection with Cash Forecasting and can be found in the following exam preparation resources:

• AFP Learning System, Treasury – Participant Guide, Page S5-18, Slide 45 (Note: The input data for the calculation is on Slide 44).
• ETM 3rd Ed. Pages 286 – 288.

The Exponential Smoothing equation as presented in the BOK can be restated as follows:

Next Period Forecast = RF + [alpha (RA - RF)]

Where:

RF is the most recent forecast value.

RA is the most recent actual value.

“alpha” is the smoothing constant.

Using input from slide 44 and applying the restated Exponential Smoothing equation the day 8 forecast, for example, can be calculated as follows:

Finally, here’s a couple of additional points to remember about this equation:

Remember the general rule, “always work equations from the inside out” as I’ve shown in the day 8 calculation. Where, first I calculated the value within the parentheses, then calculated the value within the brackets and then added this result to the $120,760.

The smoothing constant “alpha”, which is a value somewhere between zero and one, is selected by the forecaster. So, if you get the Exponential Smoothing calculation on the exam, the “alpha” to be used in the calculation will be given to you as part of the input data.

-George Schilling, CTP

This equation is being introduced in the ETM 3rd Ed. and is used in the “Float Neutral Calculation” (FNC) which can be found in the following exam preparation resources:

• AFP Learning System, Treasury- Participant Guide, Pg. S4-15, Slide 37
• ETM 3rd Ed., Pages 236-237

The equation and example as presented in the BOK can be restated as follows:

From an operational standpoint, this calculation can serve as a valuable trading partner negotiation tool. Because you can quantify the benefit (i.e. the discount) to be given to a customer to compensate them for the loss of float that will result from the implementation of a seller’s e-commerce initiative.

For example, the FNC could be used to solve the following exam question which is a variation of the BOK sample application:

“A seller currently gives its customers credit terms of Net 45, but wants to start electronically drawing the payment for products sold from the customers’ bank accounts on the day of delivery. If the customers’ opportunity cost of funds is typically12%, what is the discount the seller should give to their customers to compensate them for their loss of float”?

Finally, the less complicated form of the FNC that I’ve suggested is actually a variation of and therefore can be derived from the “Cost for a Buyer of Not Taking the Cash Discount” equation. You might want to take a look at this equation to see how it is related to the FNC because it might help give you a better understanding of both of these equations an how they can be applied.

-George Schilling, CTP

The preparation of pro forma financial statements is addressed twice in the BOK. I have previously suggested some exam preparation strategies for this subject in the context of Cash Forecasting where Percent of Sales is the primary forecasting technique used to prepare these statements. (See Blog 17, “No Calculation Left Behind”) This activity is also covered in Financial Planning and Analysis in the context of constructing pro forma statements using data from the Operating and Financial Budgets. So, what follows are some points about the budgeting process that may help to increase your understanding of this FP&A activity and thereby prepare you to answer a potential exam question such as:

“When preparing a Pro Forma Income Statement, which of the following budgets would you use as a data source to determine the Cost of Goods Sold ?”

A) Capital Budget

B) Production/Purchases Budget

C) Sales/Revenue Budget

D) Cash Budget

Answer: B

Here’s some points about the budgeting process.

1) The budgets that are prepared during the annual budgeting process fall into two categories which are; Operating Budgets and Financial Budgets.

2) The Operating Budget answers two questions:

• “What is the estimated level of sales dollars for the coming year?” (i.e. the Sales/Revenue Budget)
• “How much is it going to cost us to fund the Operating Cycle”? (i.e. the total of the Production/Purchasing and Operating Expenses Budgets)

3) The Financial Budget answers three questions:

• “What is the estimated level of Operating Cash Flow in the coming year”? (i.e. the Cash Budget)
• “ How much do we plan to spend on capital investments”? (i.e. the Capital Budget)
• “If the total of the estimated expenditures for funding the operating cycle and the capital investments is predicted to exceed the estimated level of Operating Cash Flow, how should we cover the deficit”? (i.e. the Financing Plan)

These budgets and how they are tied to the various Income Statement and Balance Sheet accounts is specifically outlined in Exhibit 5.5 which can be found in the following two exam preparation resources:

• AFP Learning System, Treasury - Module Two - Page 2-64
• ETM 3rd Ed. - Page 166

I think that you might consider “subjecting the various budgets to questions” like the examples I’ve mentioned as a preparation strategy for answering potential exam questions designed to test your understanding of how the linkage between the various budgets and the financial statement accounts, that is outlined in Exhibit 5.5, is used to construct pro forma financial statements.

-George Schilling, CTP

The advantage of this method is that you don’t have to remember if you should multiply or divide by a given FX quote to solve for the amount of US$ or foreign currency.

There are three steps in this method:

1) Set up your ratio equation.

2) Cross Multiply

3) If necessary, isolate the unknown currency by dividing each side of your equation by common terms.

Here’s a couple of examples taken from the Participants Guide (pg S6-8) of the AFP Learning System, Treasury 3rd Ed.

Slide 21

How many euros would $2,000,000 buy if the quoted rate for the USD equivalent is EUR 1.3383?

1) Set up your Ratios:

1 / $1.3383 = EUR ? / $2,000,000

2) Cross Multiply

$1.3383 X EUR ? = $2,000,000

3) Isolate the unknown currency

$1.3383 X EUR ? / $1.3383 = $2,000,000 / $1.3383

4) Solve

EUR ? = 1,494,433

Slide 22

How many Yen would $2,000,000 buy if the quoted rate for the Yen is USD / JPY 92.56?

1) Set up the Ratios

1 / 92.56 = $ 2,000,000/Yen?

2) Cross Multiply

Yen ? = 92.56 X $ 2,000,000

3) Solve

Yen ? = 185,120,000

This alternative method for solving FX conversion questions, if properly applied, will always give you the correct answer without the need to memorize and apply the FX conversion rule.

-George Schilling, CTP

- George Schilling, CTP

Net Present Value

The NPV of a capital investment proposal is the difference between the sum of the present values (PVs) of the expected future cash flows from the proposal and the initial investment. Simply stated as:

NPV = Sum of the PVs - Initial Investment

So, if you get a NPV calculation question on the CTP exam, you need to first identify or calculate the PVs of the future cash flows that the capital investment is expected to generate. Next, subtract the initial investment from the total of the PVs. If the result is a positive dollar amount (i.e. NPV > 0), then the proposal is acceptable.

Profitability Index

PI is used to prioritize the capital investment proposals that have been determined to be acceptable because they have positive NPVs. PI is calculated as follows:

PI = Sum of the PVs / Initial Investment

If the PI for a given proposal is greater than 1 (i.e. PI > 1) then it is acceptable. As you can see, both the NPV and the PI give you the same answer for a given capital investment relative to its acceptability. That is, if a proposal has a positive NPV then its PI will be greater than 1. The PI answers the question; how much greater?

Internal Rate of Return

The IRR is the discount rate that, when used in the PV calculations of expected future cash flows, drives a proposed capital investments’ NPV to zero. The IRR accomplishes this by aggressively discounting the expected future cash flows until they are reduced to amounts that in total are equal to the initial investment. This can be simply stated as follows:

NPV = Zero when the Sum of the PVs = Initial Investment

For a proposed capital investment to be acceptable, the IRR must be greater than the company WACC (i.e. IRR > WACC)

By thinking about all three of these capital budgeting “triage” techniques as being based on the relationship between the Sum of the PVs and the Initial Investment might help you with exam questions designed to test your understanding of how these techniques are used in the capital budgeting process. .

--George Schilling, CTP

- George Schilling, CTP

However, there are a few calculations you could get as an exam question that can require a substantial amount of “number crunching”. Because of this, there might be a temptation to not prepare for this type of calculation and if one of them comes up in your exam, just guess. While this strategy gives you a 25% chance of getting the correct answer, I’d like suggest a strategy that might increase your chances of answering this type of calculation correctly.

This preparation strategy starts with your asking the following question:

“ Is there a way that my understanding of the underlying concept that this calculation is based on can be tested without the need to perform the entire calculation as it’s presented in the BOK”?

A good example of this type of calculation is forecasting pro-forma financial statements (i.e. Income Statement and Balance Sheet) using the Percent of Sales Method (POSM). So let’s see how my suggested preparation strategy would work in this case (refer to Exhibits 8.5A and 8.5B in the BOK, the Essentials of Treasury Management, 3rd edition).

First, the underlying concept of the POSM is that the value of certain accounts will vary with changes in sales. And primarily these accounts are as follows:

Income Statement: 

• Cost of Goods Sold
• Selling and Administrative Expense

Balance Sheet: 

• Accounts Receivable
• Inventory
• Accounts Payable

Given this, I think your understanding of POSM could be tested with a minimum amount of “number crunching” by asking you the following question:

“ If Accounts Receivable in the current period is $300 and Sales are projected to increase by 10%, what is the forecasted value of Accounts Receivable using the POSM”?

Here’s how it would work:

AR Forecast = AR Actual x (1 + Projected Sales Increase)

= $300 x (1 + .10)

= $300 x 1.10

= $330

Of course, there is no way of knowing which calculations will be on the exam. But, by studying how to apply this strategy to those potential exam questions that could require a lot of “number crunching”, you are proactively preparing yourself to answer this type of question rather than just simply guessing at its answer. And finally, with this strategy, you have a tool for studying all of the calculations in the BOK so that “no calculation is left behind”.

-George Schilling, CTP

Step 1) Restructure the equation, like so,

Dollar Discount                                             Par Value x Discount Rate x Days
______________                 =                  ______________________________
           1                                                                                360

Step 2) “Cross Multiply” (i.e. Multiply Diagonally),

Par Value x Discount Rate x Days = Dollar Discount x 360

Step 3) Isolate the Discount Rate by dividing both sides of the equation by the similar terms that are associated with Discount Rate ( in this case, the left side)

Par Value x Discount Rate x Days                                          Discount x 360
____________________________               =                   _________________
Par Value x Days                                                                    Par Value x Days

On the left side, the similar terms of Par Value and Days cancel out. On the right side there are no similar terms to cancel out. The result is the derived equation for Discount Rate, which is:

Discount Rate = Discount x 360 / Par Value x Days

So, while it’s true that some people might never have a use for the algebra they had to study in school, an understanding of how to apply a little bit of it can certainly help when you’re preparing to pass the CTP exam.

-George Schilling, CTP

So, if you attend one of these courses, you should not expect to learn everything you need to know to prepare for the exam during the course. Unfortunately, the expectations of some CTP candidates are just the opposite so they don’t come to the review course properly prepared. And I suspect that in some cases their attendance at the review course is the first time they have looked at their study materials.

Pre-course study is essential because your major benefit of attending a CTP review course is the opportunity to get clarification and a better understanding of those areas of the BOK that you’ve been having some difficulty with as you have been working through your study schedule. With this in mind, one approach you can use to prepare for a CTP review course is to develop a list of questions related to specific items that are covered in those areas of the BOK where you need to clarify your understanding of the subject matter.

These specific item questions might take the form of:

• How does it work?
• Why is it important?
• Does it relate to some other part of the BOK?
• Is there an easier way to “crunch” the numbers?

In listening skills training, this approach is know as “looking for a product” and it is an  effective listening technique that helps a listener focus on the information that is being communicated.

Given the intensive fast-paced nature of the CTP exam review course, preparing a pre-course list of “products you are looking for” (i.e. your questions related to specific subject matter items that need clarification) can help you get the most out of this training experience.

-George Schilling, CTP

-George Schilling, CTP

- George Schilling, CTP

- George Schilling, CTP

This is a time management strategy to help you “bank” the time you will need to come back and work on questions that you previously marked to answer later and if necessary, guess on. Given the number of exam questions and the time allotted to complete the exam, you have roughly 30 seconds to answer each question. So, if you haven’t selected an answer for a question after about 30 seconds, mark it and move on.

-George Schilling, CTP

Data surfing helps us in this daily information screening effort by quickly reducing information to a manageable number of “data bites”.  Usually it works pretty well for us but it does have a dark side when data surfing is applied to CTP exam questions, because you might misinterpret what the question is asking.  Therefore, it is absolutely necessary to “drill down” into the exam questions and carefully dissect them to determine what the question is asking.

Here’s a few “questions” you should ask of an exam question to help you to clarify what it is asking:

1)      Does the question contain TMI (too much information)? 

Some questions might contain information that is related to the question but is not pertinent to determining the correct answer.

2)      What calculation am I being asked to perform? 

Some calculations in the BOK have a spin off calculation such as with Days Sales Outstanding where Days Past Due is a spin off of DSO.

Some calculations have very similar variations such as with the Current Ratio and the Quick Ratio.

3)      Who am I in this question? 

This is an especially important question to ask when dealing with short term investing and borrowing calculations questions for example, because these two activities are mirror images of each other and therefore their equations are very similar.

As a general rule, read every exam question very carefully.

-George Schilling, CTP

-George Schilling, CTP

Over the last couple of years a number of CTP candidates who have taken the exam have told me that they got a conceptual rather than a computational question about the WACC.  And while they were comfortable with how to “crunch the numbers”, they were not prepared to answer a question where they were asked how a change in one of the variables like the Marginal Tax Rate, for example, would impact a company’s WACC.  So, here are a couple of guidelines that can be used to answer conceptual questions about calculations that you can apply to the WACC specifically or to other calculations generally.

1)      The WACC varies PROPORTIONALLY with changes in the following: 

• Borrowing Rate: If the borrowing rate for new financing changes due to rising or falling interest  rates, the WACC will increase or decrease respectively.
• Cost of Equity:   If this variable increases or decreases due to a re-evaluation of its cost, the WACC will increase or decrease respectively.

2)      The WACC varies INVERSELY with changes in the Marginal Tax Rate(MTR):

• If  MTR increases then the WACC decreases.
• If  MTR decreases then the WACC increases.

To apply these guidelines generally when you are studying a calculation just ask yourself which of the variables impact the answer proportionally and which impact the answer inversely.

Using  this technique to study the calculations can help you to; 1) better understand how to solve a given calculation or 2) prepare you to answer a conceptual question regarding the calculation.

-George Schilling, CTP

- George Schilling, CTP

-George Schilling, CTP

I suggest that one approach to making this part of OCF more easily understood is to use the following chart to answer potential exam questions relative to how changes in the current accounts impact OCF.

The most basic way you can use this chart is to first ask the following three questions of the input data to the exam question:

• What is the amount of the period-over-period change?
• Is it an increase or decrease?
• Is the account in question an Asset or Liability?

The results of this thought process can then be used to answer questions which require you to determine how a period-over-period change in a given current account will affect OCF. That is, will this change generate a Source or Use of cash.

Also, you could be asked to answer “higher thinking” questions where you have to evaluate what the impact of various business decisions will be on OCF. For example, a decision to increase credit terms to your customers will result in a USE of cash. Why, because an increase in credit terms will increase the Accounts Receivable balance which is an asset account and as the chart indicates, an increase in an asset generates a USE of cash.

I’d recommend putting the SOURCE/USE chart on a flash card and then apply it using the financial statements in the ETM.

- George Schilling, CTP

I think that connecting the dots between these higher order concepts, once you’ve identified them, and their associated topics can help you prepare for the CTP exam in a couple of ways. First, if you study how certain individual topics are tied together, you can expand and reinforce your understanding of them and therefore be better prepared to answer questions that specifically address those topics. Second, this study technique can help you prepare to answer the more comprehensive and therefore more difficult "higher thinking" questions.

The Cash Conversion Cycle is a good example of what I’m referring to as a higher order concept that has connections to other topics in the ETM. As an isolated topic, it is simply one of the many calculations that need to be learned so you can correctly "crunch the numbers". But, on a higher level, the CCC quantifies the amount of resources that a company has invested in its operating cycle and therefore some of the other topics that the CCC is connected to in the 3rd Edition of Essentials of Treasury Management are:

Chapter 7

• Operating Cycle
• Cash Flow Time Line
• Days Sales Outstanding

Chapter 5

• Current Ratio
• Working Capital

Chapter 6

• Cash Turnover

So, as you prepare for the exam, ask yourself if the particular topic you are studying is a higher order concept that is connected to other topics. If so, determine how and why these connection exist.

- George Schilling, CTP

- George Schilling, CTP

- George Schilling, CTP

Here’s an example from the Essentials for Treasury Management, 2nd edition (ETM2) Chapter 10 (or ETM 3rd Ed. Chapter 11) which covers short-term investing. In that chapter, there are the following three annual yield calculations: 

• Discount Rate 
• Money Market Yield 
• Bond Equivalent Yield 

The operational context of these calculations is related to the two objectives of short-term investing which are in descending order of priority: 

• Don’t lose the money (ie: preserve the principle) 
• Try to earn a return (ie: return is secondary) 

So, if you’re faced with two competing short-term investment opportunities to place some surplus cash, and both have the same amount of risk, you need to determine which will give you the highest return. This might not be immediately obvious if, for example, one is sold on a discount basis and the other is sold on an interest bearing basis. The operational context in this case, which is driven by the objectives of short-term investing, is that these calculations are used to “level the playing field” between these investment opportunities to help you make an informed decision regarding which has the highest yield. 

Additionally if you’re using flash cards as a study technique put the equation on one side of the card and its operational context, once you’ve identified it, on the other side. 

- George Schilling, CTP

Read study tips by our faculty, including George Schilling, CTP and Fred Butterfield, CTP. George Schilling has been teaching classes and webinars, including the Testing Tips Webinar, for AFP for more than twelve years. He has provided training in corporate finance, treasury management and project management since 1988. Before that, he was the assistant treasurer for Chevron USA. George holds an MBA from Golden Gate University and has completed post-graduate work in financial management at Stanford University.

Fred Butterfield has been a member of AFP since 1996. He has lent his subject matter expertise to all stages of the CTP examination development and the Essentials of Treasury Management body of knowledge textbook. Fred has been a member of the Rocky Mountain AFP (formerly the Colorado TMA) for several years. He has served on the Board of Directors in all executive roles and on several of the committees. Fred is also a member of the Treasury Advisory Group.

We also have candidate posts from the 2012A/2012B testing windows that share the experiences and challenges of examination preparation.

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