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Hello Friends, first of all, thanks a lot for giving such a favorable response to article on “Preparation Strategy for CA Final Financial Reporting” Now in the same manner I would like to throw light on preparation of very interesting subject of CA Final i.e. Strategic Financial Management.

I always try to help out students those who are in difficult positions. I can feel the pain when students literally go through the angst and pain on the eve of the exam when he is struggling to revise the syllabus of SFM after the Accounts Exam. I exactly feel the same when I had appeared for group one exam. I have realized that many students consider SFM as a tuff subject to handle and score, but honestly this is not the case. Just like costing, with proper and conceptual study, SFM can be managed easily with good score in exam. Don't worry folks I am here for you.

I would like would like to give some guidance on CA final SFM Paper based on my experience.

About the subject (Initial thought):

Generally, The judgment of Students. So called tensions are given herein below:-

a) The subject is vast in syllabus and concepts and problems.
b) Question paper is very uncertain.
c) Much of Hard work is required to crack the subject.

Remedies to above tensions

a) When you will start studying, you realized that the subject is more on concepts and vast syllabus becomes quite manageable if you build strong understanding of concepts rather simply solving problems.

b)  The size of the syllabus, it is quite vast in general but the syllabus prescribed by ICAI for testing in the examinations is quite less and concise than the general scope of the subject.(so a thorough understanding of the prescribed topics is enough for success in the exam, stuck to study 'all' (whole subject as in practice) doesn't work in exam success )

c) Coming to the scope of subject the inputs should be entirely considered from the study material(ICAI) as well as referring to the class notes and any other reference material if you feel necessary.

Some students have been made a concept that SFM is all about Derivatives, Portfolio, and Capital Budgeting. But there a slight difference if you have analyzed this paper properly. According to me there are lot of small topics which are easier and can be prepared with 100% accuracy in short span of time. Rather than devoting timing on preparing on these said papers (and getting it half correct in exam hall) students can easily cover small topics in a short span of time (and score 40-50 marks with full accuracy). If prepare this paper well, then surely you will awarded with exemption.

Topic wise in order of preference :-

1. Dividend Policy
2. Leasing
3. Merger, Acquisitions and Restructuring
4. Forex Management
5. Financial Services
6. Mutual Fund
7. Security Analysis
8. Derivatives
9. Portfolio
10. Capital Budgeting

Theory:-

While starting, you can go to practical topic like Divined Policy, Leasing, Forex, Merger, Security analysis etc. But never ignore or try to underweight theory part, these cover 20-25 percentage of exam paper in paper 2 “SFM”.

Theory portion play a vital role in this paper. If nothing will work, then surely theory will work in this paper. Weightage of theory portion usually remains 20-30 marks, but generally we found 16 marks of theory in every term paper. So, make your plan accordingly.

I personally recommend you to read theory portion at least one hours on daily basis then only you can able to memories and able to write in exam hall.


ABC Analysis according to trend of marks allocations
Category
Topics
Weightage
A
Dividend, Leasing, Merger, Forex, Mutual Fund
40-50 Marks
B
Financial Services, Security analysis, Theory portion
30-40 marks
C
Derivatives, Portfolio and Capital budgeting etc
20-30 marks

Sources of Preparation/Books to be referred:

I am not giving too much stressed on it in broadly, assuming that you have read my article previous article on  Success mantra for CA exam.

http://www.caclubindia.com/articles/success-mantra-for-ca-exam--24549.asp

Materials
Study Materials / Class notes
Practice Manual
Revision Test papers (to extent available)
Suggested answers (to extent available)
Padhuka for practice
Mock Test Papers (at least for two terms)

You may also refer these books Rajesh Makkar, S.D.Bala or A. N Sridhar for reference and self study. I personally recommend you to follow makkar sir notes/books.

This is CA Final and not B.Com. Here the “Approach to the Sum” matters much more than “Numericals” that you solve. You can’t game the Paper. So, solve it the above mentioned  materials .

HOW TO STUDY and OTHER KEY POINTS

a) First of all cover the topics mentioned in Category A & B thereafter focus on Category C .  After covering the Category A & B , you would gain confidence on the subject. Then accomplish the topics Category  C.

I am sharing my personal experience with you, when i was preparing for the paper, i totally skipped Category C topics and theory portion in Category  B and finally fetched 73 marks. So, it's all about good planning and execution.

b) Theory portion can be prepared on daily basis. Recommend to study atleast one hour daily.

c) SFM, the question paper is purely practical. Therefore, you have to practice solving a good number of questions on each topic. Try to solve each problem on your own (by yourself), in spite of just auditing the solution from notebook or study material. So, Do practice on regular basis. Don't refer to solution from your notebook or any where else.

" You will have to pay the price for Success yourself – no one else can pay it for you. "

d) Derivates and Capital budgeting are definite questions for at least 12 marks each. (One question will be easy and the other one hard). So, make your planning accordingly to fetch good marks.

e) OTHER KEY POINTS

To Score high in this paper, Keep these points in your mind while preparing for this paper.

1)         Use of proper and prescribed format for presentation.

2)         After the accounts exam, first and foremost, forget about the accounts exam-it’s a sunk gain or sunk cost not relevant in decision making.

3)         Adequate Working Notes in supporting to your answers and State the assumption clearly

4)         Answer the questions with due emphasis on the provisions of Accounting Standards.

5)         Go through each and every topic thoroughly and understand conceptual points supporting each topic.

6)         Try to solve as many questions as you can and also go through Practice Manual, Revision test papers, Suggested answers, Mock Test papers. (to the extent possible and available).

7)         You should test your preparation by attempting some previous exam paper, revisions test papers, mock test papers under ultimate exam condition or environment. Later on check the result of your effort and make necessary correction/modification to your study preparations.

8)         I personally recommend you to attempt Revision test papers, Suggested answers, Mock test papers at least one in a day. you will find variety of questions and you will never get disappointed in exam hall.

9)         If you failed more than three times, I prefer you to replace your all the old books with new books preferably  new authors.

10)       Impress the valuator with the Starting answers. It should represent you caliber to give a good answer in all respects: content, neatness and presentation.

" First Impression is The Last Impression"


11)       Avoid overwriting. Where they become inevitable, strike off and write again. Clarity is more important than neatness

12)       Always leave left hand page for showing workings, assumptions and notes. Workings are a must for the answer to be valid and should be fairly elaborate. Present them parallel to the question concerned. Use last page of the booklet for rough work.

13)       If there is a question for which you do know the answer but do not have the time to write it fully, write a synopsis for the answer. This should be done, if required, only at the end of the answer sheet.

14) Do not try to deceive the valuator in any subject. They are likely to be smarter than you, in which case the penalty will be high.

15)       Try to mange two pens i.e. Blue and Black ink only in exam hall. Use black ink pen only for underling the key words of answers, for making columns and headings.

16)       While you write your exams, as a part of strategy, attempt derivates, portfolio and capital budgeting at the end, after you attempt all the other questions, as it may take huge time. Best suggestion, if you can attempt other questions, then you can leave one questions as a choice. Most students are not able to clear this paper as they spend too much time attending these questions and then accuse lack of time/ say that paper is long.

17) You are advised to practice such numerical questions which cover the technical points, formulas and adjustments of entire chapters.

18) Before answering any question you need to make a rough solution in your mind and then go accordingly. No need to make hurry in papers like SFM and costing as one mistake may spoil your entire efforts. In SFM you won’t get amendments very frequently, so no need to worry about amendments etc.

Your professional approach and qualitative effort is the key to pass CA examination. To be a successful chartered accountant you should be able to analyze and develop an understanding of topics and to be present in good manner.

Believe me, if you would study in this way, would be able to secure good marks in the subject.

I sincerely believe that the suggestions mentioned above would be of some help in SFM preparation.

Further, if you will need any kind of help, please ping me thru mail or facebook.


TO BE COUNTINUED.

(Author can be reached at caagrawalpankaj@gmail.com)

Thanks and Regards
CA Pankaj K Agrawal

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