Preparing for SFM final
September 1, 2020

How does one prepare for SFM CA Final by Self-Study ?

Strategic Financial Management (SFM CA Final) aims to assist the students to develop a thorough understanding of the concepts and theories underlying financial management in a systematic way.  The institute (ICAI) tests students' ability to comprehend and solve problems based on complex concepts often in connection to inter-related topics. Further, it is expected that the students develop problem solving skills related to the topics for decision making in their profession. Because of this change in emphasis, the treatment of subject has changed from descriptive to analytical.

CA Final SFM combines theory with practical applications. The subject discusses the theories, concepts, assumptions and mechanics underlying financial decisions like investment, financing, and dividend. It also discusses sources and instruments of short term and long term finances, mergers & acquisitions, international financial management and derivative products. The subject helps students to relate theories and concepts to practice.

The subject contains a comprehensive treatment of topics on valuation of bonds and equity, Risk and Return, Derivative products, Merger and Acquisitions, Foreign Exchange, Value at risk and Shareholder’s value.

Given the busy schedule of the CA students it is important that they have a structured approach towards the preparation of CA Final SFM exams. For the benefit of CA Final Students we have listed down some must do’s and don'ts as well as best practices.   

  • Good Starting Point is ICAI material

The institute provides very good quality study material and one should not ignore the same. It is often observed that the students spend a lot of time, energy and effort looking for sfm notes, sfm downloads etc. however, ICAI material (CA final Practice Manual) for SFM CA Final is comprehensive as well as exhaustive. SFM Syllabus and official curriculum is a good place to start along with the SFM Practice Manual provided by the institute. 

As the subject is very wide in nature below are the benefits of practice manual:

  • CA Final Practice Manual is a good way of benchmarking one self and one’s preparation.

  • SFM Practice Manual helps one get a flair of a variety of questions that the institute can come up with.

  • It’s a good reality check to understand the level and complexity of questions

  • And of course, it is meant for practice.

So, Keep practising in order to make yourself perfectly prepared for the subject.

  • Develop Conceptual Clarity on each topic

The institute tests the students ability to handle complex concepts bound within a limited time period of the exam hours. In order to handle the subject it is imperative that the students have excellent conceptual clarity and rigorous practice in order to have good command on the subject.  It requires one to have a good balance between knowledge of the topics as well as mechanical handling of the subject from exam point of view. 

Basically, one does not have time to think in the examination hall, one just needs to scribble based on mechanical practice one has learned during the preparation. If one understands the concepts well, but is not able to solve the sums and similarly we can solve the sums but lack concepts, both situations can be dangerous. Hence a perfect balance would be expected while preparing for the paper. Further, It also makes sense to develop a good set of shortcuts, rules of thumb and tricks to cross check calculations,  answers etc. The bottom line is “ In exams, don’t think, just flow”. 

  • Practice questions involving multiple topics & Concepts

This is one of the most important and often ignored aspects of your preparation for CA Final Exams. SFM has a lot of mathematical and Statistical applications and hence writing practice of a variety of sums on a regular basis would lead to greater control and understanding of the subject.

Practice is so important that while you read the question one should be able to copy the relevant data onto the answer sheet. 

  • Importance of Concepts and SFM theory

In the current format of the CA Final SFM exams anywhere from 30 - 35 % of the paper is based on compulsory theory questions. Students should have a differentiated strategy to deal with this portion so as to secure good marks in this section. Students must prepare SFM theory portions properly as it is compulsory in the new curriculum. Theory answers should be very well articulated and must contain a definition along with detailed explanation. One should try to highlight the bullet points and underline the keywords related to the topic, remember, good content leads to better score.  ICAI study material is a good starting point to prepare for theory in a structured manner. SFM theory, if prepared well, can get one  very close to the passing marks required for this exam. 

  • Remember to revise before the exams.

As the portion is exhaustive and given the fact that CA Final Students have to write exams back to back it becomes important for one to spend a reasonable amount of time revising the subject before the exams. Choose revision lectures of a faculty you are familiar with and one is comfortable with his / her nomenclature. As the topics are complex and there are a lot of applications and formulas to remember it helps immensely to do revision to maximise the score.