How to prepare for Strategic Financial Management (SFM Paper)

How to prepare for Strategic Financial Management (SFM Paper)

The SFM paper at CA Final level includes detailed conceptual understanding of topics like derivatives (options, swap, futures and forwards) Portfolio Management, Corporate Valuation, Mergers and Acquisition, Fixed rate products (bonds), International Finance and other topics related to corporate financial management like dividend policy and capital budgeting.

Many think that preparation of SFM paper involves only practice of questions. However, much better strategy to prepare for SFM paper is to understand the theoretical and practical relevance for various SFM topics and then apply that understanding to solve practical problems.

Also a misconception related to SFM paper is that SFM involves lot of mugging up of formulas and concepts. However, the reality is the SFM paper is as logical as it can get. Every formula under any SFM topic has underlying logic and assumptions. The key to understand the formulas in SFM is to know how those assumptions impact the calculation and what will happen when those assumptions are tweaked.

SFM is one of the most practically applied topics in CA final course where one can observe how the topics covered under SFM curriculum are applied by companies in the real world. What will make SFM concepts more retainable is by understanding the applicability of the SFM topics in practice.

As with any examination-oriented preparation, a schedule for covering topics in SFM paper and sticking to that schedule helps a lot. The schedule for preparation of SFM paper should neither be over optimistic nor be pessimistic. The preparation time should be sufficient to cover up all the SFM topics in detail. SFM student should make sure that he gives enough time for review of all the topics before SFM final exam is due. Also, taking SFM mock tests could help in preparing and boosting the confidence level of SFM exam takers. As far as possible, SFM mock test should be taken in exam conditions and should be tried to be finished within the time limits allowed for the SFM final exam instituted by the ICAI.

The day before that final SFM exam, usually students find them short of time to review all the material. For reviewing all the material covered under SFM course one should prepare in advance and prepare short notes on formulas and tough concepts when they are preparing for the SFM exam. This would help them review the entire SFM course in most efficient manner. Don't forget to take appropriate amount of rest to relax you brain and body before appearing for the SFM final examination.

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