How to effectively prepare for SFM

SFM (Strategic Financial Management) is one of the important and core subject of CA final course. As a part of Group-I, it involves a lot of practical approach along with legacy theoretical concepts and considered as a scoring subject if prepared/attempted in a planned manner hence more focused by students among others. Here, I am sharing my views which can help you effectively prepare for SFM to secure maximum marks. No doubt it’s 100% practically used but need a lot of hard work, concept clarity, long calculations and market understanding which will lead you towards a high-profile Financial Planner or Strategic Financial Manager for a top company.

Introduction:

As the name suggest, SFM means managing finance which involves taking strategic decision from the senior management perspective and hence we should always keep this point in our mind to understand better. Some of the topics in this subject are very useful on regular basis even after clearing the exams while working in any Industry or your own. For e.g. managing own stock portfolio, buying mutual funds, deciding right valuation of any project, investing in a business, deciding on expansion of business etc.Hence, all these topics are covered in this subject because as a financial expert or professional you would be expected to have advance level knowledge of financial market, risk and mitigating strategy to guide top management to maximum their gains or reduce losses in any of the scenario involving financial risk. These decisions are non-regular in nature but deciding factor for the long-term growth path for any organisation.

Approach for effective study:

First of all, let me put out names of the chapters / topics covered as a part of curriculum so as to give you overall feel of the subject:

Chapter 1 Financial Policy and Corporate Strategy

Chapter 2 Project Planning and Capital Budgeting

Chapter 3 Leasing Decisions

Chapter 4 Dividend Decisions

Chapter 5 Indian Capital Market

Chapter 6 Security Analysis

Chapter 7 Portfolio Theory

Chapter 8 Financial Services in India

Chapter 9 Mutual Funds

Chapter 10 Money Market Operations

Chapter 11 Foreign Direct Investment (FDI), Foreign Institutional Investment (FII) And International Financial Management

Chapter 12 Foreign Exchange Exposure and Risk Management

Chapter 13 Mergers, Acquisitions & Restructuring

There are different approaches to cover each of the topic and the best thing here is that everything is based on practical. Though it is interesting and scoring subject but need deep concept clarity where sometimes students fail to achieve. Below mentioned are some of the important points among others to be noted for effective preparation:

• One Core Mantra which applies to all the chapters is that you should be very quick in decision making considering rapid changes because time has its own value (Time value of money) which is technically used here as a discounting factor. Reading the key message asked in the questions and level of expectations to be clearly visible by students so as to answer accordingly.

• Think as a Business entrepreneur in the risky market. Because mitigating risk is more important so as to find business opportunities. Everything comes with a risk (Risk = Return, or, No Risk = No Return). We have to understand the value of risk to be taken for all kind of decision making.

• So as to turn-on your brain into different angle of finance and train you for the maximum challenges, the Course covered in CA-final is very vast and difficult to prepare in a limited available time along with other subject but off-course not impossible. All you need to have is right guidance to give you right direction. Therefore, alongwith deep study we need to focus on Smart study with the help of experienced seniors or faculty in the subject matter.

• Use of available technology plays a very vital role to success in the current scenario. Students who are not living in the metro-cities have an option to go for Live online classes available now-a-days from the best faculty to guide them in the right direction which was not so easy in the past. So, instead of spending more time in traveling, students should think of time saving by video classes.

• Do not think of skipping any single topic as per ICAI guidelines because every single mark counts in the final result. Many-a-times, one small concept is linked with another important topic to solve tough questions. Therefore, you will face problems if you directly jump to hard topics or skip basic concepts which are very critical specifically in effectively prepare for SFM.

• As we all know, there is no formal or mandatory coaching available from institute to study all the subjects, therefore we need to have a helping hand where can approach for the solution any time where we get stuck-up. That is the reason you should always think of finding the right Guru for your subject matter as there are multiple ways to solve same question but what matter in CA-final is the efficiency and timeliness.

• In the SFM curriculum, most of the topics are related to capital market, portfolio management, mutual funds etc. and hence while studying you should have fair understanding of practical situation happening in the market. This will take you to the next level of knowledge where no need of memorising because everything will look like so obvious in the practical scenario.

• One Plus point about this subject is that usually there are no major changes or updates expected year over year (unlike other subjects where amendments happen every year), therefore you can Plan your study in advance to have sufficient time to cover minimum 3 revisions of full subject and then at the end go for:

Practice manuals   ?   Mock Test Papers   ?   Attempts previous question papers

But all these different sources make it very big task due to time constraint. Here I will suggest to go for best coaching available so that their study material will be very comprehensive and covering all these sources together at one place and no need to hustle. This will help you to give feel of the real exam and help you to make strategy for 3 hours during examination hall because we all know whatever hard work and smart work we are doing is going to pay us in those 3 magical hours of exam and always remember winners never do different things but, they do the same thing differently and this is the only thing which makes difference. This is the subject in  which you can not only score good marks but can get exemption also  provided you have to  study it in proper and right manner with best possible strategies. The more you practice the problems more are the chances of you to achieve success and believe me there is no special mantra for your success, what you need to follow is smart work, smart techniques. Always remember every student who opt for this profession is going to give their best in terms of hard work but one who do hard work along with smart work and saves wastage of time will definitely get success

Conclusion based on above:

In the end, my view is that, though effectively prepare for SFM is considered a tough subject which usually confuses students with so many formulas, different models, complicated calculations, etc., but can be made very easy with the right guidance and direction, practical approach and smart study. Sometimes, students just try to mug-up the formulas but it is very hard to memorize so large numbers therefore if you will understand the derivation of those complex formulas, it will be easy to attempt and you will be able to answer all questions asked in any complicated manner. Also, Practice makes a man perfect is a proverb that tells us the importance of continuous practice in any subject to learn anything. In any practical subject conceptual knowledge is a must and if u study from the right book you don’t need to do anything else because good author books cover almost 100% of ICAI material. SFM is a subject that can be managed smoothly but with proper planning and one strategy, I would like to recommend that a weighty topic should be followed by a little topic. There is no alternative to hard work and success. We must have to practice in the particular field on a regular basis in which we want to succeed. So, effectively prepare for SFM is very important.

Wish you all the Best and have a Good Luck.