8 Things you need to know while preparing for CA Intermediate Paper 8: Financial Management & Economics for Finance

8 things you need to know while preparing for Financial Management & Economics for Finance by Pinnacle Education

In this article, we are sharing the tips & tricks on Preparing for CA Intermediate Paper 8: Financial Management & Economics for Finance.

What is the structure of the paper?

The Financial Management (FM) and Economics Paper of CA Intermediate is divided into two main parts as the name suggests:

Section AFinancial Management (60 marks)  

  1. Question No. 1 is a compulsory question of 20 marks comprising 4 sub-questions of 5 marks each.
  2. Question Nos. 2 to 6 are of 10 marks. Students must attempt any 4 out of 5.
    1. Generally, questions 2 to 5 are practical questions of 10 marks. 
    2. Question 6 has theory questions.

Section BEconomics for Finance (40 marks)  

  1. There are 5 questions of 10 marks each from Question No. 7 to 11.
    1. Question No. 7 is compulsory. 
    2. Attempt any 3 out of 4 from Question Nos. 8 to 11. 
  2. Each 10 mark question is divided into 3-4 sub-questions ranging from 2-5 marks and comprising both theoretical and numerical questions.

Please Note: This is the trend that has been observed over the years. However, ICAI may change its paper pattern and question break-up any time.

What are the examiner’s expectations?

Financial Management 

  1. Emphasis is laid on correct application of the formula and related concepts to arrive at a definite answer or conclusion.
  2. Presentation of the answers (appropriate formats and working notes) will be given importance.
  3. The assumptions made are reasonable and in line with ICAI.

Economics for Finance 

  1. The examiner will assess ability of the student to interpret the question and analyse the facts as per the economic laws and principles.
  2. The conceptual clarity, analytical ability, in-depth knowledge, and intelligence exhibited by the examinee in logical presentation of answers will be given weightage instead of merely re-producing bookish knowledge.
  3. Numerical questions must be solved with proper steps and formula.

What should be the source of content?

          1. Content provided by your Coaching Provider along with your personal summary notes can be used as a base. However, ensure that it is comprehensive in its coverage by cross checking it with ICAI material
          2. Past Examination Papers, RTPs and MTPs.
          3. Referencer developed by ICAI for a summarised version of the notes.

Pro Tip: Stick to your base material as a reference. You must avoid changing the source of content closer to examination since that may lead to confusion in your study preparation.

What is the ideal learning methodology & time to be invested?

Reading Source Time Expected Outcome 
1st A detailed study of every concept involved 6 to 7 days 
  • Do a detailed study of the entire course content from your base material i.e. coaching providers notes and ICAI Material. 
  • Try solving as many number-driven questions for both FM and Economics as possible. 
  • Prepare a repository of questions for later revisions.  
  • Prepare a list of formulae for both FM and Economics. 
  • Make a quick reference list of the important points you must remember about every chapter in Economics to crack the theory questions.  
2nd A summarised version of the syllabus 3 to 4 days 
  • Cut down the list of questions to be practised in this revision. 
  • Finalise on your summarised notes for revision before exam day. 
3rd A quick revision to cut-down pre-exam study time 1 to 1.5 day 
  • Keep practising, go through all your summarised notes, and appear for a mock exam. 
4th The final revision one-day before the exam 1 to 1.5 day 
  • Trust your past preparations and instincts.  
  • Go through all earmarked sums and theory. 

What is the appropriate order in which the syllabus should be studied?

The overall portion can be divided into various buckets. Studying the entire syllabus as per these buckets and in the given sequence will be useful in building conceptual clarity.  

Despite the lengthy syllabus, avoid ad-hoc selective studies; follow a method of smart studying and be thoroughly clear with all the concepts. 

Visit the concept of ‘Remember, Revise, Recollect’ all throughout your study preparation. 

It is recommended to start with Financial Management and master the practical aspects, followed by numerical sums of Economics, then theoretical portion of FM and lastly study the theoretical aspects of Economics.

Note: Learn about the weightage distribution over various topics as per ICAI

Some trends and observations from the past year examination papers are as under: 

Income Tax Law

Name of Chapter Type of Question 
Ratio Analysis 

Cost of Capital 

Investment Decisions 

Risk in Capital Budgeting 

10 marks practical question 

Dividend Decisions 

Working Capital Management 

Management of Receivables 

5-10 marks practical question 
Cash Management 

Inventory Management 

Management of Payables 

Financing Working Capital 

Not very frequently asked. 

5 marks question can be expected.  

Scope and Objectives of Financial Management 

Types of Financing 

Theory questions asked aggregating to 10 marks (Question No. 6) 

Economics for Finance

Practical Unit on National Income (Unit 1) 
Practical + Theory Money Demand (Unit 3 – Pls check and specify) 

Money Supply 

Theory Unit on Public Finance (Unit 2) 

Monetary Policy 

Unit on International Trade (Unit 4) 

Disclaimer: The above analysis is based on examination papers of the last 3-4 years. The trend may change from time to time at discretion of ICAI.

How can I ace my exam writing skills?

        1. Use the 15 minutes reading time judiciously to strategize your way through the paper.
        2. It is very important to choose the right order for attempting the paper – ensure that you manage to attempt 40 marks in the first 1-1.25 hours.
        3. In case you cannot figure out the solution to a particular question within a designated time, make sure you move ahead to the next question.
        4. Ensure that all formats are properly made with headings and rupee symbol clearly written.
        5. Draw diagrams when answering questions of economics to impress the examiner and portray conceptual clarity.

Pro Tip: Start writing your exam with the question you are most comfortable with – it will help to boost your confidence for the paper.

How to prepare on the eve of the exam?

It is possible to revise the entire syllabus provided you have prepared summary notes and have a thorough grip on the content. 

Below is an illustrative list on how topics should be allocated between the three days you will have. You should prepare your own list based on the syllabus coverage and instructions by your coaching provider.

On day of EIS/SM Paper On Break day On day of Exam 
Go through summarised notes of Economics and FM theory. 
  • First, start with Economics and finish any pending topics as well as the numerical sums. 
  • Then, move on to FM.  
  1. Ratio Analysis 
  2. Cost of Capital and Capital Structure 
  3. Investment Decisions 
  4. Risk in Capital Budgeting 
  5. Leverages 
  6. Dividend Decisions 
  7. Working Capital 
  • Finish any pending chapters of FM. 
  1. Receivables and Payables Management 
  2. Cash Management  
  3. Inventory  
  • Go through the quick reference list of the important points you must remember about every chapter. 
  • Read earmarked sums and adjustments. 

What are the major challenges faced by students while attempting the Exam on the D Day & how must I prepare in advance to meet those challenges?

Challenges Solutions 
Inability to logically think and present an answer to a new question 
  • Solve a couple of questions in writing in every revision. 
  • Focus on the format of the various answers as per ICAI. 
  • Know when to elaborate through working notes to improve understand-ability. 
Scoring well in the theory based questions Use the right vocabulary – stick to the keywords used by ICAI 
Inability to manage time in the paper Unnecessary time should not be devoted on a particular question. In case you cannot figure out the solution to a particular question, designate some time to it at the end of the paper 
Inability to understand the content expectations of the examiner Read up the past RTPs and Exam Papers to gain an understanding of the answer format. Read up Summary of examiner’s comments from past attempts on the ICAI Website. 

For additional resources to assist you in your Inter CA preparation, reach out to us.

Good Luck!

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