How to Prepare for Financial Management & Economics for Finance

Apr 22 , 2021
Preparatory tips for FM & Eco

Like other CA subjects, Financial Management & Economics for Finance (FM & ECO) is a crucial yet tricky exam to crack. Crucial because it helps CA aspirants to understand the functions of financial managers and develop an acumen to grow competencies in financial decisions, investment decisions, dividend decisions, and working capital management. FM comprises the processes of planning and controlling subsystems of funds.

The exam is tricky as it requires a deep understanding of various practical concepts like Liquidity Ratio, Capital Structure Ratio, Capital Budgeting techniques, Risk Analysis, Fiscal Analysis, Monetary Policy, and several other topics.

Despite being a challenging exam, there is one thing that remains constant. It is our commitment to make your CA exam preparation easier and convenient. We, at OnePrep, are always looking for ways to make the preparation of complex CA subjects as simple as 1-2-3. In this blog, we will share some simple yet effective tips to crack the FM & ECO exam with ease.

Before we mention the tips, let us first help you go through the important topics of the subject. Focusing on them will give you an added advantage. You need to have a conceptual clarity of all the topics, be it theoretical or practical. This, accompanied by smart & hard work and a thorough understanding of concepts, will lead you on the path to success.

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Important topics for FM & ECO:

When preparing for Financial Management, you should consider focusing on the below-mentioned topics first:

  • Risk Analysis in Capital Budgeting
  • Financial Decisions – Leverages
  • Financial Analysis and Planning – Ratio Analysis
  • Cost of Capital

Similarly, for Economics for Finance, crucial topics are listed below:

  • Fiscal Policy
  • Monetary Policy
  • The Instrument of International Trade Policy

Now that you are aware of the crucial topics, here are a few important tips for acing the FM & ECO exam.

Simple and Effective Tips for Cracking FM & ECO Exam

  1. Make a list of all the formulas of each chapter. This will help you to memorize them and will boost your confidence level tremendously. Chapters such as Ratio Analysis, Capital structure, Cost of Capital, Dividend decisions, Determination of National Income, and others contain a significant amount of formulas. So it is better to write them down for a quick reference during your preparation.
  2. Bifurcate the subjects into easy and difficult chapters. Start your preparation with easy ones. Chapters like Ratio Analysis, Money Market, Public Finance, etc are comparatively easy. Also, make sure to give equal time to theory as it is high scoring and can also help you to get an exemption in the exam.
  3. Prepare notes of important chapters/topics in your own words. This will help you to effectively retain the information and revise the syllabus one night before the exams. Note-making is a very beneficial habit during exam preparation. Read this to know how: Importance of Note Making for CA Exams.
  4. Practice solving Mock test papers, Revision Test Papers, and Past Year Papers. This will help you immensely in your exam preparation and will boost your confidence significantly. Also Read: How Important are PYP, MTP & RTP for acing the CA exams.
  5. Last, but not least, is Revision. A prerequisite for scoring well in CA exams, revision should be done regularly as FM & ECO is a vast subject. However, it should be done systematically and not in a rush. Proper revision helps in memorizing information for a longer period.

Preparation for CA exams has never been so convenient and interesting as it is now with the OnePrep app. It has everything you need to ace CA Foundation, CA Intermediate, and CA Final on one single platform. 

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OnePrep wishes all the CA aspirants good luck for their preparation and exams.

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