CA Intermediate · Paper 6
CA Intermediate Financial Management and Strategic Management (Paper 6)
Paper 6 has two sections of 50 marks each: Financial Management (formula-based numericals and theory) and Strategic Management (theory). You solve it by writing formula, working and interpretation in FM, and structured, point-wise answers with correct terms in SM. Thirty of the 100 marks are MCQs.
Paper 6 combines two very different subjects. Section A, Financial Management tests whether you can apply formulas to numbers and then say what the result means. Ratios, cost of capital, leverages, capital structure, investment appraisal, dividend, and working capital all follow this pattern. Section B, Strategic Management is theory. It tests whether you know the models and terms and can apply them to a short situation.
The paper is 100 marks in 3 hours. Thirty marks are MCQs, which are compulsory, carry 1 or 2 marks, and have no negative marking. The other 70 marks are written answers. You write the two sections in two separate answer books, but the paper is treated as one for passing and exemptions. To pass a group, you need at least 40% in each paper of the group and 50% in the aggregate of that group, at one sitting. If you take both groups together, the 50% aggregate can be in each group or in all papers of both groups taken together.
Students usually find FM scoring if they practise numericals regularly, because correct steps earn marks even when the final answer is off. They usually find SM tricky because the content looks easy, so they under-prepare and then write vague answers. The students who score well treat SM as seriously as FM. They learn definitions and models precisely and practise writing answers in a fixed structure.
Financial Management and Strategic Management: chapters and topics
Financial Management
Scope and Objectives of Financial Management
Financial Management
Types of Financing
- Sources of Finance: Long-term, Medium-term, Short-term
- Long-term Sources: Equity, Preference Shares and Debentures
- Venture Capital, Private Equity and Start-up Financing
- Lease Financing and Hire Purchase
- Short-term Finance: Trade Credit, Bank Finance and Commercial Paper
- Innovative and International Sources of Finance
Financial Management
Financial Analysis and Planning - Ratio Analysis
Financial Management
Cost of Capital
Financial Management
Financing Decisions - Capital Structure
Financial Management
Financing Decisions - Leverages
Financial Management
Investment Decisions
- Capital Budgeting: Meaning and Process
- Estimating Cash Flows for Projects
- Payback Period and Discounted Payback
- Accounting Rate of Return (ARR)
- Net Present Value (NPV) and Profitability Index
- Internal Rate of Return (IRR) and MIRR
- Capital Rationing and Unequal Project Lives
- Risk Analysis in Capital Budgeting
Financial Management
Dividend Decision
Financial Management
Introduction to Working Capital Management
Financial Management
Treasury and Cash Management
Financial Management
Management of Inventory
Financial Management
Management of Receivables
Financial Management
Management of Payables (Creditors)
Financial Management
Financing of Working Capital
Strategic Management
Introduction to Strategic Management
Strategic Management
Strategic Analysis: External Environment
Strategic Management
Strategic Analysis: Internal Environment
Strategic Management
Strategic Choices
Strategic Management
Strategy Implementation and Evaluation
How to prepare Financial Management and Strategic Management
Split your time between the two sections, but start with FM, because numericals need repeated practice over weeks. SM can then be revised in compact cycles. Plan for at least three full revisions of the whole paper.
- Start with the base of FM: Scope and Objectives, Types of Financing, and Ratio Analysis. Learn every ratio formula and what a high or low value signals. Ratio questions appear in many forms, so interpretation matters as much as calculation.
- Move to the core numerical chapters: Cost of Capital, Capital Structure, Leverages, and Investment Decisions. Write each formula on one sheet. Solve at least five questions per chapter yourself before looking at the solution. For investment decisions, practise NPV, IRR, payback, and profitability index until the steps are automatic.
- Study the Dividend Decision and then the working capital chapters together: Introduction to Working Capital, Treasury and Cash Management, Inventory, Receivables, Payables, and Financing of Working Capital. Practise the operating cycle and working capital estimation, since a full question often combines several of these.
- Build SM notes chapter by chapter: Introduction, External Environment, Internal Environment, Strategic Choices, and Implementation and Evaluation. For each model or framework, note its name, purpose, components, and one short example. Use a one-page summary per chapter so you can revise quickly on your phone.
- Practise SM answers in a fixed format: a one-line definition, then three to five points with a brief explanation each, then a short application to the case given. Write at least two answers per chapter under a time limit.
- Solve MCQs weekly. For FM, calculate quickly and check the unit and the options. For SM, eliminate options that mismatch the model or term. Since there is no negative marking, never leave an MCQ blank.
- In the last four weeks, attempt full three-hour papers in exam conditions. Do one section per sitting at first, then both together. Review every mistake and sort it into formula error, calculation error, or theory gap, then fix that type before the next paper.
- In the final week, revise only your formula sheet, your SM one-page summaries, and your error log. Do not start new topics.
Time management in the exam
- Spend the first few minutes scanning the paper. Mark the questions you are sure of, and start with those to build confidence and bank marks.
- Time is roughly proportional to marks. For 100 marks in 180 minutes, that is under two minutes per mark. Give MCQs a fixed block, and do not let any one MCQ eat into written-answer time.
- Attempt the MCQs in one pass. Answer the sure ones, mark the calculation-heavy ones, and return to them. Fill in every option before time ends because wrong answers are not penalised.
- In FM numericals, do not stall on a step you cannot recall. Write the formula, state your assumption, move on, and come back. Step marks come from the working you show.
- Keep SM answers short and structured. Long paragraphs waste time and hide the points the examiner is looking for. Aim for clear points that match the marks.
- Reserve the last 10 to 15 minutes to check units, signs, and that each question is numbered correctly in the right answer book for the section.
Mistakes that cost marks in Financial Management and Strategic Management
Treating SM as a light subject and reading it only once
Fix: Give SM a fixed share of every week. Make one-page summaries and practise writing answers, not just reading them.
Writing only the final number in FM numericals
Fix: Write the formula, then the substitution, then the result, then one line of interpretation. This earns step marks even if a later figure is wrong.
Memorising formulas without knowing when to use them
Fix: For each formula note what it measures and what data it needs. Practise choosing the right formula from a question before solving it.
Giving ratios without interpretation
Fix: After each ratio, write one sentence stating whether it is high or low relative to the benchmark and what that means for the firm.
Writing generic SM answers that ignore the case
Fix: Use the facts in the question. Name the model, state the point, then tie it to the business described in one sentence.
Skipping MCQ practice or leaving MCQs blank
Fix: Practise timed MCQs weekly for both sections, and always mark an answer for every MCQ.
Financial Management and Strategic Management: frequently asked questions
How many marks is the FM and SM paper and how is it split?
Paper 6 is 100 marks, with Section A Financial Management at 50 marks and Section B Strategic Management at 50 marks. Across the paper, 30 marks are MCQs and 70 marks are written answers. The exam lasts 3 hours.
Do I need to pass each section separately?
No. The two sections are answered in separate answer books, but Paper 6 is treated as a single paper for passing, exemptions, and certified copies. To pass the group, you need at least 40% in each paper of the group, including Paper 6 as a whole, and 50% in the aggregate of the group at one sitting. If you take both groups together, the 50% aggregate can be in each group or in all papers of both groups taken together.
Is there negative marking in the MCQs?
No, there is no negative marking for wrong MCQ answers. MCQs are compulsory and carry 1 or 2 marks each. You should attempt every one and not leave any blank.
Which section should I study first?
Start with Financial Management, since numericals need repeated practice over several weeks. Begin Strategic Management notes alongside it in short sessions, so both sections get enough revision cycles before the exam.
How do I score well in Strategic Management answers?
Use a fixed structure: a short definition, clear points with brief explanations, and a link to the case in the question. Use the correct model names and terms, and keep each answer matched to its marks.