CA Intermediate · May 2026 · Paper 6
CA Intermediate Financial Management and Strategic Management May 2026: paper analysis
Our own analysis of the official paper, as of 12 October 2026. The questions and answers belong to ICAI; read them on ICAI's website.
Chapter-wise marks
Where the marks were in this paper (out of 100; internal-choice alternatives not double counted).
What each question tested
In our words, by question number. Open the official paper for the full question.
| Q | Marks | Tests | Chapter |
|---|---|---|---|
| 1(a) | 5 | Deriving sales level from operating profit sensitivity, then operating, financial and combined leverage | Financing Decisions - Leverages |
| 1(b) | 5 | Post-tax cost of convertible debentures by present value method, choosing between conversion and redemption | Cost of Capital |
| 1(c) | 5 | Working back dividend, EPS, preference dividend rate and profit from dividend cover, yield and P/E ratios | Financial Analysis and Planning - Ratio Analysis |
| 2(a) | 7 | NPV, profitability index and equivalent annual benefit to choose between machines with unequal lives | Investment Decisions |
| 2(b) | 3 | Whether to take an early payment discount financed by overdraft, comparing after-tax costs | Management of Payables (Creditors) |
| 3(a) | 4 | Share value under Walter's model, retention ratio for a target price and optimum payout under Gordon's model | Dividend Decision |
| 3(b) | 6 | Cash cycle and minimum cash need, and evaluating a cash discount scheme to shorten collection | Management of Receivables |
| 4(a) | 4 | Assumptions underlying the Modigliani-Miller dividend irrelevance hypothesis | Dividend Decision |
| 4(b) | 4 | Post-shipment export finance and its main forms | Types of Financing |
| 4(c) | 2 | Profit maximisation versus wealth maximisation across objective, risk, time horizon and sustainability | Scope and Objectives of Financial Management |
| 4(c) OR | 2 | Junk bonds and why they offer high yields | Types of Financing |
| 5(a) | 5 | Identifying a three-phase change management model and explaining each phase | Strategy Implementation and Evaluation |
| 5(b) | 5 | Recognising a differentiation strategy and its disadvantages | Strategic Choices |
| 5(c) | 5 | Corporate strategy for a mature product through modernisation, reasons for it and suitability for a start-up | Strategic Choices |
| 6(a) | 5 | Product characteristics a business must manage to stay profitable under market demand and supply forces | Strategic Analysis: External Environment |
| 6(b) | 5 | Corporate level strategies: identifying stability, expansion, retrenchment and combination strategies from decisions | Strategic Choices |
| 7(a) | 5 | Reasons why companies globalise their operations | Strategic Analysis: External Environment |
| 7(b) | 5 | Meaning of channels, importance of channel analysis and types of channels | Strategic Analysis: External Environment |
| 8(a) | 5 | Ways an organisation can manage strategic uncertainty | Strategic Analysis: External Environment |
| 8(b) | 5 | Objective of strategic management and its limitations in turbulent environments | Introduction to Strategic Management |
| 8(b) OR | 5 | Proactive versus reactive strategies and why organisations need both | Introduction to Strategic Management |
What stood out
- Each section carried 15 MCQ marks and 35 descriptive marks; the FM MCQs centred on one capital-structure case on EPS and financing mix.
- FM descriptive questions were almost fully numerical, with leverage, cost of capital, ratios, capital budgeting and dividend models all tested.
- Working capital appeared through payables discount, cash cycle and receivables discount problems rather than a full working capital estimate.
- In SM, Strategic Choices led in both parts, with generic and corporate-level strategy questions built on short scenarios.
- SM theory leaned toward the external environment (globalisation, channels, uncertainty), so the analysis chapters deserve close reading.
Practise the chapters that carried the marks
Strategic Analysis: External Environment, Strategic Choices, Cost of Capital: study guides and practice questions in the CA Intermediate format.