F3 Self Study Guide

Management Accountants
Chartered Institute of
Self study guides Introduction i
Checklist O
Tips for success T
How to use the study planner ?
Study planner P
F3
F3 Overview of F3 F3
A. Formulation of financial strategy A
B. Financing and dividend decisions B
C. Corporate finance C
Revision R
D
STRATEGIC LEVEL | Financial Strategy

F3 Financial Strategy | Self-study guides
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This is your F3 self-study guide, it will help you plan and prepare
for your upcoming F3 assessment. Using this guide will give you: P
F3
1. A week-by-week plan covering the whole of the F3 syllabus
2. A useful study planner that you can personalise A
3. Tips from our subject experts to help you keep on track with your studies B
4. Links to a wealth of articles, guides and webinars to help you
C
understand the syllabus and get ready for your assessment
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F3 Financial Strategy | Getting started
Your checklist
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Before using this guide and starting your studies
P
there are a few things that you should consider:
F3
1. Decide on your study method. Find out more about your options and the courses,
resources and products available to you at www.cimaglobal.com/study-shop. A
2. Schedule your exam. Scheduling in advance and having a date to work towards B
can be very motivating, so dont delay!
3. Join the F3 subject group on CIMAconnect and get support and advice from C
fellow F3 students along with other dedicated study resources. D

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4. Keep a look out for our emails, giving you valuable information throughout
your study and preparation to sit F3.
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F3 Financial Strategy | Getting started
Tips from the experts

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1. Be realistic when creating your study plan and be protective of your study time.
2. Think about where, when and how you will study to get the most out of your study time. P
3. When you are studying take short breaks and add variety into your study sessions F3
take notes, read a study text chapter, attempt some practice questions, look at a relevant article
A
4. Look after yourself eat and sleep well so you can function at your best
5. Be honest about your strengths and weaknesses practicing exam questions will help B
highlight the syllabus areas that you need a better understanding of.
C
6. Always remember what youre working towards becoming a CGMA,
adding global power to your CV and showcasing your value around the world. D
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F3 Financial Strategy | How to use your study planner
Take the time to plan out your studies. Let us talk you through it
WEEK MONDAY TUESDAY WEDNESDAY THURSDAY FRIDAY SATURDAY SUNDAY TOTAL

AM PM AM PM AM PM AM PM AM PM AM PM AM PM
1. Calculate the number of weeks O
you have Intro. Intro 2hr
1 A. 5hrs A. 5hrs A. 4hrs
2. Consider time you want off, such as 2hr A. 14hrs P
evenings or weekends for social events
A. 14hrs
2 A. 4hrs A. 3hrs A. 4hrs A. 3hrs F3
3. Take note of our recommended hours
4. See the example here for guidance A. 14hrs A
3 A. 4hrs A. 3hrs A. 3hrs A. 4hrs
B. 10hrs B
4 B. 3hrs B. 3hrs B. 4hrs
C
B. 10hrs
D
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B. 10hrs
B. 10hrs
B. 10hrs
C. 10hrs
9 C. 4hrs C. 3hrs C. 3hrs
C. 17hrs
10 C. 4hrs C. 5hrs C. 4hrs C. 4hrs
C. 14hrs
11 C. 2hrs C. 2hrs C. 5hrs C. 5hrs
Revise
12 4hrs 3hrs 5hrs 3hrs
15hrs
Study period Revision Other commitments
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F3 Financial Strategy | Create your study planner
Here you can plan out your studies plan your daily hours and check off any completed sections.
WEEK MONDAY TUESDAY WEDNESDAY THURSDAY FRIDAY SATURDAY SUNDAY TOTAL

AM PM AM PM AM PM AM PM AM PM AM PM AM PM
O
1
P
2
F3
3
A
4
5 B
6 C
7 D
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10
11
12
13
14
15
16
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Create your own study planner using the editable table

above and check off the weeks on the left to keep on track. OR Print this page off and fill it in by hand!
5
F3 Overview
SESSION COMPONENT KAPLAN TEXT/

(DURATION) LEARNING OUTCOMES STUDY GUIDANCE/TIPS RESOURCES CIMASTUDY.COM
Week 1 Part 1 Introduction to F3 Familiarise yourself with the syllabus and what the exam Read the F3 syllabus O
is all about.
Read our F3 study and
Review the F1 and F2 syllabus if exemptions were exam guide P
2 received to ensure there are no knowledge gaps
HOURS
F3
A
Notes The session below is developed based on the CIMA Official Study Text and CIMAstudy.com.
You can use other text books or online study material according to your preference.
B
During each session, start with reading the text and underlining key words and phrases. You
may want to write your own set of revision cards and study notes as you are reading for more C
effective learning. These can be carried around for regular revision.
D
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Post session review and mind map
At the end of each week, dedicate some time to review what you have learnt.
Review the notes you have made and ensure your understanding.
Mind mapping is a useful tool to use for F3 as it helps you to summarise and link
different ideas and theories together.
Past exam questions

Many topics under the 2010 syllabus still remain relevant in the 2015 syllabus.
2010 past exam questions are still great learning resources. However, it should be
noted that some question styles are no longer examinable.
Read our Guide to F3 exam question practice
6
F3
F3 Checklist O
Study planner P
Overview of F3 F3
Revision D
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Syllabus topic A
FORMULATION OF
FINANCIAL STRATEGY
Syllabus weighting 25% Recommended study time 42 hours over 3 weeks
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F3 A. Formulation of financial strategy

Week 1 Part 2 A1(a) Advise on the overall 1. This covers a range of organisations e.g. private Integrated Reporting Kaplan: O
strategic financial companies, not for profit organisations, listed business models part 1 Chapter 1
and non-financial corporations all of these have different strategic P
Integrated Reporting
objectives of different objectives both financial and non financial. cimastudy.com unit:
7 types of entities.
business models part 2
HOURS
2. Candidates should be able to distinguish between Objective of entities F3
The importance of
those objectives and advise in the context of
Corporate Strategy in an
international operation. A
economic downturn
3. Try and research the strategic objectives of a
How UK companies B
large listed entity and compare them against a not
used business strategy
for profit organisation within the same industry,
to respond to an
such as health services. C
economic recession
D
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Practice questions
(taken from exam papers under the 2010 syllabus)
To access these questions join the F3 CIMAconnect group and search for the question in the F3 study resources area
Longer format questions Longer format questions continued
November 2010 Q1b(ii) March 2013 Q1a
March 2012 Q2a May 2013 Q1a
September 2012 Q2a November 2013 Q1b
Q2b(i)
Q2b(ii)
8

Week 1 Part 3 A1(b) Evaluate financial 1. Candidates should be able to demonstrate the ability Management Accounting Kaplan: O
objectives of to evaluate the financial objectives of an organisation. Practices of UK small and Chapter 1
for-profit entities. This will involve various financial calculations such as medium enterprises (SMEs) P
earnings, growth in dividend. cimastudy.com unit:
7
HOURS
2. You will also be required to assess the sensitivity of Objective of entities. F3
the attainment of these objectives in the given Forecast financial
context that may involve various financing and statements and A
investment decisions. investors ratio.
Financial risks. B
Methods of risk
management C
(currency risk)
D
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Week 2 Part 1 A1(c) Advise on the use 1. This covers the limitations of the financial statements Mitigating risk and Kaplan:
of sustainability and prepared in accordance with IAS. maximising performance Chapter 2
integrated reporting to using good corporate
2. Candidates should have a grasp on the emerging
inform stakeholders of governance cimastudy.com unit:
7 relevant information
issues such as GRIs sustainability reporting, the latest
HOURS
developments within the framework. Integrated Reporting Scope of external reporting
concerning the
sustainability Sustainability and
interaction of a 3. The tomorrows business world is about sustainability
integrated reporting
business with society candidates should reflect the knowledge and Accounting For
and the natural importance on the principle and scope of the social Natural Capital
environment. and environmental issues.
All sustainability &
Ethics reports
9

Week 2 Part 2 A2(a) Evaluate the 1. An entity has to meet its financing, investment and Kaplan: O
interrelationship dividend policy which are interlinked in a way that Chapter 3
between investment, effects the businesses growth and performance. P
financing and dividend cimastudy.com unit:
7 decisions for an
2. Candidates must demonstrate the skill and ability
HOURS
to understand the interrelationship the impact of Financial Management F3
incorporated entity. decision
each decision e.g. The dividends payment is highly
dependent on future cash flows. A
B
Practice questions
C
D
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Longer format questions
May 2011 Q2c
September 2011 Q1b(ii)
November 2011 Q1a
November 2012 Q2a
March 2013 Q1b
November 2013 Q2b
Q2c
March 2014 Q3b(i)
10

Week 3 Part 1 A2(b) Advise on the 1. What are the key external constraints in devising a Financial strategy Kaplan: O
development of financial strategy on the organisation? The local and performance analysis Chapter 3
financial strategy for international both. P
Webcast Performance
an entity taking into cimastudy.com unit:
7 account taxation
2. Organisations are bound to comply with the regulatory analysis
HOURS
requirements whilst devising a financial strategy. Constraints on F3
and other external financial strategy
influences. 3. The assessment of stake holders such as lenders and
share holders. A
4. Candidates would be carrying out the financial and

B
performance analysis to cover the requirements of this
learning outcome.
C
D
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Practice questions
Longer format questions Longer format questions continued
May 2010 Q3b September 2012 Q4a(i)
March 2011 Q3b November 2012 Q2b(i)
May 2011 Q1c May 2013 Q1a
September 2011 Q1b(ii) September 2013 Q4b
November 2011 Q1a November 2013 Q4a(i)
March 2012 Q2b March 2014 Q3b(ii)
11

Week 3 Part 2 A2(c) Evaluate the impact 1. Principle understanding of IAS 39 and IFRS 7. Kaplan: O
of the adoption of Chapter 4
2. The Impact of hedge accounting on the financial
hedge accounting P
statements in accordance with the above mentioned
and disclosure of cimastudy.com unit:
7 financial risk on
accounting standards.
HOURS Financial instruments F3
financial statements Recognition and
and stakeholder measurement
assessment. A
Practice questions C
D
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September 2011 Q2a
November 2011 Q4a
May 2012 Q4b
September 2012 Q4b
September 2013 Q4b
March 2014 Q4b
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WELL DONE! F3
A
You have now covered Section A of the F3 syllabus
B
and are ready to move onto Section B.
C
D
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MARK OFF YOUR PROGRESS GO TO SECTION B
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F3
F3 Checklist O
Study planner P
Overview of F3 F3
Revision D
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Syllabus topic B
FINANCING AND
DIVIDEND DECISIONS
14
F3 B. Financing and dividend decisions

Week 4 B1(a) Evaluate the impact 1. Understanding of the capital structure theories. How Weighted average cost of Kaplan: O
of changes in capital the changes in the capital structure impacts the capital (WACC) Chapter 7
structure for an entities. (M&M) P
incorporated entity on cimastudy.com unit:
10 shareholders and other
2. Calculation of the WACC.
HOURS Capital structure F3
stakeholders. 3. What are the tax implications of different structure
and how do they effect the financial performance of
an entity. A
Practice questions C
D
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Longer format questions Longer format questions continued Longer format questions continued
May 2010 Q2(iii) November 2011 Q1b(i) March 2013 Q2a
Q4c March 2012 Q1a Q2b
March 2011 Q3a Q3a(iii) May 2013 Q3a
May 2011 Q4a May 2012 Q2a(ii) March 2014 Q2a
September 2011 Q3a(i) Q2b
Q3a(ii)
15

Week 5 B1(b) Evaluate and compare 1. Understand the criteria for selecting the appropriate The lease V buy decision Kaplan: O
alternative methods debt instrument in the lights of the given scenario. Chapter 6
The lease V buy decision
of raising long-term P
2. How each of these will impact the financial Q&A
debt finance. cimastudy.com unit:
10 performance of the company.
Bond yields and
HOURS Debt finance F3
3. You must have the principle understanding of calculations
Leasing and hire purchase
advantages and disadvantages for each of the debt
instruments and may also be require demonstrating Methods of risk A
this through calculations. management (interest
rate risk) B
4. Demonstrate the understanding around the process of
raising debt finance and the associated stake holders.
C
D
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Practice questions
March 2014 Q4
September 2012 Q3a
Q3b
16

Week 6 B1(c) Evaluate and compare 1. Evaluation of the different floatation methods. Kaplan: O
alternative methods of Chapter 5
2. Calculation of the impact of rights issue and the
raising equity finance. P
impact on share holders wealth.
cimastudy.com unit:
10
HOURS Equity finance F3
A
Practice questions
B
To access these questions join the F3 CIMAconnect group and search for the question in the F3 study resources area C
Longer format questions D

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September 2013 Q1a
November 2012 Q1a
Q1b(i)
Q1b(ii)
17

Week 7 B2(a) Evaluate alternatives 1. The impact of scrip dividend and share repurchase Kaplan: O
to cash dividends program. Chapter 8
and their impact on P
shareholder wealth and cimastudy.com unit:
10 entity performance
HOURS Financial management F3
measures. decisions
A
Week 8 B2(b) Recommend 1. MM dividend irrelevancy. Kaplan: B

appropriate dividend Chapter 8
2. The evaluation of companys cash needs and share
policies, including C
holders interest.
consideration cimastudy.com unit:
10 of shareholder D
R
HOURS Financial management
expectations and decisions
the cash needs
of the entity.
18
WELL DONE! F3
A
You have now covered Section B of the F3 syllabus
B
and are ready to move onto Section C.
C
D
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MARK OFF YOUR PROGRESS GO TO SECTION C
19
F3
F3 Checklist O
Study planner P
Overview of F3 F3
Revision D
R
Syllabus topic C
CORPORATE
FINANCE
20
F3 C. Corporate finance

Week 9 A1(a) Evaluate the financial 1. Why companies are interested in mergers Kaplan: O
and strategic and acquisitions. Chapter 9
implications of P
2. What are the key benefits, challenges associated
proposals for an cimastudy.com unit:
10 acquisition, merger or
with these?
HOURS Mergers and acquisitions F3
divestment, including 3. The process of MBOs and understanding the
taxation implications. roles of private equity, venture capitalist and
competition authorities. A
4. Some of the mergers and acquisitions might not

B
be in the favour of customers and may create
monopoly for the users.
C
D
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Practice questions
(taken from exam papers under the F2 2010 syllabus)
Longer format questions Longer format questions continued Longer format questions continued
May 2010 Q3a September 2011 Q2a May 2012 Q1b(ii)
Q3c Q4a November 2012 Q1c
November 2010 Q1b(ii) Q4b March 2013 Q1d
May 2011 Q4b November 2011 Q1c May 2013 Q4b
March 2012 Q1d March 2014 Q1c
Q1c
21

Week 10 Part 1 A2(a) Calculate the value 1. Understanding of the different asset valuation models. Shareholder value creation Kaplan: O
of a whole entity Chapter 10
2. Candidates should demonstrate the ability to calculate Financial strategy valuing
(quoted or unquoted), P
entitys value using different models such as DCF, DVM, intangible assets
a subsidiary entity or cimastudy.com unit:
15 division using a range
share price and earning valuation model.
Financial strategy
HOURS Financial markets and F3
of methods including 3. You will be required to use WACC, CAPM, EMH for company valuations market efficiency
taxation. your calculations.
Adjusted Present Value in Capital asset pricing model A
4. The understanding of systematic and un-systematic financing decisions Business valuations
risk and the mitigation.
B
5. From the given information candidates should extract
the data which is applicable and relevant for each of C
the above mentioned calculations.
D
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Practice questions
(taken from exam papers under the F2 2010 syllabus)
November 2011 Q1b(i)
March 2012 Q1b(i)
November 2012 Q1b(i)
March 2013 Q4a
Q4b
March 2014 Q1a(i)
22

Week 10 Part 2 A2(b) Evaluate the validity 1. Candidates should be aware of the general advantages Financial strategy valuing Kaplan: O
of the valuation and disadvantages or limitations for intangible assets Chapter 10
methods used and each model. P
Financial strategy
the results obtained cimastudy.com unit:
2 in the context of a
2. Candidates should develop commercial judgement company valuations
HOURS
ability as to which model reflects the best value Business valuations F3
given scenario.
for the company.
3. Candidates should also be able to exercise the A
judgement around the offer prices.
B
4. Example: Asset valuation model will never be a
good idea to estimate the worth of a Law firm.
C
D
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Practice questions
September 2011 Q4
November 2011 Q1b(ii)
March 2012 Q1b(ii)
November 2012 Q1b(ii)
March 2013 Q4c
23

Week 11 Part 1 A3(a) Evaluate alternative 1. Develop an understanding of different form of Kaplan: O
pricing structures and considerations and how one is more advantageous Chapter 11
bid process including over the other in the given scenario. P
taxation implications. cimastudy.com unit:
7 2. Bid negotiations.
HOURS Mergers and acquisitions F3
3. The impact of considerations on each share holders
wealth and taxes.
A
B
Week 11 Part 2 A3(b) Evaluate 1. The issues relating to cultures and management The role of management Kaplan:
post-transaction styles as a result of merger and acquisition. accountants in mergers and Chapter 11 C
issues. acquisitions
2. Integration of systems, Management and exit
cimastudy.com unit: D
R
7 strategies.
HOURS Exit strategies
24
WELL DONE! F3
A
You have now covered Section C of the F3 syllabus
B
and are ready to move onto revision.
C
D
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MARK OFF YOUR PROGRESS GO TO REVISION SECTION
25
F3
F3 Checklist O
Study planner P
Overview of F3 F3
Revision R
REVISION
26
F3 Revision

Week 12 Practice questions under When practicing, you should try and time A guide to time management in the objective O
exam conditions. Review yourself to exam conditions, as a guide use test exams
your answers and refresh 1.5 minutes per question. If possible, you P
12 Video time management and exam technique in
your memory on topics should also aim to have 5-10 mins at the
HOURS the objective test exams
that you are unsure. end of the test to review your answers.
F3
Student webinar F3 exam techniques
Student webcast how to sit the objective test A
Other study resources

D
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Kaplan official publisher of CIMA study materials
Connected Student e-magazine
Financial Management magazine
Find other resources and connect to other students on CIMAconnect
Please note that the session duration time given for each area is a rough guide based on % of syllabus weightings. Research has shown that students who study 15 hours per week are more likely
to pass. These timings must be taken into account with other personal commitments such as work, family time, recreation etc. Obviously the more hours students can dedicate to studying the
higher their chance of success. Please use this as guidance rather than as an exact science of how to study, and please feel free to change it to suit your requirements.
27
F3 Revision
WELL DONE! F3
A
You have now covered the F3 self-study guide.
B
If you still have time before your exam why not
go back over subject areas you are less confident in? C
D
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O P F3 A B C R
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F3
D
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The Helicon, One South Place
London, EC2M 2RB
United Kingdom
cima.contact@cimaglobal.com
Tel: +44 (0)20 7663 5441
2016, The Chartered Institute of

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Management Accountants

Self study guides Introduction i

Tips for success T

How to use the study planner ?

A. Formulation of financial strategy A

B. Financing and dividend decisions B

STRATEGIC LEVEL | Financial Strategy

fellow F3 students along with other dedicated study resources. D

Tips from the experts

WEEK MONDAY TUESDAY WEDNESDAY THURSDAY FRIDAY SATURDAY SUNDAY TOTAL

Study period Revision Other commitments

WEEK MONDAY TUESDAY WEDNESDAY THURSDAY FRIDAY SATURDAY SUNDAY TOTAL

Create your own study planner using the editable table

SESSION COMPONENT KAPLAN TEXT/

Past exam questions

A. Formulation of financial strategy A

B. Financing and dividend decisions B

SESSION COMPONENT KAPLAN TEXT/

Longer format questions Longer format questions continued

November 2010 Q1b(ii) March 2013 Q1a

March 2012 Q2a May 2013 Q1a

September 2012 Q2a November 2013 Q1b

SESSION COMPONENT KAPLAN TEXT/

SESSION COMPONENT KAPLAN TEXT/

Longer format questions

May 2011 Q2c

September 2011 Q1b(ii)

November 2011 Q1a

November 2012 Q2a

March 2013 Q1b

November 2013 Q2b

March 2014 Q3b(i)

SESSION COMPONENT KAPLAN TEXT/

4. Candidates would be carrying out the financial and

Longer format questions Longer format questions continued

May 2010 Q3b September 2012 Q4a(i)

March 2011 Q3b November 2012 Q2b(i)

May 2011 Q1c May 2013 Q1a

September 2011 Q1b(ii) September 2013 Q4b

November 2011 Q1a November 2013 Q4a(i)

March 2012 Q2b March 2014 Q3b(ii)

SESSION COMPONENT KAPLAN TEXT/

Longer format questions

September 2011 Q2a

November 2011 Q4a

May 2012 Q4b

September 2012 Q4b

September 2013 Q4b

March 2014 Q4b

A. Formulation of financial strategy A

B. Financing and dividend decisions B

SESSION COMPONENT KAPLAN TEXT/

May 2010 Q2(iii) November 2011 Q1b(i) March 2013 Q2a

Q4c March 2012 Q1a Q2b

March 2011 Q3a Q3a(iii) May 2013 Q3a

May 2011 Q4a May 2012 Q2a(ii) March 2014 Q2a

September 2011 Q3a(i) Q2b

SESSION COMPONENT KAPLAN TEXT/

Longer format questions

September 2012 Q3a

SESSION COMPONENT KAPLAN TEXT/

Longer format questions D

September 2013 Q1a

November 2012 Q1a

B. Financing and dividend decisions B

B. Financing and dividend decisions B

Longer format questions Longer format questions continued

Longer format questions Longer format questions continued

B. Financing and dividend decisions B

Week 8 B2(b) Recommend 1. MM dividend irrelevancy. Kaplan: B

B. Financing and dividend decisions B

B. Financing and dividend decisions B