A Breakdown of the CIMA F3 Syllabus

The CIMA F3 syllabus focuses on the formulation and implementation of financial strategy to support the overall strategy of an organisation.

Building on what you have learnt from F1 and F2, you’ll discover how to evaluate the financing requirements of organisations as well as the benefits and drawbacks of alternative sources of finance to meet these requirements.

In addition, you’ll also develop the competencies required to value investment opportunities including the valuation of corporate entities for mergers, acquisitions and divestments

Summary of the CIMA F3 Syllabus:

The percentages show the relative weight range given to each section in the exam.

  1. Section A: Formulation of financial strategy – 25%
  2. Section B: Financing and dividend decisions – 35%
  3. Section C: Corporate Finance – 40%

Learning Outcomes and Syllabus Content:

ALL learning outcomes will be tested in this exam and so it is important you cover each learning outcome below for each section of the exam.

I recommend you look to truly understand a learning outcome through reading, note taking, regular question practice and review, before moving onto the next.

If you can master all the learning outcomes, you will pass!

Section A: Formulation of Financial Strategy – 25%

Learning outcomes:

  • A1(a) Advise on the overall strategic financial and non-financial objectives of different types of entities
  • A1(b) Evaluate financial objectives of for-profit entities
  • A1(c) Advise on the use of sustainability and integrated reporting to inform stakeholders of relevant information concerning the interaction of a business with society and the natural environment
  • A2(a) Evaluate the interrelationship between investment, financing and dividend decisions for an incorporated entity
  • A2(b) Advise on the development of financial strategy for an entity taking into account taxation and other external influences
  • A2 (c) Evaluate the impact of the adoption of hedge accounting and disclosure of financial risk on financial statements and stakeholder assessment.

Key topics/theories:

  • Integrated Reporting including strategic objectives and corporate strategy
  • Limitations of the financial statements prepared in accordance with IAS
  • GRI`s sustainability reporting and the latest developments within the framework.
  • Principle and scope of social and environmental issues.
  • Financing, investment and dividend policy
  • Performance (ratio) analysis
  • Principle understanding of IAS 39 and IFRS 7.
  • The Impact of hedge accounting on the financial statements

Section B: Financing and Dividend Decisions – 35%

Learning outcomes:

  • B1(a) Evaluate the impact of changes in capital structure for an incorporated entity on shareholders and other stakeholders
  • B1(b) Evaluate and compare alternative methods of raising long-term debt finance
  • B1(c) Evaluate and compare alternative methods of raising equity finance
  • B2(a) Evaluate alternatives to cash dividends and their impact on shareholder wealth and entity performance measures
  • B2(b) Recommend appropriate dividend policies, including consideration of shareholder expectations and the cash needs of the entity.

Key topics/theories:

  • Capital structure theories including M&M
  • Calculating WACC
  • Tax implications of different capital structures
  • Debt finance including advantages and disadvantages for each of the debt instruments
  • The process of raising debt finance
  • Lease versus buy decisions
  • The different floatation methods
  • Calculating the impact of rights issues
  • The impact of scrip dividend and share repurchase programs
  • Dividend policy including M&M theory

Section C: Corporate Finance – 40%

Learning outcomes:

  • C1(a) Evaluate the financial and strategic implications of proposals for an acquisition, merger or divestment, including taxation implications
  • C2 (a) Calculate the value of a whole entity (quoted or unquoted), a subsidiary entity or division using a range of methods including taxation
  • C2 (b) Evaluate the validity of the valuation methods used and the results obtained in the context of a given scenario
  • C3 (a) Evaluate alternative pricing structures and bid process including taxation implications
  • C3 (b) Evaluate post-transaction issues

Key topics/theories:

  • Risks and benefits of mergers and acquisitions
  • The process involved with MBO’s
  • The roles of private equity, venture capitalist and competition authorities
  • Asset valuation models
  • Calculating an entity’s value using different models such as DCF, DVM, share price and earning valuation model (including use of WACC, CAPM, EMH)
  • Understanding of systematic and un-systematic risk and how to mitigate
  • Advantages and disadvantages or limitations of each valuation model
  • Commercial judgement of offer prices
  • Different forms of consideration and bid negotiations
  • Impact on cultures and management styles as a result of merger and acquisition as well as Integration of systems, management and exit strategies

Back to CIMA Strategic Level Home

Share Button