CFA Course stands for Chartered Financial Analyst. The course focuses on Financial Analysis of the Companies to determine whether the company under evaluation is good or bad. If it is good – we will advise our clients to Buy its shares. If it is bad – we will advise our clients to Sell its shares. Although financial analysis lies at heart of CFA Course, that’s not all it has. It also covers various other aspects of Finance like: 1. Valuation of shares (at price of 180 Rs, shall I buy Yes Bank or shall I avoid it) 2. Valuation of Fixed Income (Shall I buy TJSB Bank FD offering 8% or SBI FD offering 7%) 3. Corporate Finance (NPV / IRR / Payback period analysis / WACC) 4. Portfolio Management (Why should I not put all my money in one share / Benefits of diversification)

Please understand that – Field of Commerce consists of 3 basic things:

1. Making the Financial Reports
2. Detection of any errors (intentional/unintentional)
3. Analyzing the Financial Reports

CA Course focuses on how to make the Financial Reports of a company which is called as Accounting. CA course also focuses on how to verify the accuracy of Financial Reports of a company which is called Auditing& CFA course focuses on analyzing the Financial Reports of the company to come to a conclusion – whether the company is good or bad.

CA course covers the following aspects:

1. Accounts
2. Tax
3. Audit
4. Law
5. IT
6. Finance

To pass CA course, being “Good in Finance” is just not good. You have to be good in Audit / Tax / Law / IT. You need to clear every subject to pass CA Course (even though you may not have an interest in it)

To pass CA course, being “Good in Finance” is just not good. You have to be good in Audit / Tax / Law / IT. You need to clear every subject to pass CA Course (even though you may not have an interest in it)

CFA focuses exclusively on Finance and its all aspects like:

1. Financial Report Analysis
2. Equity Investment Analysis
3. Bond Analysis
4. Futures & Options
5. Commodities Analysis
6. Corporate Finance
7. Portfolio Management

So, liking and hard core interest in finance is the key to succeed the CFA Examinations. To see if you have liking in Finance field – you can take our – Level 0 Test of Finance

Second difference between CA Course & CFA Course:

CA Course is huge in volume. So is CFA Course. However, the major difference between these 2 exams is about the paper pattern.

CA course has subjective questions which tests your byhearting power of brain whereas CFA course having objective questions tests your understanding skills. Let’s see an example.

CA exam will ask you question like – “Explain Expansionary Fiscal Policy” (10 Marks) CFA exam will ask you question on the same concept in objective format like — In case India is undergoing recession, Government would follow which Fiscal policy:

1. Expansionary Fiscal policy
2. Restrictive Fiscal Policy
3. Neutral Fiscal policy

It means that you have to understand the concept of fiscal policy in CFA exam. Just byhearting few points related to it won’t be good enough.

Third difference between CA Course & CFA Course:

Unlike CA exam, CFA doesn’t have subject wise cut-off. It’s the overall score that matters for the result and not the score in each individual subject. So even if you don’t like subject like say (Quants), you still would be able to clear all levels of CFA by getting good score in other 9 subjects.

• Main Subject:
Financial Reporting & Analysis

• Investment-related subjects:
1. Equity Investment Analysis
2. Bond Analysis
3. Futures & Options
4. Alternative Investment Analysis (Commodities / Real Estate)

• Application-based subjects:
1. Corporate Finance
2. Portfolio Management

• Basic subjects:
1. Economics
2. Ethics
3. Quantitative Techniques

Lets first look at general differences between CFA and MBA (Finance): 1. MBA focuses on Operations, Marketing, HR & Finance whereas CFA focuses exclusively on Finance (but to a greater depth). 2. The depth of financial knowledge covered in CFA is much more intense as compared to what is covered in MBA colleges. 3. MBA teaches you soft skills and financial concepts both whereas CFA exclusively focuses on Finance (but all dimensions of it).

So, if you are looking to make career in a role which requires intense use of financial analysis skills — CFA would be a better option.

If you are looking to make career in a role which requires more use of soft skills (making ppts, marketing of financial products) – we advise you to go for MBA.

Role of CFA to get admission into MBA colleges:

Scoring decent score in entrance exams (like CAT / CET) is just one of the requirements of getting into the dream MBA College. Apart from the decent score in entrance exam, you need to have strong resume showcasing the academic achievements / professional achievements.

It has been seen that CFA plays major role here. Many IIMs are shortlisting candidates based on the professional courses taken. Once again the CFA stands highest value amongst all the professional exams in Finance.

This is very important especially for freshers during interview round as they don’t have a work experience to speak about on resume. So having CFA on resume would help the candidate to streamline the interview towards finance questions covering up for not having work experience.

Role of CFA to get placement when a student is already into an MBA college: In MBA colleges, for placement screening, companies shortlist the students based on their 1st year MBA Marks, graduation marks and overall educational qualifications. Once again it has been seen here that recently many core finance companies (majorly equity research companies and Investment Banks) are using CFA as one of the shortlisting criteria and hence increasing number of MBA students are taking the CFA Course.

Well our Lead Faculty (Mr. Rajaram Kamat) is also an Electronics Engineer. Although he has done MBA (Finance) and CFA post engineering, he is from a core engineering background. Please understand that – Field of Commerce consists of 3 basic things:

1. Making the Financial Reports 2. Verifying the Financial Reports 3. Analyzing the Financial Reports

Task 1 (Making the Financial Reports) is job of Accountant. Task 2 (Verifying the Financial Reports) is job of Auditor. Task 3 (Analyzing the Financial Reports) is a job of CFA Charterholder.

As an Engineer, you have an edge over other candidates when it comes to Analysis of Financial Statements. Yes currently you don’t know PL/ BS / CF (or even their full forms may be), but once you get hands on them, you would have a significant edge over other candidates.

To impart the basic things about Financial Reports, we conduct “Introduction to Accounts for Non Commerce Students” sessions often. Here is the video recording of the same.Keep following our website to know when the next session would be conducted.

Although Maths has only 12% weightage in CFA Level 1 exam, we have seen a general phobia in the minds of Commerce students regarding Maths. We tried to understand the reasoning behind such phobia about Maths. We came to following general conclusions:

Following are genuinely tough topics of Maths: 1. Integration & Derivatives 2. Limits 3. Matrices 4. Determinants 5. Geometry (to an extent) 6. Probability Concepts

Now, when we compare these difficult topics of Maths with what is “Maths in CFA”, you would be surprised (positively) to know that out of above mentioned difficult topics only Probability is included in CFA course. Moreover, the probability consists of a single chapter and is considered at very basic level.

Maths in CFA Level 1 considers topics like: 1. Simple Interest rate v/s Compounded interest rate 2. Concept of Time Value of Money 3. Concept of Discounted Cash Flow 4. Mean ( Arithmetic, Geometric, harmonic), Mode, Median

Yes, we understand that — as a commerce student, you have not been required to study Maths in-depth, and hence that could be a reason for overall phobia towards Maths. However, as stated above, be rest assured that Maths is not being covered in depth. Maths can be very well handled by Commerce students.

To impart the basic things about Maths, we conduct “Introduction to Maths for Commerce Students” sessions often. Keep following our website to know when the next session would be conducted.

And interestingly, Maths has only 10% weightage in CFA Level 1 Exam.