Analyst Mail Box

Q:

Hi James,

I am currently working as a mechanical engineer and I am thinking of enrolling in the CFA Level I program in June 2008.

I am not sure if I am able to prepare sufficiently well to pass the exam, given that I do not have sufficient background in financial accounting and economics (I have read up an econs textbook though, and now I'm pretty comfortable with the concepts). I am very good in the quantitative analysis methods, and I have good backgrd in statistics.

Therefore, financial statement analysis is the topic which I am most uneasy about, since it carries a very large weightage in the exam. I would like to know how to prepare well for this topic? The CFA recommended textbook is so difficult to understand! I wonder if you have any good and relevant textbook that is easier to understand and more suitable for someone like me.

As for the other topics like corporate finance, I feel that they are more on the quantitaive side, so I'm quite comfortable with these topics. Any other suggestions or advice you have for me are also very much welcomed.

Thanks!!

Regards,
Simon

A:
Hi Simon

Similar to you, before I began studying for level 1 I had never seen any accounting or financial statement material because I studied economics during my undergraduate schooling. I recommend using the Schweser books to improve your financial statement analysis because the material is condensed, which allows you to cover more material quicker. Unfortunately, there isn't one easy way to understand financial statements and accounting. I read the accounting material two full times, and select material a third time. Shoot me an email with any more questions. And remember, its perfectly ok, if you have to read financial statement analysis three times. Take care.

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Q:
James

Great blog so far!!! I am about to start studying. I have the CFA Institute books, but was thinking about buying the Schweser notes instead. A few people, including you, have recommended them. Does Schweser update them after every test. Eg. did they update them after the June exam?

A:
I spoke with the CFA Institute and Schweser. Neither update their books mid year, which means that you should use the same books to prepare for the December 2007 exam as other candidates used for the June 2007 exam. This means that there is no new material added to December 2007 exam, after the June 2007 exam. For each year's test, the CFA Institute usually releases the books in July of the preceding year, meaning the books for the 2008 exams are likely to be released in July of 2007. And Schweser usually releases their books in October or November of 2007 for the 2008 exams.