ACCA-FM –Financial Management

Teacher

Course Description:

FM – Financial Management, is one of the six skill level papers in ACCA, which aims to develop the knowledge and skills expected of a finance manager, in relation to investment, financing, and dividend policy decisions.

The syllabus for Paper FM, Financial Management, is designed to equip candidates with the skills that would be expected from a finance manager responsible for the finance function of a business. It prepares candidates for more advanced and specialist study in Paper AFM, Advanced Financial Management.

The paper, therefore, starts by introducing the role and purpose of the financial management function within a business. Before looking at the three key financial management decisions of investing, financing, and dividend policy, the syllabus explores the economic environment in which such decisions are made.

The next section of the syllabus is the introduction of investing decisions. This is done in two stages – investment in (and the management of) working capital and the appraisal of long-term investments.
The next area introduced is financing decisions. This section of the syllabus starts by examining the various sources of business finance, including dividend policy and how much finance can be raised from within the business. It also looks at the cost of capital and other factors that influence the choice of the type of capital a business will raise. The principles underlying the valuation of business and financial assets, including the impact of cost of capital on the value of business, is covered next.

The syllabus finishes with an introduction to, and examination of, risk and the main techniques employed in managing such risk.

This papers is assessed by 3 hours computer based examination (Session CBE) and examines both computational and interpretational skills. The pass mark is 50%.

Learning Objectives:

On successful completion of this paper candidates should be able to:

A: Discuss the role and purpose of the financial management function.

B: Assess and discuss the impact of the economic environment on financial management.

C: Discuss and apply working capital management techniques.

D: Carry out effective investment appraisal.

E: Identify and evaluate alternative sources of business finance.

F: Discuss and apply principles of business and asset valuations.

G: Explain and apply risk management techniques in business.

Certification:

Students are awarded “Advanced Diploma in Accounting and Business” when they have successfully completed (either passed or exempt) Papers LW-FM. A positive result is required for all nine BT to FM papers in order for the Advanced Diploma in Accounting and Business certificate to be awarded.