September 2022 to June 2023 exams Watch free ACCA FM lectures 1

Financial Management (FM)

Formulae 3
1. Financial management objectives 7
2. The financial management environment 9

Working Capital Management 19

3. Management of working capital (1) 19
4. Management of working capital (2) – Inventory 25
5. Management of working capital (3) – Receivables and Payables 31
6. Management of working capital (4) – Cash 35

Investment Appraisal 41
7. Investment appraisal – methods 41
8. Relevant cash flows for DCF 47
9. Discounted cash flow – further aspects 53
10. Investment appraisal under uncertainty 57

Business Finance and Business Valuations 61

11. Sources of finance – equity 61
12. Sources of finance – debt 65
13. Capital structure and financial ratios 69
14. Sources of finance – islamic finance 75
15. The valuation of securities – theoretical approach 77
16. The valuation of securities – practical issues 83
17. The cost of capital 85
18. When (and when not!) to use the WACC for investment appraisal 91
19. The cost of capital – the effect of changes in gearing 95
20. Capital asset pricing model 101
21. CAPM and MM combined 105

Risk Management 107

22. Forecasting foreign currency exchange rates 107
23. Foreign exchange risk management 111
24. Interest rate risk management 119
25. The treasury function 125

Employability and Technology Skills 127

26. Employability and Technology Skills 127

Answers to examples 131

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