ACCA FM — Financial Management Technical Articles

Discusses the nominal and real terms approaches to NPV investment appraisal, including the impact of taxation — an area where unprepared candidates often make mistakes.

Covers advanced investment appraisal techniques — one of the core and most frequently examined topics within the Financial Management paper.

Explains how to calculate equivalent annual costs — a tool used by companies to assist in asset replacement decisions and capital expenditure planning.

Covers the foundations of working capital management — analysis of current assets and liabilities. Can form the whole of a 20-mark FM question.

Covers the management of accounts receivable — credit policies, early settlement discounts, and the cost-benefit analysis of credit decisions.

Considers two methods a company could adopt to speed up the collection of cash from customers — factoring and invoice discounting.

Introduces the CAPM, its components, how it estimates the cost of equity, and the asset beta formula — essential FM exam knowledge.

Describes how to apply the CAPM when calculating a project-specific discount rate to use in investment appraisal — a common exam requirement.

The final part of the CAPM series — critically evaluating the theory, examining its practical advantages and widely discussed limitations.

The first of two articles on how to calculate a suitable discount rate — covering weighted average cost of capital and the effect of gearing.

Continues from Part 1 — applying the Modigliani-Miller propositions and the CAPM to derive the cost of capital in geared entities.

Covers Section E of the FM syllabus — types of finance, sources of finance, and the mix of financing available to businesses.

Considers finance sources for SMEs — with a particular focus on modern sources including crowdfunding and supply chain financing.

Suggests a structured approach for analysing financing alternatives in FM exam questions — demonstrated through a worked example.

Covers Islamic finance — recently introduced to the FM syllabus. Explains the key principles, instruments, and differences from conventional finance.

Focuses on the three types of currency risk — economic risk, translation risk, and transaction risk — and how each is managed in practice.

Covers Section G of the FM syllabus — the management of interest rate risk using forward rate agreements, futures, options, and swaps.

Focuses on foreign accounts receivable — the additional challenges of dealing with overseas customers compared to domestic-based ones.

Discusses the three broad approaches to business valuations — assets-based, income-based, and cash flow-based methods and when to apply each.

Introduces behavioural finance and its key concepts — important for understanding market efficiency and valuation debates within the FM syllabus.

Examines whether it is possible to increase shareholder wealth by changing the capital structure — covering traditional view, MM propositions, and practical considerations.

Looks at the two ways wealth can be provided to shareholders — dividends and share price growth — and examines dividend theories, policies, and practical considerations.