ACCA Financial Management (FM) Practice Exam

The ACCA Financial Management (FM) exam is part of the Applied Knowledge level of the Association of Chartered Certified Accountants (ACCA) qualification. It equips candidates with the knowledge and skills expected of a finance manager, focusing on making informed decisions related to:

• Investment: Capital budgeting techniques to evaluate potential investments.
  
• Financing: Identifying and evaluating different sources of financing for a business.
• Dividend Policy: Deciding on the appropriate level of profit to distribute to shareholders.

The FM syllabus aims to develop your competency in applying these core financial management principles to real-world business scenarios.

Who should take the exam?

This exam is ideal for:

• Those enrolled in the ACCA qualification program.
  
• Individuals with basic understanding of accounting principles.
• Those who want to develop their expertise in financial decision-making for businesses.
• ACCA students
• Finance professionals
• Business owners and managers

Exam Details

• Exam Name: ACCA Financial Management (FM)
• Exam Questions: 100 Questions
• Exam Duration: 2 hours
• Passing score: 50% and above
• Type of Questions: Multiple choice questions

Course Outline

The ACCA Financial Management (FM) Exam covers topics including - 

Module 1 - Understand Financial management function

1. The nature and purpose of financial  management

2. Financial objectives and relationship with  corporate strategy

3. Stakeholders and impact on corporate objectives

4. Financial and other objectives in not-for-profit organisations

Module  2 - Learn about Financial management environment

1. The economic environment for business

2. The nature and role of financial markets  and institutions

3. The nature and role of money markets

Module  3 - Working capital management

1. The nature, elements and importance of  working capital

2. Management of inventories, accounts  receivable, accounts payable and cash

3. Determining working capital needs and funding strategies

Module  4 - Understand  Investment appraisal

1. Investment appraisal techniques

2. Allowing for inflation and taxation in DCF

3. Adjusting for risk and uncertainty in investment appraisal

4. Specific investment decisions (lease or buy, asset replacement, capital rationing)

Module  5 - Learn about Business Finance 

1. Sources of, and raising, business  finance

2. Estimating the cost of capital

3. Sources of finance and their relative costs

4. Capital structure theories and practical  considerations

5. Finance for small- and medium-sized  entities (SMEs)

Module  6 -  Business valuations

1. Nature and purpose of the valuation of  business and financial assets

2. Models for the valuation of shares

3. The valuation of debt and other financial assets

4. Efficient market hypothesis (EMH) and practical considerations in the valuation of shares

Module  7 -  Risk management

1. The nature and types of risk and approaches to risk management

2. Causes of exchange rate differences and interest rate fluctuations

3. Hedging techniques for foreign currency risk

4. Hedging techniques for interest rate risk

Module  8 -  Understand Employability and technology skills

1. Use computer technology to efficiently access and manipulate relevant information

2. Work on relevant response options, using available functions and technology, as would be required in the workplace Financial Management (FM)

3. Navigate windows and computer screens to create and amend responses to exam requirements, using the appropriate tools

4. Present data and information effectively, using the appropriate tools