ACCA Financial Management (FM) Practice Exam

ACCA Financial Management (FM) Practice Exam

About ACCA Financial Management (FM) Practice Exam

Candidates are required to develop the knowledge and skills expected to perform roles and responsibilities of a finance manager, in domains including relation to investment, financing and dividend policy decisions. The exam has been developed to equip candidates with the skills that would be expected from a finance manager responsible for the finance function of a business.

Skills Acquired

• Understand the role and purpose of the financial management function
• Ability to assess and discuss the impact of the economic environment on financial management
• Skills to apply working capital management techniques
• Ability to carry out an effective investment appraisal
• Ability to identify and evaluate alternative sources of business finance
• Knowledge and skills to apply principles of business and asset valuations
• Ability to apply risk management techniques in business
• Skills to apply employability and technology skills

Exam Details

• 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 - 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 - 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 -  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 - 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 -  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