ACCA – Financial Management (FM)

This subject helps you develop the knowledge and skills expected of a finance manager, in relation to investment, financing, and dividend policy decisions. The syllabus for Financial Management is designed to equip you 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 Advanced Financial Management.

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

Other areas of the syllabus contain outcomes relating to the demonstration of appropriate digital and employability skills in preparing for and taking the FM examination. This includes being able to interact with different question item types, manage information presented in digital format and being able to use the relevant functionality and technology to prepare and present response options in a professional manner.

Syllabus structure

• • Financial management function

  • Financial management environment

  • Working capital management

  • Investment appraisal

  • Business finance

  • Business valuations

  • Risk management

  • Employability and technology skills

Main Capabilities

On successful completion of this subject, you should be able to:

• • Discuss the role and purpose of the financial management function.

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

  • Discuss and apply working capital management techniques.

  • Carry out effective investment appraisal.

  • Identify and evaluate alternative sources of business finance.

  • Discuss and apply principles of business and asset valuations.

  • Explain and apply risk management techniques in business.

  • Apply employability and technology skills.

The ACCA qualification is ideal for people who want a career in finance and business.

The Financial Management (FM) exam is part of the Applied Knowledge Level of the ACCA qualification. If you are graduated with a degree accredited by ACCA you are exempt from this subject.

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