ACCA · Applied Skills
Financial Management
Develop core financial management skills including investment appraisal, business finance, working capital management, business valuations, and risk management. The essential paper for aspiring finance professionals.
3 hours
Exam length
50%
Pass mark
Computer-Based Exam (CBE)
Format
March, June, September, December
Sittings
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ACCA Financial Management
Financial Management (FM) is an Applied Skills paper that develops essential skills in financial management and decision making. It equips students with the knowledge to make sound financial decisions regarding investment, financing, and dividend policies.
The paper covers the financial management function and its objectives, the financial management environment including financial markets, working capital management, investment appraisal techniques (NPV, IRR, payback), business finance including sources of finance and cost of capital, business valuations, and risk management techniques including hedging.
FM provides the critical link between accounting and finance, preparing students to advise on key financial decisions. It is the prerequisite for Advanced Financial Management (AFM) at the Strategic Professional level and is one of the most popular ACCA papers.
FM is essential for roles in corporate finance, treasury management, financial planning, and investment analysis. The paper prepares you for positions such as Financial Analyst, Treasury Analyst, Corporate Finance Associate, and Financial Planning Manager.
Learning outcomes
What you'll be able to do.
01
Explain the role and objectives of the financial management function
02
Evaluate working capital policies and manage cash, inventory, and receivables
03
Apply investment appraisal techniques including NPV, IRR, and payback
04
Evaluate sources of finance and calculate the cost of capital
05
Apply business valuation models and understand market efficiency
06
Assess and manage financial risks using hedging techniques
FM Exam Syllabus
The FM syllabus covers the key topics you'll be examined on.
Financial Management Function
Financial Management Function
- The nature and purpose of financial management
- Financial objectives and the relationship with corporate strategy
- Stakeholders and impact on corporate objectives
- Financial and other objectives in not-for-profit organisations
Financial Management Environment
Financial Management Environment
- The economic environment for business
- The nature and role of financial markets and institutions
- The nature and role of money markets
Working Capital Management
Working Capital Management
- The nature, elements and importance of working capital
- Management of inventories, accounts receivable, accounts payable and cash
- Determining working capital needs and funding strategies
Investment Appraisal
Investment Appraisal
- Investment appraisal techniques
- Allowing for inflation and taxation in DCF
- Adjusting for risk and uncertainty in investment appraisal
- Specific investment decisions (lease or buy, asset replacement, capital rationing)
Business Finance
Business Finance
- Sources of, and raising, business finance
- Estimating the cost of capital
- Sources of finance and their relative costs
- Capital structure theories and practical considerations
- Finance for small- and medium-sized entities (SMEs)
Business Valuations
Business Valuations
- Nature and purpose of the valuation of business and financial assets
- Models for the valuation of shares
- The valuation of debt and other financial assets
- Efficient market hypothesis (EMH) and practical considerations
Risk Management
Risk Management
- The nature and types of risk and approaches to risk management
- Causes of exchange rate differences and interest rate fluctuations
- Hedging techniques for foreign currency risk
- Hedging techniques for interest rate risk
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Guided study plans
Week-by-week plans aligned to your sitting date — so you always know what to study next.
Video lectures
Full syllabus coverage from expert tutors, broken into focused 10-15 minute lessons.
CBE practice questions & mocks
Realistic computer-based exam questions and full mocks, marked with examiner-style feedback.
1-2-1 sessions
Book one-to-one time with a tutor for tricky topics, results reviews, or exam strategy.
Revision Bootcamp
Pre-sitting intensives to sharpen question technique and pin down high-mark topics.
Weekly student-support webinars
Drop-in calls where tutors walk through tough topics and answer questions live.
ACCA FM Exam Structure
Everything you need to know about the FM exam format, timing, and what to expect on exam day.
Duration
3 hours
Format
Computer-Based Exam (CBE)
Structure
FM is a 3-hour computer-based exam (CBE) with three sections. Section A: 15 objective test questions worth 2 marks each (30 marks). Section B: three case-style questions, each with five OT questions of 2 marks (30 marks). Section C: two 20-mark constructed response questions (40 marks). All questions are compulsory. Total 100 marks; 4 exam sessions per year; 50% pass mark.
Sittings
March, June, September, December
Pass mark
50%
Your Guide To Pass ACCA FM
Expert tips from our tutors to help you prepare effectively and pass your FM exam on the first attempt.
Master NPV Calculations
Net present value is the most important investment appraisal technique in FM. Practice NPV calculations with tax, inflation, and working capital adjustments until you can do them confidently.
Know WACC Inside Out
The weighted average cost of capital (WACC) is fundamental to FM. Understand how to calculate the cost of equity (CAPM, dividend growth model), cost of debt, and combine them into WACC.
Practice Working Capital Questions
Working capital management is a significant topic. Practice calculations for inventory management (EOQ), receivables management, and cash management techniques.
Understand Hedging Mechanisms
Risk management using forwards, futures, options, and money market hedges is tested regularly. Understand when each technique is appropriate and be able to compute the outcomes.
Link Theory to Calculation
FM requires both calculations and written explanations. Practice writing clear explanations of financial concepts alongside your numerical work.
Study with Learnsignal
Learnsignal provides comprehensive FM courses with detailed worked examples, formula practice, and expert tutor support to build your financial management skills.
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See ACCA pricing →Frequently Asked Questions About FM
Everything you need to know about the Financial Management exam and how to prepare for it.
What is ACCA Financial Management (FM)?+
Financial Management (FM) is an Applied Skills paper covering investment appraisal, business finance, working capital management, business valuations, and risk management. It develops the financial decision-making skills essential for finance professionals.
How long is the FM exam?+
The FM exam is 3 hours long with Section A (objective test questions worth 20 marks) and Section B (constructed response questions worth 80 marks).
When can I sit the FM exam?+
FM is available in four exam sessions per year: March, June, September, and December.
Is FM a difficult paper?+
FM is considered one of the more challenging Applied Skills papers due to the combination of quantitative calculations and conceptual understanding required. Regular practice with NPV, WACC, and hedging calculations is essential for success.
What formulas do I need to know for FM?+
Key formulas include NPV, IRR, WACC, CAPM, dividend growth model, EOQ, Miller-Orr model, and Black-Scholes. A formula sheet is provided in the exam, but familiarity with the formulas helps you work faster.
What is the pass mark for FM?+
The pass mark for FM is 50%. The exam is marked out of 100.
How does FM relate to AFM?+
FM is the direct prerequisite for Advanced Financial Management (AFM) at the Strategic Professional level. AFM builds on all FM topics, taking them to an advanced level with more complex scenarios and techniques.
Can I use a calculator in the FM exam?+
Yes, the CBE platform provides an on-screen calculator, and you can also bring your own ACCA-approved calculator. A spreadsheet tool is also available for more complex calculations.
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