How to pass ACCA Financial Management (FM)

I did a survey on my Facebook page on which paper is the hardest between ACCA PM and ACCA FM. The majority of the students deemed ACCA FM to be the hardest. I generally found ACCA PM as the hardest paper of the ACCA Qualification and so this came as a surprise. I then made it a point to write an article on some of the tips that you can use to pass ACCA FM. Here is how you can do it.

ACCA FM has one of the longest syllabuses of the ACCA Skills Paper. One the reasons why students fail is because they do not cover the whole syllabus when studying. It is important to ensure that every part of the syllabus is covered fully and that you have a deep understanding of every section of the paper including all the dark corners. By dark corners I mean topics like interest rate management as those are the areas that students generally find difficult. Study derivatives as these are often left unanswered by most students. This is advice from the ACCA FM examiner.

The most important sections of the ACCA FM syllabus are NPV, cost of capital, business valuations, sources of finance and financial ratios, and foreign currency and interest rate management. NPV underpins this whole ACCA FM syllabus and hence will be examined in every sitting. It is important that you understand this topic very well. Have enough time to study for all these sections of the syllabus. This can be done through watching study lectures or through reading the study text atleast once. Make your own notes during this process.

The general assumption made by most students is that this paper is based on calculations. Knowing every calculation will certainly help you pass this paper, but generally, financial management is about decision-making more than anything and that is reflected very well by this ACCA exam. The exam is generally deemed to be 40% calculations and 60% written responses and you must be in a position to explain all your calculations and provide an opinion that actually makes sense. Be prepared to justify your opinions and that comes with understanding what you are calculating and knowing how every formulae in the formulae booklet works. Practice the use of discount tables.

You need to practice a lot past papers to pass this ACCA exam. During the revision phase, make sure you are able to present your workings in a logical way as that is important for the exam. Include and label all your workings so that the examiner may understand your answers! A wrong calculation is only marked wrong once, so if you encounter a problem, move on and you will score marks for the next part of your workings. There is no negative making in this exam so make sure you attempt all your multiple choice style questions and do not leave anything unanswered. If you are not sure about any answer within that part of the ACCA FM exam (Section A and Section B), take an educative guess. Do not leave any questions unanswered.

Lastly, allocate enough time for revision. Read other resources provided by ACCA including technical articles and examiner reports! Attempt as many past exam papers as you can and do it under real exam conditions. Remember, if you are attempting the ACCA FM exam you are required to be a decision-maker, so think like one! I hope this helps you prepare for this exam! Goodluck…

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