In the ACCA Foundations in Accountancy suite, FFM (Foundations in Financial Management) focuses on how organizations manage their financial resources to achieve business objectives.
FFM Syllabus Overview
The syllabus covers the management of working capital, investment appraisal, and the sources of finance:
- Financial Management Function: The objective of financial management (wealth maximization), the organizational context, and the regulatory environment.
- Working Capital Management: Managing cash, inventories, and receivables/payables. This includes calculating the operating cycle and using techniques like the Economic Order Quantity (EOQ).
- Investment Appraisal: Evaluating capital projects using Net Present Value (NPV), Internal Rate of Return (IRR), Payback Period, and Accounting Rate of Return (ARR).
- Finance for Business: Identifying sources of finance such as equity, debt, and venture capital, and calculating the cost of capital.
- Principles of Working Capital: Understanding the trade-off between liquidity and profitability.
Key Learning Outcomes
By the end of this module, you should be able to:
- Explain the role of financial management and its relationship with management accounting.
- Calculate and analyze the working capital cycle and recommend improvements.
- Apply discounted cash flow (DCF) techniques to assess the viability of capital investments.
- Evaluate different sources of funding and their suitability for specific business needs.
- Use financial ratios to monitor and manage the financial performance of an organization.
Exam Format
- Duration: 2 hours.
- Structure: 50 objective test questions (2 marks each).
- Pass Mark: 50%.