ACCA FM case studies
ACCA FM · Put your knowledge to work in context.
Financial Management (FM) is one of the exams in the ACCA Qualification. ACCA's own study support resource listing places it alongside Business and Technology (BT), Management Accounting (MA), Financial Accounting (FA), Corporate and Business Law (LW), Performance Management (PM), Taxation (TX), Financial Reporting (FR) and Audit and Assurance (AA). It is aimed at candidates who have moved beyond recording transactions and now need to make financing, investment and liquidity decisions, and to explain those decisions to managers and stakeholders. The FM syllabus is normally organised around the financial management function and environment, working capital management, investment appraisal, business finance, cost of capital, business valuations and risk management. The ACCA FM case studies are 5 cases and about 3,783 words.
1Halden Components: settlement discount versus factoring
Halden Components Ltd has revenue of 24.0m and cost of sales of 18.0m. Its statement of financial position shows receivables of 5.0m, inventory of 3.2m and payables of 2.8m.
604 words, about 3 min2Tollbridge Engineering: two machines, two lives, one budget
Tollbridge Engineering must choose between two mutually exclusive machines. Machine A costs 500,000, has a four-year life, no residual value and generates annual net cash inflows of 200,000.
876 words, about 4 min3Ravenglass plc: which discount rate for a new sector?
Ravenglass plc has 40 million ordinary shares quoted at 3.20 and 60 million nominal of 7% irredeemable bonds quoted at 92 per 100. The risk-free rate is 4%, the market risk premium is 5.5% and Ravenglass's equity beta is 1.25.
635 words, about 3 min4Kestrel plc: valuing Merlin Ltd and pricing the offer
Kestrel plc is considering an offer for Merlin Ltd, an unquoted manufacturer. Merlin's profit after tax is 4.2m, its dividend is 1.6m and its net assets are 26m; it has 10 million shares.
845 words, about 4 min5Fenwick Instruments: hedging a $5m receipt
Fenwick Instruments Ltd, a UK company, expects to receive 5,000,000 from a US customer in three months. Spot is 1.3000/£ and the three-month forward is 1.2980/£.
823 words, about 4 min