Financial Management-FM

The Financial Management syllabus contains a section on Islamic finance (Section E3). All components of this section will be examined at intellectual level 1, knowledge and comprehension Although the concept of Islamic finance can be traced back about 1,400 years, its recent history can be dated to the 1970s when Islamic banks in Saudi Arabia and the United Arab Emirates […]

This article suggests an approach for students to apply to a key area of the Financial Management syllabus before finishing with a worked example to demonstrate the technique discussed. The requirement to analyse suitable financing alternatives for a company has been common in Financial Management over the years. I am sure it will be examined again in the future. This is

The calculation of equivalent annual costs is a tool that can be used by companies to assist in asset replacement decisions. Equivalent annual costs At some stage you have probably bought an asset such as a car, a washing machine or a computer and you may have considered how long you should keep that asset prior to replacing it. If

In this article, we consider potential finance sources that an SME could use, with a particular focus on the more modern sources of crowdfunding and supply chain financing. Prior to considering some of the finance sources available to small and medium-sized enterprises (SMEs) we should first consider what we mean by SMEs, why they are important, and why they often

This article focuses on foreign accounts receivable, which present some additional challenges to a business that are not present with domestic-based customers. Foreign accounts receivable present some additional challenges to a business that are not present with domestic-based customers. It is harder for a business to pursue any overdue amounts from a business in another country with a different legal

In the final article in his three-part series, we look at the theory, advantages and disadvantages of CAPM. Section E of the Financial Management study guide contains several references to the Capital Asset Pricing Model (CAPM). This article is the final one in a series of three, and looks at the theory, advantages, and disadvantages of the CAPM. The first article in

This article describes how to apply the CAPM when calculating a project-specific discount rate to use in investment appraisal. Project-specific discount rates Section E of the Study Guide for Financial Management contains several references to the Capital Asset Pricing Model (CAPM). This article, is the second in a series of three, and looks at applying the CAPM in calculating a project-specific discount

In the first of a three-part series of articles, we consider the CAPM and its components, shows how it can be used to estimate the cost of equity, and introduces the asset beta formula. The cost of equity Section E of the Study Guide for Financial Management contains several references to the Capital Asset Pricing Model (CAPM). This article introduces

This article looks at Section G of the Financial Management Study Guide relating to the management of interest rate risk. Section G of the Financial Management Study Guide specifies the following relating to the management of interest rate risk: (a) Discuss and apply traditional and basic methods of interest rate risk management, including: (i) matching and smoothing (ii) asset and liability management (iii)

Section C2d) of the Financial Management Study Guide states that candidates should be able to ‘discuss, apply and evaluate the use of relevant techniques in managing accounts receivable’. Section C2d) of the Financial Management study guide states that students should be able to ‘discuss, apply and evaluate the use of relevant techniques in managing accounts receivable’. Further detail of what is required