We Need More Money – Please?

Capital rationing is tested in both of my exams – ACCA FM & AFM. It is simply defined as not having sufficient resources to invest in all projects that have a positive NPV. There are two defined categories – hard & soft. Hard CR is caused by...

Should They Have Sold Out.

To continue my ACCA support blogs, today I am going to look at if Stephen & Rita made the correct decision to sell their company. Who may you ask are Stephen & Rita ? For those who are not aware, there was a question in a recent ACCA AFM exam about a small...

The Philosophy of Mr Linus Tadt

You have probably never heard of Mr Linus Tadt. But, for those ACCA students who are sitting their exams in June I would take heed of what he has said. I have been a follower of Mr Tadt’s philosophy for most of my career in this profession. He has been a major...

Which Direction?

Risk Management is part of both my ACCA papers. In ACCA AFM, it has to be tested in the exam to some extent. Mostly, it has been worth at least 20 marks. FX Risk Management is one of the two big topics that make up Risk Management. The starting point here is to...

Shall We Add Back TAD ?

ACCA AFM students will be familiar with Tax Allowable Depreciation (TAD). It is regularly tested across several syllabus areas. TAD is not a cash flow. It is used to ascertain taxable profit which allows us to find a cash flow – the tax payable (or saved). This...

The ‘Divide’ on Dividend Policy

Dividend policy is part of both ACCA FM & AFM. However, it is examined in different ways in each paper. In ACCA FM, the questions concentrate on written side . The knowledge required can be allocated into: 1. Dividend Policy Theories – MM, Residual &...

Liquidate or Reconstruct – That is the Question ?

ACCA AFM students will be know that corporate reconstructions are a big ( & challenging) part of the syllabus. It can be tested in many ways. What we have not seen for a while is the classic “Liquidate vs Reconstruct” question. Today, you have a case study to...

NPV, No Not Really

ACCA AFM & FM students should be using the spreadsheet functions as much as they can. The most used of these is the “NPV Function”, but be aware the title can be a little misleading. It does not give you the NPV directly. The function is designed to give you the...

De-gear & Re-gear – It’s a Process

CAPM is a big part of both the ACCA FM & AFM exams. The equation is not too difficult to use to find the Ke. However, ascertaining the correct beta is a little more challenging. The beta needs to reflect the appropriate systematic business risk along with the...