Debt or Equity – That is the Big Question?

UK interest rates have risen again this week. This trend will continue for the foreseeable future. The borrowing cost burden on companies (& individuals) is now a major problem. The issue is exacerbated by the rise in the yield on UK government bonds. The mostly...

Asset Based Valuations

Business Valuation questions regularly appear in the objective test questions in ACCA FM. There four categories of valuations: Asset Based Earnings Dividends Cash Flows This blog looks at the first of these. An asset valuation is based upon this equation : Net Assets...

Only Lionel Richie Can Dance on The Ceiling 😀

In this blog, I want to cover a topic that is part of Interest Rate Risk Hedging within the ACCA AFM syllabus. In particular, to ensure that you don’t make a common error made by many students. The collar hedge has a very clear purpose. It is designed to protect the...

Timing To Pass

The traditional line of thinking, when it comes to exam timing, is minutes per marks. It has stood the test of “time” but for my exams, I look at things differently. For ACCA FM, I would recommend you keep it simple & divide the time into 4 x 45mins. Also, I would...

How Did You Get To That Rating ?

Whether it is presented as letters (eg AAA), letters & numbers (eg Baa 1) or purely a number (564/1000), an entity’s credit rating is a key value. Lenders in particular use this value to assess not only the safety of their commitment, but also the interest rate...

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...