ACCA Advanced Financial Management (AFM) Study Guide

How to prepare Advanced Financial Management

1. Map the syllabus into three blocks: investment and financing decisions, valuation and restructuring, and risk management. Rate yourself on each chapter so you know where to spend most time.
2. Learn the core techniques first: NPV, IRR, adjusted present value, cost of capital, and free cash flow valuation. Be able to set up each calculation from a blank page, including the tax, working capital and financing side effects.
3. Study the international chapters together: forex, international trade, multinational investment, dividend policy, transfer pricing and treasury. These link closely, and exam scenarios often use them in the same case.
4. Practise hedging and option questions separately. Work through forward, futures, money market, swaps and options for both currency and interest rate risk. For each, write one sentence on when it suits the client and one on its weakness.
5. Build your discussion skills for ESG, ethics, the adviser's role, financial strategy and reconstruction. For each topic, prepare a short list of points you can apply to a scenario, such as stakeholder impact, risk, cost and feasibility.
6. Do full Section B-style questions under a timer, then rewrite your weakest answers. Compare your work with the examiner's approach, and check that each calculation has a conclusion and each discussion point is applied to the facts.
7. Practise Section A case studies in full. Read the requirements first, mark key data, plan a structure, and write a recommendation that weighs numbers against non-financial factors.
8. In the last weeks, sit at least two complete papers in 3 hours 15 minutes. Review your formula and layout habits, and fix the errors in your log before the exam.

Time management in the exam

• →Use the marks as your clock. The paper is 100 marks in 195 minutes, so allow a little under two minutes per mark, and keep a few minutes at the end for review.
• →Spend the first few minutes on Section A reading and planning. Read the requirements, scan the data, and decide your order before writing. Do the same briefly for each Section B question.
• →Start with the question where you are strongest to bank marks and build confidence, but keep strictly to its time budget. Move on when the time is up, even if the answer is unfinished.
• →Within each question, take the quick marks first, such as definitions, short explanations and simple calculation parts. Leave the heavy workings until you have secured these.
• →Keep your layout tidy so you can work fast. Label your calculations, show each step, and state assumptions in one line instead of long paragraphs.
• →Reserve the final minutes to check that each requirement has been answered and that you have given a clear recommendation, since the professional skills marks depend on it.