ACCA FM Formula Sheet
The key formulas for ACCA FM (Financial Management) on a single A4 page, free to download and print. Built to the paper's current examinable scope.
FM Formula Sheet · PDF · 1 page · A4 · print-ready
Download the FM formula sheetUpdated 25 September 2026: purchasing power parity now gives the expected future spot rate, S1, as on ACCA's own formulae sheet, rather than F0. If you printed an earlier copy, please download it again.
The formulas on the FM sheet
The full sheet, reproduced as text so you can revise on screen. Last checked September 2026. Spotted an error? Report it and it will be corrected.
Working Capital Management
- Cash operating cycle = Inventory days + Receivables days − Payables days
- Inventory days = Inventory ÷ Cost of sales × 365
- Receivables days = Receivables ÷ Revenue × 365
- Payables days = Payables ÷ Cost of sales × 365
- EOQ = √(2CoD ÷ Ch)
- Co = cost per order · D = annual demand · Ch = holding cost/unit/year
Receivables & Payables
- Cost of discount = [d ÷ (100 − d)] × [365 ÷ days saved] × 100
- Compare factoring vs invoice discounting on cost
- Discount worthwhile if cost < short-term borrowing rate
Investment Appraisal
- NPV = Σ discounted cash flows − initial outlay
- IRR ≈ L + [NPVL ÷ (NPVL − NPVH)] × (H − L)
- Payback = time to recover initial outlay
- Annuity factor = [1 − (1 + r)−n] ÷ r
- Perpetuity = 1 ÷ r · Growing perpetuity = 1 ÷ (r − g)
- Real rate: (1 + m) = (1 + r)(1 + i)
- m = money rate · r = real rate · i = inflation
Sensitivity & Risk
- Sensitivity = NPV ÷ PV of variable × 100
- Smallest % change = most sensitive variable
- Expected value = Σ (probability × outcome)
Cost of Capital — WACC
- WACC = [Ve ÷ (Ve + Vd)] Ke + [Vd ÷ (Ve + Vd)] Kd(1 − t)
- Use market values for weightings unless told otherwise
Cost of Equity
- Dividend growth: Ke = [D0(1 + g) ÷ P0] + g
- CAPM: Ke = Rf + β(Rm − Rf)
- Growth g = br (b = retention rate, r = return)
- Or g = (D0 ÷ Dn)1/n − 1 (geometric)
Cost of Debt
- Irredeemable: Kd = I(1 − t) ÷ MV
- Redeemable: IRR of after-tax cash flows
- Preference shares: Kp = D ÷ MV
- Bank loan: interest rate × (1 − t)
Gearing & Beta
- Asset beta: βa = βe [Ve ÷ (Ve + Vd(1 − t))]
- Regear: βe = βa [(Ve + Vd(1 − t)) ÷ Ve]
- Gearing = Debt ÷ Equity, or Debt ÷ (Debt + Equity)
- Interest cover = PBIT ÷ Interest
Business Valuations
- P/E valuation = EPS × P/E ratio
- Dividend valuation = D0(1 + g) ÷ (Ke − g)
- Net asset value = Assets − Liabilities
- Earnings yield = EPS ÷ share price
Foreign Exchange Risk
- PPP: S1 = S0 × (1 + hc) ÷ (1 + hb)
- IRP: F0 = S0 × (1 + ic) ÷ (1 + ib)
- Higher inflation or interest rate currency → weakens
- Hedge with forwards, money market, futures or options
How to use it
A formula sheet is a revision aid, not a substitute for practice. Reading formulas builds recognition; applying them under time pressure builds recall, and it's recall the exam tests. The most effective way to use this sheet is alongside questions: attempt a question first, then check the sheet only when you're stuck, rather than working with it open in front of you.
Print it and keep it beside you while you work through FM questions. Once you stop reaching for it, you know the formulas are in place.
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This sheet is an original compilation of standard formulas mapped to ACCA FM's current examinable scope. It is a revision aid only and is not a substitute for the official formulae and rates provided in your exam. Looking for another paper? See all ACCA formula sheets. GoQualified is not affiliated with ACCA.