Here are the key formulas for ACCA FM (Financial Management):

Time Value of Money

• Present Value: PV = FV × 1/(1+r)ⁿ
• Future Value: FV = PV × (1+r)ⁿ
• Annuity Present Value: PV = PMT × [(1-(1+r)⁻ⁿ)/r]

Investment Appraisal

• Net Present Value (NPV) = Present value of cash inflows - Present value of cash outflows
• Internal Rate of Return (IRR): NPV = 0
• Payback Period = Initial investment ÷ Annual cash flow

Working Capitals

• Working Capital = Current Assets - Current Liabilities
• Inventory Days = (Inventory ÷ Cost of Sales) × 365
• Receivable Days = (Receivables ÷ Credit Sales) × 365
• Payable Days = (Payables ÷ Credit Purchases) × 365
• WACC = (E/V × Re) + (D/V × Rd × (1-T))

Cost of Capital

• Cost of Equity (CAPM): Re = Rf + β(Rm - Rf)
• Dividend Growth Model: Cost of Equity = (D₁/P₀) + g

Financial Ratios

• ROCE = Operating Profit ÷ Capital Employed