ADVANCED FINANCIAL
MANAGEMENT
Cheat Sheet
AFM – Cheat Sheet
Advanced Financial Management
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Key study techniques to passing your AFM exam:
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Plan your study - make sure you have a detailed study plan and stick to it
Study regularly - 60-90 a day for 5 days is much better than one long day
Practice questions - build the knowledge and practice relevant questions as you go
Complete a mock exam - don’t let the first time you attempt the exam be the day of
your exam - no 2 subjects are the same
Examiner reports and articles - vital information and guaranteed marks available if
you take the advice on offer
Exam Tips for passing the exam
Critical Assumed Knowledge
Despite spending a lot of time working through AFM questions and solutions, if you are
struggling with the basic concepts of Financial Management you will not pass your exam no matter how well you think your study is going.
We have identified the major topics from FM that you need to have a good understanding of
and suggested suitable accompanying questions:
- Working Capital Management (Plot Co.);
- Investment Appraisal (BQK Co.)
- Risk Management (Spot Co.).
You have access to every subject as part of your subscription, so spend some time
practicing each of these questions to test your basic understanding. Compare your answer
to our tutor answers and see how you got on – you should target getting at least 70%
correct. If you get above 70% for each topic, you will have gained some valuable revision on
the AFM basics and that will make a massive difference in your exam. If your marks are
below 70% then you have identified a major weakness in AFM, making you very unlikely to
pass. So, spend a bit more time looking at the videos that accompany the questions above
where the lecturer will explain the solution and the topic.
Planning
The exam is all compulsory questions; therefore, planning is vital. From a planning
perspective, I would recommend splitting the requirements into smaller sections, especially
for question 1. Read the question carefully. Take your time in thinking about an approach
and solution. If you start writing too quickly you will miss key points and marks, so take time
to ensure that you have understood the context of the question and don’t fail to apply the
correct knowledge. Remember, always answer the question asked.
AFM – Cheat Sheet
Layout and Structure (incl. professional marks)
Firstly, you must be organized and have a systematic approach to answering the question.
You should have built this skillset up during your question practice leading up to the exam.
Structure is very important. Matching this with an answer that is neat, tidy and non-crowded
makes it easier for the examiner to identify the areas that deserve marks. The best way to
structure your answer to earn professional marks is to assume the role of the character in
the scenario and replicate the deliverable in your answer (i.e if the questions requires you to
prepare briefing notes, this should be the format of your answer). Planning will enable you to
produce logical, well thought out and organised answers that hits all the key points. It is
important to show your calculations. Your answer should be concise with value adding
statements, and you should not waste time on lengthy general introductions and
conclusions.
Technical Knowledge
You need to cover the whole syllabus, as well as having a good understanding of the
assumed knowledge from the Financial Management and other related modules. However, I
would ensure you have a strong grasp of the following areas, which often come up:
● Company valuations in relation to mergers and acquisitions
● Capital structures, the financing of them and dividend policy decisions
● Investment project appraisal
● Risk management, especially hedging decisions
Application to the scenario (incl. Recommendations and conclusions)
The expectation at this stage is synthesis and evaluation. Make sure you are linking your
analysis to the scenario. Use your calculations and information from the scenario to support
any recommendations and conclusions you make as this will allow the examiner to see the
justification you have for your comments. You are expected to undertake calculations, draw
comparison against relevant information where appropriate, analyse the results and offer
recommendations or conclusions as required, so make sure that you do this with suitable
application to the scenario.
Time management
AFM is a 3-hour 15-min exam with all compulsory questions. Planning and time
management is vital so allocate the first 15 minutes to this without starting to write an exam
answer. This leaves 3 hours (or 180 minutes) for the remainder of the exam, as such you
should allow 1.8 minutes per mark for all questions you attempt (i.e. if completing a 10-mark
question, you should spend 18 minutes). Be strict with your time and don’t allow a negative
impact on one question by spending too long on another.
AFM – Cheat Sheet
Learnsignal resources available to improve exam technique
Here are some resources available for learnsignal members to help you improve your exam
technique:
Tutor Exam Report Debriefs:
Watch our tutor review of the most recent examiner report, which highlights the common
mistakes of students in the last sitting. If you can avoid these, you'll have a much higher
chance of passing your exam.
Study & Exam Support Webinars:
You can attend our weekly study webinar every Friday leading right up to the exam week,
where we provide guidance for your study and answer any questions you have. The webinar
also serves as a forum for students to talk and offer advice to each other. We also run
individual subject webinars with each of our subject tutors during our Webinar Week,
allowing you face to face time to ask technical questions and get feedback on the required
exam approach.
5 Minutes to Pass videos:
Watch our 5-minute to pass video which covers the key topics and required exam approach
for the subject. This video provides concise guidance you should follow to ensure you get
over 50% in the exam.
Exam Bootcamp
It’s never too late to try our Exam Bootcamp, which is a 21-day program for each subject
leading up to exam week, providing you daily with a topic to study, an exam standard
question, a time limit to complete this in, and our tutor solution. This allows you to cover a
large range of exam standard questions to perfect your exam technique before the real
thing.