ACCA F9 Exam Tips:
ACCA Exam Tips for paper F9 Financial Management for June 2015 session are given as follows by famous tuition providersKaplan
Investment Appraisal:– NPV with Inflation and Taxation
– IRR
Working Capital Management:
– Cash operating cycle
– Receivables management
– Payables management or Inventory management
Valuations:
– PE ratio
– Dividend valuation methods
– Cash flow based values
– Efficient market hypothesis
Business Finance:
– Financial Ratios (Interpretation)
– Cost of Capital
Risk Management:
– Foreign Exchange Risk
Financial Management Function and Environment
Bpp
Section A20 multiple choice questions worth 2 marks each. The MCQs will largely be knowledge based and will balance out the questions in Section B to make sure that all aspects of the syllabus are examined. It is likely that some of the MCQs will test the financial management and objectives (ratio analysis, the concept of shareholder wealth) as well as economic environment and financial institutions topics (financial intermediation, fiscal and monetary policies). The efficient market hypothesis is likely to be tested here too. But bear in mind that the whole point of setting MCQs is to test good coverage of the syllabus in the exam.
Section B
Q1 – Q3: Three 10 mark questions. The questions will be broken down into sub requirements and may also be based on a short scenario.
Areas expected to be tested in questions 1 to 3 working capital management (the impact of a change in credit period or accepting a factor’s offer), business or security valuations (assets method and earnings valuation), financial risk management (most likely in the form of currency risk but it is possible that interest rate risk is examined here).
Q4 & Q5: Two 15 mark questions which will be broken down into sub requirements and be scenario based. These two questions will focus on these topics investment appraisal (likely to be an NPV with inflation and tax), working capital management and business finance (either an evaluation of financing options – interest coverage and gearing ratios are likely to be important here or a cost of capital calculation are most likely). Whichever of these three topics does not feature in question 4 or 5 will appear in question 1, 2 or 3.
F9 has the following syllabus areas:
A Financial management function
B Financial management environment
C Working capital management
D Investment appraisal
E Business finance
F Business valuations
G Risk management
Lsbf
– Calculating cost of equity using CAPM or dividend valuation model, cost of redeemable debt and bank loan/preference shares. Circumstances under which WACC can be used.– Calculation of NPV. Discussion question on risk and uncertainty – example – sensitivity analysis and probability distribution.
– Quantity discount (EOQ) and factoring calculations. Discussion of working capital financing and/or investment policies.
– Factors to consider in formulating dividend policy or the effect of a change in dividend policy on share price.
– Valuation of equity using; DVM, P/E ratio and asset basis. Valuation of convertible debt and calculation of conversion premium. Explanation of weak and strong form of efficient market.
– Hedging currency risk using forward contract and money market hedge. Discussion of transaction, economic and translation risk.
First Institution
– Discussion of the economic environment and the impact on interest and exchange rates.– Working capital management.
– Investment appraisal and cost of capital.
– Business valuations.
OpenTuition
Section A: 20 MCQ’s from throughout the syllabusSection B: 5 questions:
– Management of receivables
– Valuation of business (using PE ratio, and using dividend valuation model)
– Investment appraisal – NPV calculation (plus capital rationing)
– WACC calculation (including CAPM)
– Gearing (financial and operational)
Beckers Professional
– NPV– IRR.
– Debt factoring.
– Dividend policy.
– Project-specific cost of equity.
