ACCA F9双语讲义

Course Notes

ACCA

F9

Financial Management

Exams from March 2017

J A N U A R Y 2 0 1 7 R E L E A S E

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Intro ductio n

3B

ACCA F 9

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1BContents

Page

Introduction

1 Links to other papers

2 Study planner

1: Financial management function

1 The nature and purpose of financial management

2 Financial objectives and the relationship with corporate strategy

3 Stakeholders and impact on corporate objectives

4 Financial and other objectives in not-for-profit organisations

2: Financial management environment

1 The economic environment for business

2 The nature and role of financial markets and institutions

3: Working capital management

1 The nature, elements and importance of working capital

2 Techniques for managing inventory

3 Techniques for managing accounts receivable

4 Techniques for managing accounts payable

5 Techniques for managing cash balances

6 Determining working capital needs and funding strategies

4: Investment appraisal

1 Investment appraisal techniques

2 Allowing for inflation and taxation in DCF

3 Adjusting for risk and uncertainty in investment appraisal

4 Specific investment decisions

5: Business finance

1 Sources of and raising business finance

2 The relationship between dividend policy and the financing decision

3 Estimating the cost of equity

4 Estimating the cost of debt

5 The weighted average cost of capital (WACC)

6 Sources of finance and their relative costs

7 Capital structure theories and practical considerations

8 Changes to a company and their impact on the WACC

9 Finance for small and medium sized entities (SMEs)

6: Business valuations

1 Nature and purpose of the valuation of business and financial assets

2 Models for the valuation of shares

3 The valuation of debt and other financial assets

4 Efficient Market Hypothesis (EMH) and practical considerations in the valuation of shares

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3

6

7

7

9

13

13

17

19

22

24

29

33

33

42

47

51

57

57

63

65

69

73

74

75

78

81

85

85

86

94

97

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Intro ductio n

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7: Risk management

1

Managing interest rate risk

2

Managing foreign exchange risk

Solutions to Class lecture examples

Chapter 1

Chapter 2

Chapter 3

Chapter 4

Chapter 5

Chapter 6

Chapter 7

Formulae sheets

99

99

103

115

115

116

116

119

125

127

129

131

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1

Links to other papers

AFM (P4)

FM (F9)

MA (F2)

1.1 Paper aim

To develop the knowledge and skills expected of a finance manager, in relation to investment,

financing, and dividend policy decisions.

Main capabilities

On successful completion of this paper, candidates should be able to:

A

Discuss the role and purpose of the financial management

function

B

Assess and discuss the impact of the economic environment on financial management

C

Discuss and apply working capital management techniques

D

Carry out effective investment appraisal

E

Identify and evaluate alternative sources of business finance

F

Discuss and apply principles of business and asset valuations

G

Explain and apply risk management techniques in business

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Intro ductio n

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Relational diagram of main capabilities

Financial

management function

(A)

Financial management environment (B)

Working capital

management (C)

Investment appraisal

(D)

Business

finance (E)

Risk

management (G)

Business

valuations (F)

Rationale

The syllabus for Paper F9,

Financial Management

, is designed to equip candidates with the skills that

would be expected from a finance manager responsible for the finance function of a business. The

paper, therefore, starts by introducing the role and purpose of the financial management function

within a business. Before looking at the three key financial management decisions of investing,

financing, and dividend policy, the syllabus explores the economic environment in which such

decisions are made.

The next section of the syllabus is the introduction of investing decisions. This is done in two stages -

investment in (and the management of) working capital and the appraisal of long-term investments.

The next area introduced is financing decisions. This section of the syllabus starts by examining the

various sources of business finance, including dividend policy and how much finance can be raised

from within the business. It also looks at the cost of capital and other factors that influence the choice

of the type of capital a business will raise. The principles underlying the valuation of business and

financial assets, including the impact of cost of capital on the value of business is covered next.

The syllabus finishes with an introduction to, and examination of, risk and the main techniques

employed in the management of such risk.

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The syllabus is assessed by a three- hour 15 minutes paper-based examination. All questions are

compulsory. It will contain both computational and discursive elements. Some questions will adopt a

scenario/case study approach.

Section A of the exam comprises 15 multiple choice questions of 2 marks each.

Section B of the exam comprises three scenarios consisting of 15 multiple choice questions of 2 marks

each.

Section C contains two 20 mark questions.

The two 20 mark questions will come from working capital management, investment appraisal and

business finance areas of the syllabus. The section A and section B questions can cover any areas of

the syllabus.

Candidates are provided with a formulae sheet and tables of discount and annuity factors.

1.2 Examination technique

Time management

The paper is very time

pressured. Students should keep track of their time carefully, and not ‘over

-

run’ on one question to the detriment of another.

Question requirements

Always read the question carefully.

2

Study planner

Chapter

Subject

Introduction

This sets the background to the

PER

relevance

Time (min)

10

10

Questions from the First

Intuition Question Bank

Refer to the First Intuition

Question Bank

paper

Formulae

Sheet

In this paper you are supplied with

formulae sheets, a copy of which is

provided at the back of these Notes

so that you can familiarise yourself

in preparation for the real exam.

Financial Management Function

This is an introduction to the paper,

but make sure you learn the ratios.

Financial Management

Environment

This is a brief written chapter

showing the link between the

outside world and financial

management.

PO11

1

60 reading

110

questions

SFQs

: 1, 2, 6, 7, 10, 11, 16

& 17

Scenario Qs

: Q21-25 YNM

Co

2

40 reading

SFQs

: 36, 37, 38, 39, 40,

85 questions

46, 47, 48, 49, 55 & 56

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Chapter

3

Subject

PER

relevance

Time (min)

160 reading

360

questions

Questions from the First

Intuition Question Bank

SFQs

: 65, 66, 67, 71, 72,

73, 85, 86, 87, 88

Scenario Qs

: 103-107 FLG

Co

LFQs

: Q2 Plot Co, Q5 PKA

Co, Q8 Ulnad Co, Q12 HGR

Co

SFQs

: 108, 109, 110, 111,

112, 113, 119, 120, 121,

124, 125, 129, 130

Scenario Qs

: 133-137 Socan,

138-142 Trecor

LFQs

: Q14 Darn Co, Q16

Riddulph Co, Q19 BRT Co

Working Capital Management

PO10

This is an important chapter as it

has appeared in every single real

exam so far. It is not difficult, but it

is worth going through it slowly to

ensure that you understand it fully.

Investment Appraisal

PO09

This is another important chapter

as it has also appeared in every

single real exam so far. It is slightly

more technical in places. The NPV

calculation is the central idea you

MUST be happy with and the IRR is

also important both here and in

Chapter 6.

Business Finance

PO09, PO11

Sources of finance is a mostly

written part of the syllabus, though

the Examiner does like you to be

able to calculate the theoretical ex

rights price. Cost of capital is

another important part of the

syllabus, having been examined in

all but one of the real exams so far.

The whole chapter is important and

if you are happy with it the

following chapter is much easier.

Business Valuations

PO09

In this chapter we are given the cost

of capital and have to calculate the

value, which is the reverse of the

previous chapter.

Risk Management

PO11

This final chapter is a mix of

discussion and calculation covering

the two main risks faced by most

businesses; namely foreign

currency and interest rates.

4

220 reading

450

questions

5

220 reading

500

questions

SFQs

: 148, 149, 150, 154,

155, 156, 161, 162, 165,

166, 169, 170

Scenario Qs

: 177-181 Amah

Co

LFQs

: 22 Card Co, 24 Rochie

Co, 30 Burse Co, 32 Nugfer

Co, 33 Maratona Co, 36

Zigto Co

6

80 reading

250

questions

SFQs

: 187, 189, 190, 191,

192, 196, 197, 200, 201

Scenario Qs

: 205-209 Close

Co , 220-224 Gemlo Co

LFQs

: 38 Quasa Co, 40 THP

Co

SFQs

: 225, 226, 230, 231,

232, 233, 238, 239, 240,

245, 246

Scenario Qs

: 254-258 PZK

Co

LFQs

: Q43 Birne Co, Q44

Gorwa

7

80 reading

240

questions

The chapter number refers to the chapter of these Course Notes. The time is a guide as to how long

you should spend reading the relevant chapter and how long it will take to attempt and review the

solutions for the recommended questions.

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