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F9 Financial Management

Past Paper Analysis

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Overall Analysis

Discussion 52%

Computation 48%

F9 Financial management

Marks by syllabus areas

%

6 Financial management function

1 Financial management environment

22 Working capital management

22 Investment appraisal

19 Business finance

12 Cost of capital

12 Business valuation

7 Risk management

100

Financial management function 6%

D07 J08 D08 J09 D09 J10 ??

Introduction 8

Financialobjectives

8 12 9

Stakeholders

not-for-profitorganisations

Financial management environment 1%

D07 J08 D08 J09 D09 J10 ??

Economicenvironment

Financial marketsand institutions

4

Working capital management 22%

D07 J08 D08 J09 D09 J10 ??Working capital 3 10 21 4Inventories 7 2Accountsreceivable

7 6 8 11 8

Accountspayable

7

Cash 6 5 13WC funding

Investment appraisal 22%

D07 J08 D08 J09 D09 J10 ??Appraisalprocess

7 5

Payback 4ROCE 3DCFApplications

8 18 4 7 3 6

Tax 4 2 4Inflation 5 5 4 4 3 4Risk anduncertainty

8

Lease orbuy

11

Assetreplacement

3 3

Capitalrationing

5

Business finance 19%

D07 J08 D08 J09 D09 J10 ??

Short-term sources 6Long-term sources 7 5 16 16 4 17Dividend policy 5 7 2Gearing and capitalstructure

7 8 5 2 4

Financing for SMEs

Cost of capital 12%

D07 J08 D08 J09 D09 J10 ??

Ke computations 9 2 2 2 3Kd and Kp computations 6 1 4WACC 4 3 4 2 5Capital structure theory 6Project specific discountrates

11 3

Impact of cost of capital oninvestments

6

Business valuation 12%

D07 J08 D08 J09 D09 J10 ??Valuation issues 5

DGM 4 4 4 3 7

PE Ratio 2 3 3 2

PV of FCF

Valuation of debt 6 4 9EMH 8 5

Risk management 7%

D07 J08 D08 J09 D09 J10 ??

Currency risk 4

Reasons for exchange ratefluctuationHedging currency 8 14 8

Interest rate 3

Reasons for interest ratefluctuationHedging techniques Interestrates

4