Unit Plan Paper P9: Management Accounting Financial Strategy

Paper P9 Management Accounting Financial Strategy

Learning Outcomes
Identify organisations objectives in financial terms and evaluate their attainment

Unit
1

Topics
1.1 Introduction 1.2 Objectives of profitentities making

Class Questions

Home Work Questions

1.1

1.3 Objectives of not-for-profit organisations 1.4 Public and private similarities and differences 1.5 Assessing attainment of financial objectives 1.6 The three key decisions of financial management 1.7 Policies for distribution of earnings 1.8 Developing financial strategy in the context of regulatory requirements 1.9 Major economic influences 1.10 Modelling and forecasting cash flows and financial statements 1.11*Current and emerging issues in financial reporting

Discuss the interrelationships between decisions concerning investment, financing and dividends Discuss and illustrate the impact of regulation on business combinations Identify and analyse the impact of internal and external constraints on financial strategy Evaluate current performance, taking account of potential variations in economic and business factors recommend alternative financial strategies for an organisation Discuss the role and management of the treasury function Identify and evaluate key success factors in the management of the finance function Identify and evaluate key success factors in the management of the finance function Identify and evaluate optimal strategies for the management of working capital

1.2, 1.3, 1.4

2.1 Introduction 2.2 The treasury function 2.3 Financial markets

2.2

2.4 Share price volatility 2.5 The efficient market hypothesis 2.6 Investor ratios 2.7 Working capital management strategies 2.3

2.1

Chapter and Question references relate to CIMAs Official Study Systems, the only texts written and endorsed by the CIMA Faculty. Extracted from the CIMA Lecturer Resource Kit for the new 2005 CIMA syllabus. For more information on the use or adoption of CIMAs Official Study Systems, or to gain full access to the Lecturer Resource Kit, please contact Caron Horsgood. Tel: 01865 314948 c.horsgood@elsevier.com. www.cimapublishing.com Elsevier 2005. All rights reserved.

Unit Plan Paper P9: Management Accounting Financial Strategy

Learning Outcomes
Identify and calculate optimal strategies for the satisfaction of longer-term financing requirements Identify and calculate optimal strategies for the satisfaction of longer-term financing requirements Identify and calculate optimal strategies for the satisfaction of longer-term financing requirements Gear and ungear betas Calculate the cost of equity using the dividend growth model Calculate the cost of equity using the dividend growth model Calculate, interpret and use the weighted average cost of capital Appreciate the ideas of diversifiable risk and systematic risk Appreciate the ideas of diversifiable risk and systematic risk Appreciate the ideas of diversifiable risk and systematic risk Gear and ungear betas

Unit
7

Topics
3.1 Introduction 3.2 Shareholders funds 3.3 Raising share capital the stock market 3.4 Debt finance

Class Questions

Home Work Questions

3.1, 3.3

3.4

3.5 Medium term financing 3.6 Financing of small businesses

3.2, 3.5

10

4.1 Introduction 4.2 Measuring gearing 4.3 Cost of capital 4.3 Cost of capital (continued) 4.4 Weighted average cost of capital 4.5 Marginal cost of capital 4.1, 4.2,4.3,4.4

11

12

13

14

Calculate values of organisations of different types

15

4.6 The traditional theory of gearing 4.7 Modigliani and Millers theories of gearing 4.8 Cost of capital and adjusted cost of capital 4.9 Risk and reward 4.10 Portfolio theory 4.11 CAPM 4.12 Using CAPM as an investment tool 4.13 MM, CAPM and geared betas 4.14* Use of CAPM in investment appraisal 4.15* Arbitrage pricing model 5.1 Introduction 5.2 Methods of company valuation 5.3* Business valuations and efficient markets

4.5

5.1, 5.2, 5.3

Chapter and Question references relate to CIMAs Official Study Systems, the only texts written and endorsed by the CIMA Faculty. Extracted from the CIMA Lecturer Resource Kit for the new 2005 CIMA syllabus. For more information on the use or adoption of CIMAs Official Study Systems, or to gain full access to the Lecturer Resource Kit, please contact Caron Horsgood. Tel: 01865 314948 c.horsgood@elsevier.com. www.cimapublishing.com Elsevier 2005. All rights reserved.

Unit Plan Paper P9: Management Accounting Financial Strategy

Learning Outcomes
Identify and calculate the value of intangible assets

Unit
16

Topics
5.4 Intellectual property 5.5* The impact of changing capital structure 5.6* recognition of the interests of different stakeholder groups in company valuations 6.1 Introduction 6.2 Terminology and types of merger 6.3 The reasons for merger or acquisition 6.4 Defences against takeover 6.5 Methods of payment for an acquisition

Class Questions

Home Work Questions

5.4, 5.5

Identify and evaluate the financial and strategic implications of proposals for mergers, acquisitions, demergers and divestments Calculate and recommend alternative forms of consideration for, and terms of, acquisitions Calculate post-merger or post-acquisition values of companies Identify and evaluate post-merger or postacquisition value enhancement strategies Evaluate exit strategies Understand the purpose of investment appraisal Analyse relevant costs and benefits of an investment project Evaluate domestic investment projects Analyse relevant costs and benefits of an investment project Evaluate domestic investment projects Recommend investment decisions when capital is rationed Evaluate domestic investment projects taking account of potential variations in business and economic factors

17

6.2, 6.3

18

6.6 The post-merger or postacquisition integration process 6.7 Reasons why mergers and acquisitions fail 6.8* Management buyouts 6.9* MBOs and other forms of reconstruction 7.1 Introduction 7.2 Accounting rate of return 7.3 Payback 7.4 Discounting techniques

6.1

6.4, 6.5, 6.6

19

20

7.4 Discounting techniques (continued)

7.2,7.3

21

7.5 Capital rationing 7.6 Annual equivalent costs 8.1 Introduction 8.2 Taxation 8.3 Inflation 8.4 Working capital

7.1

22

8.1, 8.2, 8.4,8.5

Chapter and Question references relate to CIMAs Official Study Systems, the only texts written and endorsed by the CIMA Faculty. Extracted from the CIMA Lecturer Resource Kit for the new 2005 CIMA syllabus. For more information on the use or adoption of CIMAs Official Study Systems, or to gain full access to the Lecturer Resource Kit, please contact Caron Horsgood. Tel: 01865 314948 c.horsgood@elsevier.com. www.cimapublishing.com Elsevier 2005. All rights reserved.

Unit Plan Paper P9: Management Accounting Financial Strategy

Learning Outcomes
Analyse relevant costs, benefits and risks of an investment project

Unit
23

Topics
8.5 Identification of a projects relevant costs and benefits 8.6* Linking investment in IS/IT with strategic, operational and control needs 8.7 Adjusting for risk sensitivity analysis 8.7 Adjusting for risk 8.8* Evaluating and reporting investment opportunities 8.9 Adjusted present value 8.10* Assessing investments as options 8.11* Project implementation and control 8.12* Post-completion auditing 9.1 Introduction 9.2 Financing overseas operations a global strategy 9.3 The effect of restrictions and remittances

Class Questions

Home Work Questions

Evaluate procedures for the implementation and control of investment projects

24

8.3, 8.6,8.7,8.8

Identify and evaluate optimal strategies for the satisfaction of international longer-term financing requirements Evaluate international investment projects taking account of potential variations in business and economic factors Identify and evaluate optimal strategies for the satisfaction of international longer-term financing requirements Evaluate international investment projects taking account of potential variations in business and economic factors

25

9.1

26

9.4 The Euromarkets 9.5 The effect of taxation 9.6 International capital budgeting 9.7 APV method

9.2, 9.3, 9.4, 9.5

* Denotes areas that could be designated self study if the full 26 units are not available

Chapter and Question references refer to CIMAs Official Study Systems, the only texts written and endorsed by the CIMA Faculty. Unit plan extracted from CIMA Lecturer Resource Kit. Kits are supplied on CDROM and contain Lecture Plans and extensive Powerpoint slides. Their use ensures that all the learning outcomes of the new syllabus are covered in tuition sessions. They provide tutors with confidence, structure and reduced preparation time in teaching the new CIMA syllabus. Use is granted free of charge for teaching purposes to colleges adopting CIMA Official Study Systems as the core reading for the module. For more information on the use or adoption of CIMAs Official Study Systems, or to gain full access to the lecturer support material, please contact Caron Horsgood. Tel: 01865 314948 c.horsgood@elsevier.com www.cimapublishing.com

Chapter and Question references relate to CIMAs Official Study Systems, the only texts written and endorsed by the CIMA Faculty. Extracted from the CIMA Lecturer Resource Kit for the new 2005 CIMA syllabus. For more information on the use or adoption of CIMAs Official Study Systems, or to gain full access to the Lecturer Resource Kit, please contact Caron Horsgood. Tel: 01865 314948 c.horsgood@elsevier.com. www.cimapublishing.com Elsevier 2005. All rights reserved.