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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%

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Introduction 8

Financial 8 12 9
objectives

Stakeholders

not-for-profit
organisations

Financial management environment 1%

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Economic
environment

Financial markets 4
and institutions
Working capital management 22%

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Working capital 3 10 21 4
Inventories 7 2
Accounts 7 6 8 11 8
receivable
Accounts 7
payable
Cash 6 5 13
WC funding

Investment appraisal 22%

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Appraisal 7 5
process
Payback 4
ROCE 3
DCF 8 18 4 7 3 6
Applications
Tax 4 2 4
Inflation 5 5 4 4 3 4
Risk and 8
uncertainty
Lease or 11
buy
Asset 3 3
replacement
Capital 5
rationing
Business finance 19%

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Short-term sources 6
Long-term sources 7 5 16 16 4 17
Dividend policy 5 7 2
Gearing and capital 7 8 5 2 4
structure
Financing for SMEs

Cost of capital 12%

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Ke computations 9 2 2 2 3
Kd and Kp computations 6 1 4
WACC 4 3 4 2 5
Capital structure theory 6
Project specific discount 11 3
rates
Impact of cost of capital on 6
investments
Business valuation 12%

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Valuation issues 5

DGM 4 4 4 3 7

PE Ratio 2 3 3 2

PV of FCF

Valuation of debt 6 4 9
EMH 8 5

Risk management 7%

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Currency risk 4

Reasons for exchange rate


fluctuation
Hedging currency 8 14 8

Interest rate 3

Reasons for interest rate


fluctuation
Hedging techniques Interest 4
rates

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