Financial Management

Financial Management

Paper F9 Course Notes ACF9CN07(N)

F9 Financial Management Study Programme

Page Introduction to the paper and the course............................................................................................................... (ii)

1 Financial management and financial objectives .......................................................................................... 1.1 2 Economic environment for business............................................................................................................ 2.1 3 Financial markets and institutions ............................................................................................................... 3.1 4 Working capital............................................................................................................................................ 4.1 5 Managing working capital............................................................................................................................ 5.1 6 Working capital finance ............................................................................................................................... 6.1

End of Day 1 ? refer to Course Companion for Home Study Progress test 1

7 Investment decision..................................................................................................................................... 7.1 8 Investment appraisal using DCF methods................................................................................................... 8.1 9 Allowing for tax and inflation........................................................................................................................ 9.1 10 Project appraisal and risk .......................................................................................................................... 10.1 11 Specific investment decisions.................................................................................................................... 11.1

End of Day 2 ? refer to Course Companion for Home Study Progress test 2

12 Sources of finance..................................................................................................................................... 12.1 13 Dividend policy .......................................................................................................................................... 13.1 14 Gearing and capital structure .................................................................................................................... 14.1 15 Cost of capital............................................................................................................................................ 15.1 16 Capital structure ........................................................................................................................................ 16.1

End of Day 3 ? refer to Course Companion for Home Study Progress test 3

17 Business valuations................................................................................................................................... 17.1 18 Market efficiency ....................................................................................................................................... 18.1 19 Foreign currency risk................................................................................................................................. 19.1 20 Interest rate risk......................................................................................................................................... 20.1

End of Day 4 ? refer to Course Companion for Home Study Progress test 4

21 Answers to Lecture Examples ................................................................................................................... 21.1 22 Question and Answer bank ....................................................................................................................... 22.1 23 Formulae and ratios to learn...................................................................................................................... 23.1 24 Appendix A: Pilot Paper questions ............................................................................................................ 24.1 25 Appendix B: Mathematical tables .............................................................................................................. 25.1

Don't forget to plan your revision phase!

? Revision of syllabus ? Testing of knowledge ? Question practice ? Exam technique practice

BPP provides revision courses, question days, mock days and specific material to assist you in this important phase of your studies.

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INTRODUCTION

Introduction to Paper F9 Financial Management

Overall aim of the syllabus

To develop the knowledge and skills expected of a financial manager, relating to issues affecting investments, financing, and dividend policy decisions.

The syllabus

The broad syllabus headings are:

A Financial management function B Financial management environment C Working capital management D Investment appraisal techniques E Sources of business finance F Cost of capital G Business valuations H Risk management

Main capabilities

On successful completion of this paper, candidates should be able to: ? Discuss the role and purpose of the financial management function ? Assess and discuss the impact of the economic environment on financial management ? Discuss and apply working capital management techniques ? Carry out effective investment appraisal ? Identify and evaluate alternative sources of business finance ? Explain and calculate the cost of capital and the factors which affect it ? Discuss and apply principles of business and asset valuations ? Explain and apply risk management techniques in business

Links with other papers

Advanced Financial Management (P4)

Financial Management (F9)

Management Accounting (F2)

This diagram shows where links exist between this paper and other papers that may precede or follow it. This paper prepares you for the advanced (optional) paper on financial management (P4).

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INTRODUCTION

Assessment methods and format of the exam

Examiner: Anthony Head

The examination is a three-hour paper and all questions are compulsory. Each question is worth 25 marks and has both computational and discursive elements. The balance between computational and discursive elements will continue in line with the pilot paper (50:50).

Candidates are provided with a formulae sheet and tables of discount factors and annuity factors (given in Appendix B).

Format of the Exam Question 1 Question 2 Question 3 Question 4

Marks 25 25 25 25

100

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