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ATC's ACCA Exam Tips (June 2010) F9ENG (Financial Management)

The examiner identifies eight key areas of the syllabus

The examiner identifies eight key areas of the syllabus:
• the role of the financial management function
• the impact of the economic environment on financial management
• working capital management
• investment appraisal
• alternative sources of business finance
• the cost of capital
• business and asset valuations
• foreign exchange and interest rate risk management

The exam consists of four compulsory 25-mark questions. All questions will have computational and discursive elements. The examiner tries to test as much of the syllabus as possible, often combining several topics within one question. Hence candidates must have solid knowledge of all the topics listed above.

Candidates are provided with a formulae sheet and tables of discount and annuity factors. Candidates should bring a scientific calculator to the examination.
It is essential to carefully work through the Pilot Paper and the December 2007 - December 2009 exams to become familiar with the style, time pressure and level of difficulty.
The examiner has written four articles in the Student Accountant magazine – “Capital Asset Pricing Model (parts 1-3)” and “Market Matters”.
In March 2009 an article called “Being an angel” appeared and, although shown on the ACCA website under the link to paper P4 Advanced Financial Management, is arguably more relevant to the paper F9 syllabus which specifically refers to finance for SME’s.
The September 2009 article “Receivables Collection” focuses on the commonly tested topics of settlement discounts and debt factoring.
All these articles can be downloaded from the ACCA website.
If you seek further insights into the examiner’s mind you could consider his book “Corporate Finance – Principles and Practice” (Denzil Watson and Antony Head). However your exam preparation should focus on question practice.
Exam Tips

• The Miller-Orr model and Baumol model
• Debt factoring and settlement discounts
• SME finance (for more detail refer to the Student Accountant article “Business finance and the SME sector” – September 2001)
Purchasing Power Parity and Interest Rate Parity theories

By Mike Ashworth

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