ACCA F9 -Financial Management - Exam Tips
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ACCA F9 -Financial Management - Exam Tips

Having taught F9 for many years- Ive pieced together my best all round tips for this tricky paper.

Section A – MCQs

Can often be obscure & test the outside areas of the syllabus.

Past MCQs which students have struggled with have focused on (ref to Kaplan chapters)

Financial management function–chapter 1

Economic environment – chapter11

Money & capital market definitions and the names of the major instruments which are sold there ch12

Dividend policy –ch16

Islamic finance ( just need the definitions of key words)

Sources of finance

Efficient Market Hypothesis. (ch20)

Subjects which are always examined

Investment Appraisal (use your pro-forma layout –turn your page to write horizontally for maximum space - state any assumptions you are making & don't forget your comment at the end whether you will accept or reject based on your NPV result & don't be put off if the NPV is negative ( this has be done before ).

Remember many people get an incorrect NPV result at the end of the calculation (so easy to slip under pressure) - but there is just one mark for this – the rest are gained in the workings. So, show them neatly referenced to the NPV calc. Anything unusual that you've not seen before – then just state your assumptions or even miss it out (the marker will think you've skipped it due to time pressure. The main thing is to keep going and not get bogged down by complexities (which will only be worth a few marks).

There are only so many variations to NPV calcs – if you've practiced quite a few and know the common tricks then this question is your chance to pick up some decent marks (common twists : inflation, real/nominal rate, working capital, testing of incremental / non-relevant costs, taxation).

IRR – usually examined – know the formulae and be able to apply it.

WACC – key area will be longer section C question – or form part of the case-questions in section B. You need to be able to calculate the main costs of sources of finance and understand capital structure main theories – read past written parts of F9 WACC questions to get an idea of what could be asked.

Foreign exchange risk is on almost every single exam – you need the main hedging methods & calcs and definitions of types of risk and just a basic grasp of the foreign currency derivatives – options & futures etc ( no calcs for the derivative just need definitions & basic understanding).

Working capital – inventory, cash management, receivables and payables and working capital general policy. Be able to talk about the balance between liquidity and profitability in any of these.

Your main models & techniques are:

  • Cash management – Miller Orr & Baumol model

  • Receivables – Evaluation of using a factor + discussion of factoring / invoice discounting. – Early payment discounts- calc/ decision to offer discount – managing receivables credit policy & foreign receivables.

  • Payables – Early payment discounts – decision to accept discount calculation (only a short topic)

  • Working capital general – operating cycles – assessment of overtrading- ratios

  • Inventory – EOQ with discounts/ bulk discounts.

As always- Exam technique – keep on going‼ If there is an unusal bit in these calcs that you don't recognise – just miss it out & move on– you’ll lose 1 or 2 marks but will get all marks for finishing the question and for your method (so long as you show your workings)

Business Valuations – know the main techniques and for this area – please read past questions on accaglobal. Exam technique: – talk about your answer even if you know it may contain an error – there are still full marks for interpretation of your own figures.

Regularly / but Not always examined

Degear-regear ( project specific beta)

Interest Rate Risk

Finally, please read the examiners report from Sept 17 – it gives the idea of the things he’s looking for and shows what he has been disappointed with in the recent sitting…

Hope this helps ...but even better - why not join us for our F9 fast track course at CSSC Tuition in Stoke on Trent (2018) - please contact info@cssctuition.co.uk for more details.

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