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helensqq says

Hi John,

I’m bit confused about P/E ratio, in your lecture, p/e=market value per share/earning per share, and earning per share=earnings for ordinary shares/number of ordinary shares. Dec 2012, Q4, a) iii) I calculate that earning per share is 10.1/40=0.2525, so p/e ratio is 4/0.2525=15.84. I cannot understand examiner’s answer, average p/e ratio x earnings, what’s that mean, what this figure tells me? Thanks.

johnmoffat says

PE = market value / earnings

If you multiply both sides by earnings, you get market value = PE x earnings

The question asks you for a market value and specifically says to use the business sector average PE ratio.

The company is being considered for acquisition, if you were thinking of buying it then this is one way that you might decide how much it was worth paying for the shares.

hamzaharoon says

3000 years to payback Earnings ????? WOW Totally Insane

johnmoffat says

But not insane if you are expecting earnings to grow very fast

aishaasad says

hello Sir ,

while calculating interest cover how does interst cover comes out to be 5.45 mine comes out to be 54.54 when i divide 6000 by 110 plz explain may be i am getting confused with zeros

Thanks in advance.

johnmoffat says

Interest cover is 8.67!!! It is 52,000 / 6,000 (profit before interest divided by interest)

Thats what I do in the lecture – I don’t know why on earth you are dividing 6000 by 110!

aishaasad says

SORRY SIR i meant to ask about interest yield

johnmoffat says

I really cannot imagine why you want to divide 6000 by 110.

The nominal value of one bond is $100, so the interest on one bond is $6.

The market value of one bond is $110.

So the interest yield is 6/110 x 100%

arad says

Is is possible to use open tuition notes and lectures and gain sufficient information to pass F9 exam. Thank you

johnmoffat says

Yes! There is more than enough in the lectures and Course Notes to be able to pass the exam well.

However the one extra thing that you do need to do is to practice as many questions as possible. My lectures and notes can teach you what you need to know, but the only way that you can get used to the style of the exam and the level of difficulty is to practice questions.

At the very least you must work through all the past exam questions from the ACCA website. Better is to get hold of a Revision/Exam Kit from one of the approved publishers because they have lots of extra questions also.